Strategic Human Capital Insights

Human Asset Strategy: Risk Management & Complex Consequence Analysis


Today, the new catchphrase to describe an organization's people is human capital. Over the years, the term human capital has been used to describe the people of the organization to include terms like employees, personnel, and talent. While the terms we use have become more descriptive and trendy has anything behind those terms really changed over the years? Or underneath it all, do the structures, processes, and mindset about employees still reflect an old 'head count' mentality?

While the latest terminology, human capital, begins to elevate the topic of employees, we should be using the term "human assets" to align with the statement "that people are our most important asset." If we truly embrace that concept, we must turn our human resource structures upside down and think about people the same way we do the organization's other assets. Unless we embark on the Human Asset Management journey, the terms we use are empty.

In earlier blogs, I have talked about Human Asset Management regarding the following topics:

Human Asset Management and the C-Suite

Let's elevate the narrative of Human Asset Management to C-Suite terms. There is no denying that globally, organizations are facing a talent deficit of epic proportions. As the nature of work is continually transforming and disruptors like artificial intelligence and robotics are fast becoming the new normal, companies must continue to rethink their current business operating models. Industries that were once robust are now in their sunset years. New industries continue to evolve daily. What we will look like in 5–10 years may be completely unrecognizable from today's business paradigm.


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Human Asset Management Strategy

At the heart of this transformational business dynamic is the human element. Employees are not static resources. If employees are not moving forward with their skills and knowledge in a continually changing work environment, they are ultimately moving backward. An employee who is 'skills relevant' today may be a depleted resource tomorrow as organizations face the demands of future work requirements.

Risk Management and the Complex Consequence Analysis of Human Asset Management

For every action, there is an equal and opposite reaction.

The statement means that in every interaction, there is a pair of forces acting on the two interacting objects. The size of the force on the first object equals the size of the force on the second object - Newton’s Third Law

Here is where an organization must ask the risk management and complex consequence questions. In Human Asset Management, every decision we make about people will have reactions that must be evaluated along the following criteria:

  • Can your current people confidently meet the current and future business challenges that will allow your organization to compete profitably?
  • Can your people confidently create a sustainable future business?
  • What are the business risks?
  • What are the business consequences of ignoring these risk issues?
  • How robust is your organization?
  • How resilient and healthy is your organization to absorb new work and different work driven by a dynamic marketplace?

Going Forward, Risks and Consequences

For years, we have been driven by the concept of headcount and cost-cutting to the point where we have depleted the people of our organizations. Cost-cutting has a place in running the business, but when it is done at the cost of a robust human asset management strategy, there is ultimately an organizational price to pay. Today, in many cases, organizations are dealing with the risks and consequences of human resource actions taken years ago. Organizations must change the mindset and truly think of a human asset management strategy with a robust risk management process. Organizations are still made up of people – one of our key assets. Manage people like the human assets they are and the value they bring to the organization. 


We invite you to download our latest "Human Asset Management Strategy" Checklist, which highlights the criteria needed to evaluate the human asset management strategy of your organization, or you can also schedule a complimentary assessment.

Download the Checklist >>


Topics: Human Asset Management

Posted by Joanne Flynn

Joanne Flynn

Joanne T. Flynn heads up the human capital advisory group, Phoenix Strategic Performance, Inc. Previously, she was a Managing Director with Phoenix Group International and was Vice President / Director of Global Learning and Development at Goldman, Sachs for nine years. Joanne works with organizations as they face global growth and competitive challenges. She works with her clients to be both externally focused and internally responsive. With her unique background, she aligns competitive strategic efforts with related internal organizational leadership challenges. With the benefit of her career-long focus, Joanne contributes the unique insight of aligning strategy to internal organizational structure and process. She focuses on human capital relative to strategic initiatives, accelerated business growth, value creation, and business development. Joanne holds a Master of Arts degree in Business Management from the University of Oklahoma. In addition, she holds a double degree major in History and German from St. Elizabeth University, as well as certificates from a variety of leading universities and professional training and development organizations. Joanne has recently published her latest book, Accelerating Business Success, The Human Asset Management Strategy.

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