People have defined and segmented Human Capital / Resources / Capabilities many different ways. Of these myriad of approaches the best approach for managing innovation and commercialization of sustainable businesses is to simplify Human Capital / Resources / Capabilities to three basic parameters. These are the skills of the individuals and organization, the motivation of the individuals and organization, and the level of thought (an expanded practical IQ metric) of the individuals in the organization.
The relationship between Human Capital and other Intellectual Capital of the corporation can best be visualized in the “Human Capital as One Element of the Corporation’s Intellectual Capital” figure. It is the human skills, motivation and level of thought that creates the know-how and other Intellectual Assets unique to the corporation. These Intellectual Assets provide for the long term sustainability of the organization.
To obtain the best probability of creating a high output innovative organization, a Human Capital Strategic plan starts with the Corporation’s Vision, Mission, Values, Business Strategic Plan and Technical / New Business Strategic Plans. These plans describe what projects the company needs to undertake to be successful. The Human Capital Strategic Plan looks at the requirements of these plans and ascertains how many people, with which skill level, motivation, and level of thought will be necessary to deliver on the other plans. Clearly companies that plan to follow the market leaders and conduct incremental innovation will be most cost-effective and productive if populated by individuals capable and motivated to do that type of work. On the other hand, companies whose strategic plans call for new-to-the-world products and services to achieve their strategic plan goals will need a completely different population of human resources as described by the skills, motivation and level of thought their employees and contractors possess.
Don Kash and Robert Rycroft provide a good starting point for setting a Human Capital Strategic Plan. They ask five questions that frame the skills, motivation and level of thought needed from Human Resources. Answers to these five questions should be found in the Corporation’s Vision, Mission, Values, Business Strategic Plan and Technical / New Business Strategic Plans. The five questions are:
1. Is your technology simple or complex? Simple technologies are those that can be understood in detail by an individual expert, i.e., can be described in detail and communicated over time and distance to another expert. Complex technologies cannot be understood in detail by an individual. Such complexity requires organizational networks that are managed by self-organized learning processes. Increasingly product and process technologies have become so complex that many of their subsystems and components also have evolved into highly complex technologies too. Complex technologies require broader skill sets and higher levels of thought be present in the corporation’s human resources.
2. In which technological sector or sectors are you innovating or going to be innovating? The innovation of complex technologies requires the synthesis of resources from different sectors. Especially important has been the integration of infrastructure technologies like advanced materials and information and communication systems. The skills the corporation’s personnel possess has to at least cover the technologies it intends to practice.
3. Is the innovation you are pursuing normal (incremental), transitional (major redesign), or transformational (first-of-a-kind)? For complex technologies the economic payoff comes from normal innovations, the capacity to repeatedly carry out incremental technologies (see the section on R&D Game Types). Some business plans however require transitional or transformational work. The skills, motivation and level of thought requirements will be different for each.
4. What mix of tacit and explicit knowledge is needed? In the case of complex technologies where rapid innovation is necessary, networks are essential because only very adaptable structures can provide the required diversity of tacit and explicit knowledge inputs fast enough to stay ahead of competitors. Tacit knowledge requires higher levels of skill, motivation and levels of thought are present in the organization.
5. What will be your major sources of knowledge? In addition to internal company resources, what level of academic, institute, trade associations, standard setting entities will be required? The more diverse the knowledge sources also require higher levels of skill, motivation and levels of thought are present.
Knowing the answers to these questions for the preponderance of projects undertaken by an organization lays the foundation for planning the skills, motivation and level of thought needed.