Maximum Output & Human Capital

Our capitalistic economy promotes efficient business operation as a means to maximize profit. Operating efficiently means that systems which drive the business processes are performing optimally, with functioning elements synchronized to consistently deliver quality work on time and within established cost standards. All components of the system, including the human assets, perform best under these circumstances, and can sustain targeted output with minimal stress.But since competition drives capitalism, there are times when output must be maximized, disturbing optimal performance, increasing system stress, and degrading components. Under traditional capitalism, the mindset is that parts failing under maximum output can be replaced.

But this notion fails with respect to investments in human capital.  Treating people like they are disposable spawns lasting negative consequences for any business that inhibits a return to optimal performance…poor quality, burnout, loss of purpose, higher personnel turnover.

In an age where substitute materials can be are easily acquired, where access to information is readily available, and where technological advantage cannot long be maintained, people are an organization’s most sustainable competitive advantage. People make the difference for customers and for the business. Allowing the degradation of high performing personnel in times of maximum output compromises the ability of people to make that difference, undermining competitive differentiation.

Unlike all other system components that may be smoothly replaced after periods of maximum output, human resources are adaptable and will return to optimal performance with the right mix of communication, continued engagement and renewed purpose. This flexibility is what separates human resources from other assets. People want to make a difference and will adapt if given the appropriate consideration.