A couple of weeks ago I wrote about the astonishing shift in corporate valuations (here) – from overwhelmingly reliant on tangible assets to overwhelmingly reliant on intangible assets. I wasn’t alone in noticing this research. Aon Hewitt did as well. And mentioned it in an interesting executive brief, People Fuel Growth, The Role of Human Capital in Maximizing Growth.
What’s noteworthy about this brief, that reports findings from their recent study, is its organizational growth model that makes organizational strategy less of a focus than the people strategy. In other words, “people (culture) eat strategy for breakfast.”
Take a look at their simple growth model:
Two of the external environment challenges noted in the brief are worth mentioning:
- 70% of FORTUNE 1000 companies have disappeared in the last 70 years
- Corporate profits peaked in 2015 and appear to be trending downward
These, together, with the results of pretty dramatic demographic shifts mean that as people are the driving force of corporate value, they are becoming themselves more valuable and more important to business growth. It’s pretty inescapable that people do, in fact, drive growth – and not through execution alone.
I look forward to seeing the complete study analysis that will expand on the conclusions in this brief.