ASQ - Team and Workplace Excellence Forum

Online Edition - March 2002


Issue Highlight — Restoration
Peter Block's musing about a home restoration project serves as an excellent metaphor for issues in the cellar of our mind: “In our larger communities, we treat the inner city as a cellar that we do not want to enter....To enter this world, we would have the conversations that we have been avoiding.”

Funky Business and Taming Talent

What is your company’s greatest asset? Most managers would answer “our people.” Nothing could be more wrong—and I’m not thinking about the “Dilbert” cartoon where people came in ninth, right behind paper clips. My argument is that human capital must be regarded as a liability. Otherwise, companies are practicing intellectual slavery. To succeed in a world where power increasingly belongs to competent people, firms must instead build processes securing a continuous transfusion and transformation of talent. You must become a “humanager.”

Marxist Markets

The balance sheet is probably the only 500-year-old super-model still capable of arousing a few people. But despite its long-lasting allure, often it only captures around 20% of the real value of contemporary companies. Today, knowledge makes all the difference. And just who owns that—George Soros?

Ironically, in retrospect it turns out that Karl Marx was right. People now control the most critical resources—individually rather than collectively—their own brains. What is crucial at many firms is perhaps not so much the core competencies as the “core competents”—individuals who make competencies happen. Competents are “mobile monopolies” who will stay only as long as the organization offers them something they want. To thrive, companies must apply strategies that revolve around simultaneously attracting and reducing the power of competent individuals—talent transfusion and transformation.

Talent Transfusion

In a world where competition in the labor market is increasingly generic, we are all players in a great global attraction game. Success is contingent on exploiting the fact that human beings want to express their individuality and their need for belonging.

People no longer work out of moral obligations. Lifelong loyalty to a company, country, brand, rock band, husband, or wife is a thing of the past. Today, smart people hire organizations, rather than vice versa. For stars, the organization is disposable—a temporary home. And competents are not bulk goods. So, attracting talent calls for individual personalization. People can be treated and approached, evaluated and rewarded, motivated and inspired in a number of ways. If Madonna will not settle for anything the slightest bit normal or average, why should you or your fellow competents? It used to be XM (extra medium). Now it must be XMe. Instead of being provided with detailed job descriptions, competents should provide managers with motivation descriptions. But people also want to belong. Firms with a future will launch strategies focused on organizational tribalization. In a tribe, employees share rewards, ownership, culture, or whatever. Increasingly, values will constitute such a least common denominator. Today, we see many successful companies recruiting people with the “right” attitude, then training them in skills—not the reverse. Look at organizations as diverse as Southwest Airlines or Hell’s Angels. Just imagine Hell’s Angels hiring for skills! These organizations do not believe in the idea of bringing in smart people and then brainwashing them at training camps because 1) the half-life of knowledge is coming down fast, and 2) for most of us it is easier to change our skills than our basic values.

Talent Transformation

Companies also need to work hard to reduce their dependence on competents. Two strategies that we already see signs of deal with managing intelligence in an intelligent way.

The typical company of today may not suffer from knowing too little, but rather from not knowing what it knows. A critical task for any organization aspiring to be successful is thus to engage in knowledge codification—transforming the core competents into core competencies. The firm must turn human capital into structural capital — in the form of systems and procedures, routines, etc. While human capital is best thought of as a liability, structural capital is definitely an asset on the balance sheet.

A second measure aimed at improving the performance of the firm and lessening the power of competents is increased employee socialization. By working in teams or spending time together after work, over time, groups will develop tacit knowledge. People will know things that they cannot tell. The existence of tacit knowledge means that it is more difficult for competitors to imitate the knowledge of the firm. Tacit knowledge also makes it harder for people to walk out the door with their skill-sets intact. They can only bring their intrapersonal competence with them. Socialization = tacit knowledge = knowledge handcuffs.


A final word of caution. I fear that many modern managers are overlooking something important—themselves. Forget about talent-taming for a while. From a personal point of view, your most important job is ensuring that the structural capital of the organization over time becomes your human capital. Go for lifelong employability rather than lifetime employment. Make capital dance.

Jonas Ridderstråle works as an assistant professor at the Centre for Advanced Studies in Leadership at the Stockholm School of Economics. He is the co-author of international best seller Funky Business: Talent makes capital dance. (

March 2002 News for a Change Homepage

 In This Issue...
Making Change Stick
AQP “Quest for Quality” Chapter Keeps on Going and Going and …
Denta +: A Case Study in Exceptional Customer Experience Your Employees Know More Than You–So Listen!
Contact Center Employee Satisfaction and the Bottom Line
Funky Business and Taming Talent
Upcoming AQP Courses at a Glance...
What’s Up?

Peter Block Column


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