I am writing on this subject of Talent & Innovation after abandoning an alternate subject that I had already written for this edition. I felt that could wait a week further while this could not. I have been in a dialog with a bunch of people recently, whose understanding of the subject of Innovation is fairly advanced. They are considered practitioners and they occupy senior positions in Fortune rated corporations. My predisposition is that innovation is a triad of Value, Intellectual and human capital management. So the question came about in laying down the architecture for this innovation model, why include human capital? Is it not something that is addressed by the HRMS systems that is resident in most enterprises? I am sure this is a question that haunts most in the quest of Innovation to be institutionalized in their enterprises and hence the urgency to address it for the benefit of a larger audience.
Almost all HRMS systems today address the ‘administration of workers’ in an enterprise. These workers are treated as resources that enable the business function; irrespective of the level and contribution. In process language, they would otherwise be called mechanisms and calculated as Full Time Equivalent (FTE) or part time. The real quantification here is Time and Material (T&M). Despite all the advancements in organizational science, this area has been left as is, despite the deep insights provided by organizational scientists such as Arie De Geus and Peter Senge. Even if we were to look at it from a process notation perspective, they may be considered resources for the Cost and Time (Delivery) attributes. What about the Quality, Service and Flexibility attributes? How do we quantify this?
So my first point in understanding this correlation between talent and innovation is the very definition of talent. This is not the output of a performance but the innate potential of an individual. Managing the innate potential of an individual institutionally in an enterprise is the art and science of talent management that leads to performance or process outcomes. Learning is to Potential what Training is to Skills. Performance is therefore administered by the HRMS systems but not the managing of talent. Human Capital is really about managing talent; the ability to bridge potential with performance which is manifested as innovation in performance.
Let us understand this from the perspective of innovation. The cause of innovation is experience. As my previous edition of the blog creates an understanding, uniqueness and universality mutually complement each other. Yet, they are not one and the same. Each individual is unique and in an institution, the uniqueness of several individuals is fused to bring about institutionalized innovation. The challenge of talent management is to spark this individualism that can be experienced in unison in an enterprise. But what we see is the opposite. As organizations grow, individuality and individualism are replaced by process commoditization. Countless books have been written and we are witness to many brilliant start-ups that end up in a rut after achieving a certain level of growth. The most telling literature on this subject is the Jim Collins bestseller “How the mighty fall”. Both, growth and decline of institutions happens because of its people. This is not something that is apparent on the surface but hidden deep down. Human Resource Departments and Systems have not been able to reach that recess of human switch that allows the transition from good to better to best. This is what talent management needs to do. Monitor and Manage that switch and keep it active so that a majority of the people in the enterprise can continuously contribute to growth without being inhibited by factors such as Hubris, Undisciplined Pursuit, Denial of Risk and Peril, Grasping for Salvation and / or Capitulation to Irrelevance or Death.
What enterprises need to realize is that they need to get the structure right for innovation. They have become comfortable with creating universality in offerings and uniqueness in processes. The reverse is actually true for Transformation, Innovation & Growth. When transformation is approached with Uniqueness in offering and universality in processes, it will simultaneously reduce the tremendous burden of costs that the enterprises are carrying today, trying to patch their transactions with a process perspective without really being able to abstract it to an enterprise level. Suffering from being unable to reach unique offerings to a global marketplace with an innovative advantage is the consequence. Talent is expressed when Personal, Professional and Emotional dimensions of an individual are harnessed to a common purpose or goal. This is where the future of enterprise, society and governments is nested.
The true definition of capital is money invested for growth. While humans expend their skills for performance, it is the potential that needs to be invested in in order to turn regular performance into continuously growth oriented one. And that is the essence of the argument between Human Capital Management and Human Resource Management Systems (HRMS).