Drilling for Human Capital Reserves

Today, as I’m writing this column, oil prices are rising to almost $90 a barrel. Although that’s still below the recent high of nearly $100 a barrel, these prices are causing quite a ruckus in our country, the number-one oil consumer in the world. Everyone is debating the reasons for high gasoline prices, which include the basic law of supply and demand, political instability in oil-producing countries, capacity limitations in U.S. refineries, and government restrictions on drilling and exploration due to environmental concerns.

While there is no easy solution to this complex crisis, some experts suggest that one answer may be tapping into previously hidden U.S. oil reserves. In the western United States, the amount of crude oil in oil shale is believed to rival the proven oil reserves in Saudi Arabia. As technology advances to allow the retrieval of this oil on a large scale, the U.S. could benefit greatly from these previously untapped reserves.

For sure, I’m not an oil industry expert, but I was recently contemplating the parallels between the challenges facing the oil industry and the challenges confronting most companies today. In most industries, organizational structures were developed during the industrial age of the past century. Most are now struggling to overcome high operating costs in a global economy, victims of their hierarchies, bureaucracies, and mindsets of the past. And most have the opportunity to tap into reserves of hidden energy lying beneath the surface.

I’m referring to their human capital—the mind power of the work force, and the underutilized talents, knowledge, skills, and relationships found in the people of an organization.

I’m constantly amazed when executives and management have no problem allotting budgets for “capital equipment”—buildings, machinery, maintenance programs for software and computer equipment—and even for themselves, but then spend nothing, or next to nothing on training, motivating, and nurturing their human capital. They give little or no thought to whether the design of their organization and its technology resources supports and encourages the mind power of their people.

Workers: Assets, Not Liabilities

More than 50 years ago, management guru Peter Drucker was the first to declare that workers should be treated as assets, not as liabilities to be minimized or eliminated. It was Drucker who originated the view of the corporation as a human community built on trust and respect for workers, not just a profit-making machine for shareholders.