The financial events of the past year have made abundantly clear the dangers of an obsession with the short-term - such as the over-emphasis on quarterly earnings by many investors, analysts, and executives.
 
As the world now begins its efforts to recover from the tremendous financial hangover created by that destructive short-term focus, there is beginning to emerge a wiser, more sober emphasis on those steps required to enable organizations and economies to grow through authentic and sustainable value creation.
 
Human capital management will thus attract new attention.  In an increasingly globalized world, it is arguably the only remaining sustainable source of competitive advantage for organizations operating within high-wage, developed nations.  Hence, effective, forward-looking human capital management must become a core competence for all organizations that expect to survive (much less prosper) as the world economy continues to evolve.
 
For most, the essential organizational capability that is missing, and must still be developed, is human capital analytics.  This is a disciplined (quantitative) process for identifying the causal relationships between the management of people and an organization's business results (both financial and non-financial).  The days of running the people side of the business by gut and intuition are over.
 
One of the first things that organizations can do to take a positive step in the right direction is to overhaul their approach to employee surveys.  Organizations that still focus on traditional notions of employee engagement (or satisfaction) are missing the boat. 

 

They need to be turning their attention to how they can maximize organizational performance itself, not merely employee engagement.  The two are not the same, and recognizing the distinction is an important first step in an organization's path to improved, sustainable value creation.