Just for the heck of it, instead of the usual story, I thought I’d drag out my podium and pretend to be a college professor today. (I just want a chance to prove this lump on top of my shoulders ain’t just a hat rack!) Feel free to chew gum, send text messages to your friends, or otherwise sleep while pretending to pay attention.

But I’ll begin by saying this: it’s all the fault of my friend Ellen Weber. Let me explain…

For those of you who hid under a rock during Ike’s rampage across the Texas countryside (not that there’s anything wrong with that, mind you), you may remember that September’s WILF groupwrite project was titled What I Learned From My Friends.

In Ellen Weber’s entry, Two-Footed Articles for Ten Friends, she asked me an intriguing question that I feel needs a bit more than a comment box response. (Question: Do the ten of us each represent toes? Which one am I? Uh… never mind.)

Well, it’s a month later now, so here’s my response. (OK; I admit it: I’m sloooow.) Thanks for the question, Ellen! I love the little mind prompts you’re so good at. So here’s the question:

If people were the capital in today’s business world, how would they know that in their current workplaces?

Let’s think about this a bit (sound of grinding gears). For the sake of argument, let’s define capital as existing assets used to produce further assets. Sounds a little circular, I know, but it usually refers to buildings, inventory, and other physical stuff. However, obviously there can be many other types of capital that aren’t physical, yet are extremely critical to business.

For instance, there’s knowledge. The amount of knowledge kept inside the heads of any given organization can amount to a tremendous amount of value. These days, the biggest challenge for most companies is in learning to tap into that knowledge for the good of the organization. Not an easy task, lemme tell ya!

Then there’s a little something called experience. Most businesses depend on using their accumulated experience to convince others to buy a product or be hired to do X, Y or Z. That’s a form of capital, and it’s actually tradable – mergers & acquisitions is big business for that very reason.

I could go on, but my point here is that these forms of capital can only be found in people. Thus, in a very real sense, people are capital in an organization.

So what does that mean, anyway (sound of head scratching)?

Well, lemme ask you this: What do companies do with their capital, anyway? Uh, you in the back with the moustache and the big pink fuzzy slippers on – yes, you. Hey, right you are! It’s the same thing you want your capital to do for you while it’s in the bank – make it work for you!

So, what should someone with money (the most familiar form of capital for us ordinary folk) be doing with it? Well, here’s 5 principles I came up with right off the top of my head (which is the part of me right up there under the hat):

• Protect. The first and foremost thing is to try and keep what you have. I mean, you don’t want some bozo to come along and just lift it out of your hands and run off with it, right? So it stands to reason you wouldn’t want to just leave it lying around the house, or stuffed in a mattress somewhere. No! (he said, banging his fist on the podium) You find a safe place to keep it. That means a bank or something similar where the principal will not be at risk.
• Invest. However, now the money is secured, it needs to start earning its keep. That means some sort of investment, right? Here’s where the risk-level (and the tendency towards, er, hair-pulling) really starts to matter. See, the fact is, some folks are very risk-tolerant, some aren’t. And, to make things more interesting, risk tolerance usually changes over time. Not to mention that it’s constantly influenced by external forces as well. Today’s DJIA is a case in point (sound of hysterical sobbing).
• Grow. So, what’s the point of having the money if you’re not going to do something with it? The fact is we use money as a means (and note – it’s a means, not an end) to live, grow, and prosper – eventually (hopefully) to make our lives, well, sorta ‘bigger’ than they once were, if you get my meanin’. And, if all goes well, your life tomorrow will be “larger” than it is today. Growth is implicit in, well, existence.
• Secure. Securing the future is probably one of the most common uses of money. And that doesn’t necessarily mean chunking an inexhaustible supply somewhere, a la money tree. I mean, who has that kind of resource available? (Although… having a money tree would certainly make life so much simpler, wouldn’t it? Or would it?) No, what I’m talking about here is leveraging present, well, things for future security. Like 401k accounts, for instance. Or burial plots, for that matter. Whatever you do now that makes the future more manageable and secure (in this case defined as “less hassle”).
• Transfer. Finally, once our needs are totally met, we convey the excess on to the next generation. One thing I think we can all agree on is that to date, no one has successfully figured out how to “take it with ‘em”, have they? So what’s the point of accumulating beyond reason? Passing on the surplus to the next ones to come along only makes sense. Just, er, make sure they know what to do with it!

OK, now let’s get back to Ellen’s question. What would these principles mean if you substituted the words “organization” for “someone” and “people” for “capital”? All right, Ellen, let’s do that thing, throw ‘em against the wall, and see what sticks:

• Protect. An organization does its level best to protect the investment it’s made in its people. And we’re talking about a significant sum here, folks! When folks leave, it’s like a big black hole (say, what’s that giant, sucking sound?) that can drain the vitality out of any organization. It is to be avoided whenever possible. Organizations that want to protect their place in the market will do what it takes to let workers know they are important enough to keep.
• Invest. They spend resources so employees are up to speed on job skills needed to do the work. It’s another way companies signal they are worth the extra effort. It’s a risk; sure. Sometimes upgrading employee skills opens the door for them look toward other horizons. But if the nest is safe, maybe they’ll be less likely to jump, don’t ya think?
• Grow. They look for ways to improve job processes; it helps keep the organization on a track to growth. By staying ahead of the curve, organizations can make themselves the “place to be” in their industry. Truth is, everyone likes working for a winner. (You’ve seen those “favorite places to work” lists, haven’t you? Hey, it’s a choice – and there’s a cost to it; but it’s up to the organization to be that winner.
• Secure. Giving their folks the means to secure their futures is a sure-fire way of keeping them for the long haul. Adequate healthcare, retirement and other benefits go a long way to show employees they’re worth it, and that they can be more secure where they are than with someone else.
• Transfer. This one’s a toughie. Making room at the top for new ideas, new visions, and new directions. Every day sees us closer to a brand new world; the more able to see things in new ways, the more likely an organization will still be around for long. Even down in the ranks, room for new is necessary. Cycle of life, and all that.

So the question now is, does that make sense? Does this describe your company? Is it even close? If not, then what could they do to change?

So what do you think? Am I right on track, or should I do like Robert Scoble did and go back to my old job as a crash-test dummy? Thoughts, anyone?

[Note - No actual Robert Scobles were injured during the writing of this article.]

[Further Note - No offense intended, Robert; I just couldn't resist using this silly image (found here). And by the way, I know the feeling well.]

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