Just as human capital is only as strong as the weakest link between skills, motivation, and mental capability the overall corporate health is only as strong as the weakest link between corporate capital, complementary assets, human capital and intellectual assets. This is shown in the “Elements of Corporate Health” figure.
Key is to have them all at about the same level. Not too much and not too little. Don’t want human resource expenses to be more than needed. Don’t want capability to be less than needed. Human resources needs to gather semi-quantified information to assure the balance is correct.
Another key element in corporate health is to have a culture consistent with the company’s position in the lifecycle and its values. Geoffrey Moore uses a “Four Cultures Model” as shown in the figure. To keep up with the rapid shifts in market dynamics brought on by technology adoption lifecycles, corporations must unify themselves through a common commitment to a global culture. Specifically, executive teams need to understand the following and incorporate their desires in a robust Human Capital Strategic Plan.
1. There are four proven cultures that can sustain long-term competitive advantage strategies: cultivation culture, competence culture, control culture, and collaboration culture.
2. Each culture aligns with a different value discipline, as follows: cultivation culture (discontinuous innovation); competence culture (product leadership); control culture (operational excellence); collaboration culture (customer intimacy) .
3. Each culture shines at different points in the technology adoption lifecycle: cultivation culture (early market); competency culture (early market, bowling alley, tornado); control culture (tornado, Main Street); collaboration culture (bowling alley, Main Street) .
4. Each culture creates shareholder value in its own distinctive way: cultivation culture (infectious charisma); competency culture (fierce competitiveness); control culture (relentless improvement); collaboration culture (perceptive adaptation) .
5. Each culture declares itself through characteristic global focus: cultivation culture (shared vision); competency culture (measurement and compensation); control culture (business planning); collaboration culture (customer focus) .
6. When companies merge or acquire each other, managing the transition to a new declared culture is a critical task for preserving shareholder value.
7. When cultures age, they fall prey to context overtaking core and degenerate into the following parodies of their true selves: cultivation culture (cult); competency culture (caste system); control culture (bureaucracy); collaboration culture (club) .