Twin Challenges

The United States is facing two major human capital challenges. These are not passing problems. These are, "the big one," as Fred Sanford used to say. The twins are leadership and culture management. Since culture is a derivative of the vision of the leaders, we will take on leadership this month and culture next month.

Once Upon a Time
About fifteen years ago American business decided it had middle age spread and had to go on a crash diet. This meant that we didn't need all those middle managers as information conduits. We were seduced into believing technology could manage information better than people could. Over the next few years, well over one million managers lost their jobs. In some cases, the reductions in forces (RIFs) were justified. Many companies had taken on two much weight in the midsection.

The Picnic
Through the mid-1990s we continued with an unending number of small RIFs as we tried to save our way to salvation. But by 1998, with the dotcom boom came the realization that perhaps we had cut too much. New organizations sprang up overnight. Fueled by crazy ideas and greedy investors, these new companies had no one with experience to manage them. "Never fear," was the cry. "The old economy is dead. We don't need them."

Not Happily Ever After
In April 2000, it started to rain on our economic picnic. Before the sun came out again, the deluge had washed out the picnic for good. As we struggled to restart, the shortage of seasoned leaders was apparent. We faced a ten-year gap of inexperience. The middle managers of 1990 normally would have been prepared for senior slots in 2001. But they had been RIFed. Now what?

Facing the Facts
The underlying truth of business today is that much of it alienates humanity. Our DNA is not prepared for instantaneous global communication and the stress it brings. Continuous deep change, unrelenting competition from every corner, demanding customers, the information swamp, constant need to learn and relearn all press down with ever increasing speed and weight. We need leaders, lots of them, and now.

HR to the Rescue
If there is any group that can accelerate the growth of the new generation of leaders it is HR. Only HR has the objective viewpoint, the developmental systems and the charter to take on the challenge. The question is where to start.

An ineffective approach is to grab the latest leadership model and mainline it into the corporate arteries. A worse approach is to have no model at all and simply throw the fad of the month into the mix.

A Workable Solution
Peter Koestenbaum presents one of the soundest models of leadership. Koestenbaum, a retired philosophy professor, executive coach and author of Leadership: The Inner Side of Greatness, (Jossey-Bass, 2002), argues that the more we understand the human condition the more effective we are as human beings and as business leaders. He offers two paths to leadership. One he labels authenticity. This includes our identity, character and attitude toward life. All great leaders knew themselves, for better or worse. The other path he calls competence. This is composed of skill, knowledge and know-how. Being able to move people through persuasion rather than force is a definition of leadership. The beauty of Koestenbaum's model is that it applies everywhere.

HR can work both of these paths. In the first case, we can become confidants of budding leaders. We can talk with, listen to and coach people who are trying to learn how to be a leader. In the second instance, we can build experiences through which people can be educated and work situations wherein they can practice and learn. By working with the top executives canny HR professionals can make a major contribution and in the process naturally become strategic partners.

Dr. Jac Fitz-enz is the father of human capital benchmarking and workforce analysis. He carried out the original research on HR measurement in the 1970s and followed that by publishing the first human capital metrics in 1985. As the founder and chairman of Saratoga Institute, he led the development of the world's most comprehensive human capital benchmark database. Prior to founding Saratoga Institute in 1980 Dr. Fitz-enz held human resource vice presidential positions at Wells Fargo Bank, Imperial Bank and Motorola Computer Systems.