Scaling Human Capital
How do you scale human capital? You don't. At least, not if you're trying to make a high performing organization.
A common implementation of scale is in creating a form of competitive advantage (i.e. economies of scale). With such scale, every $ you earn nets incrementally more profit than those without scale. If defended well, such scale yields a higher profit for each $ earned.
Companies build processes to scale. They build financial processes to automate reporting, bill collection, invoicing and many of the operational admin work. These processes scale as the company grows, producing more with incrementally less hours needed to maintain.
Most processes are improved with the use of tools (i.e. apps, Saas etc...). Tools have a leverage effect on time. With a mere 20% of the effort you can get 80% of the results if you have the right processes and tools. This helps companies grow rapidly and operate effectively.
This doesn't necessarily apply to people. When young companies try to scale in the name of hypergrowth, many resort to mass hiring sprees.
It's true that a single employee in the right place and right role can create the output of 10. Sometimes, a single idea from a single employee is worth a fortune (i.e. the guy who invented the post-it note for 3G or the engineer who made Gmail in his spare time). Size doesn't matter here.
The reality is, you don't "throw bodies" at the problem hoping to solve it. This was what happened when I was in professional services. Since you billed by the hour, the solution was to throw more people into a problem as long as it fit the budget. I see this as common practice in the venture-funded startup world as well.
Companies think people can be managed with simple top-down processes. It may have worked when the work of people was no more complicated than simple manual tasks in the assembly line but it's not the case for most companies anymore. With increased automation, people have to do what we do best. Be creative.
No company-wide surveys or bullshit net promoter scores will help each employee do the work of 10 others or make an industry-changing contribution to the company.
Rather, the company must do that which is unscalable. Specific time must be invested into each person. Each person is unique and though humans are predictably irrational, we still have unique sets of experiences that determine our wiring.
A lazy company will lament this fact and look for ways to get the 80/20 result. Hoping to find cookie cutter solutions and frameworks to get their people from 0 to 80. That is a fine way to build a mediocre company.
For companies that want to matter and be successful, 0 to 80 is table stakes but it's the journey from 80 to 99. This is where people learn to become their true selves. This is where the organization will decide to matter or not. It starts by doing the unscalable with the foundational building block of the company.
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