Strategic Human Capital Insights

Human Asset Strategy: Business Risk Management & Complex Consequence Analysis

3/14/17 9:00 AM

Human Asset Management-3.jpgToday, the new catch phrase to describe an organization’s people / employees is human capital. Over the years, the terms we use to describe the people in our organizations range from employees to human resources to talent to human capital. 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 our latest terminology, human capital, begins to elevate the topic of employees, I have suggested that we go all the way and use the term human assets, to align with the statement saying, “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 other assets of the organization. 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, and 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. No employee is a static resource. In a constantly changing work environment, if employees are not moving forward with their skills and knowledge, then they are moving backward. An employee who is ‘skills relevant’ today may be a depleted resource tomorrow as your organization faces the demands of future work requirements.

Risk Management and 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 profitably compete?
  • 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 that is driven by a dynamic market place?

Going Forward, Risks and Consequences

For years, we have been driven by the concept of head count 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 an organizational price to pay. Today, in many cases, we are dealing with the risks and consequences of earlier human resource actions taken years ago. We must change our 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. Let’s treat them and take care of them like the human assets they are. 


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 with a member of our team.

Download the Checklist >>


Topics: human asset management

Posted by Joanne Flynn

Joanne Flynn

In 2014, Joanne Flynn founded Phoenix Strategic Performance, a strategic human capital advisory firm. Prior to this, Joanne was Vice President at Goldman Sachs for 10 years responsible for global learning and development. She then led the consulting practice of Phoenix Group International, a consulting firm specializing in global financial service. Joanne is now taking best practices from the people-intensive financial services industry and adapting those best practices to startup and growth businesses. She is a thought leader in the areas of strategic organizational alignment, organizational agility, human capital gap analysis, leadership challenges for the new workplace and transformation leadership.

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