Imagine for a moment if the Beatles had been a company. The “top talent,” as defined by the CEO, leadership team and Human Resources department, would clearly have been the musicians and singers known worldwide as John, Paul, George and Ringo. These Fab Four, who had a big hand in changing the music world, were essential to the company’s sound, brand and ultimate business success.
Of course, these four didn’t work alone to transform themselves into the best-selling band in history. They had the help of managers, producers, recording engineers, roadies, guitar tuners and countless other individuals, all of whom played important supporting roles that ensured that audience members and customers got what they paid for.
Now, let’s consider the guitar tuner and his value to the company as a whole. The guitar tuner was important to the band’s sound and brand, but the fact remained that the tuner was not nor ever would be a Beatle. If the guitar tuner quit, it might be an inconvenience to the band, but it wouldn’t be as devastating as if Paul quit. Paul was a “top talent” and losing him could mean the end of the Beatles as a company.
The fact is – and this can be a bitter pill for most of us to swallow – although all people are equally important as individuals within our society, some are critical to a business because of the roles they play now and the roles they could play in the future. The enterprises who can shift their mindset to recognize that some roles (and the people in them) are more valuable than others can begin to make more informed and strategic talent decisions.
People are the unique source of the intellectual capital value that has become the largest underlying element of most companies’ market capitalization. But how does a company determine which roles are truly essential to delivering this value to the business? Who are the company’s Fab Four… or five? That’s where critical success factors (CSFs) to creating a company’s intellectual capital enter the picture.
Define Your Critical Success Factors
Given the importance of human capital to the valuation of businesses, companies must understand which roles are the most critical to a business’s success in order to focus talent resources and efforts on these strategic areas. CSFs are those things that must be done well in order for a business to grow the intellectual capital that drives cash flow.
In order to use CSFs to drive effective talent investment, companies should:
- Identify intellectual capital: Find and articulate the principal components of intellectual capital that provide value to the business (brands, patents, formulas, technologies, relationships, etc).
- Outline critical success factors: Determine the list of things that must be done well to maintain and grow the value of intellectual capital components.
- Rank CSFs: Accurately prioritize and clarify CSFs because the top few will disproportionately drive success or failure.
Manage the achievement of CSFs: Organize work, processes and critical roles in a way that optimizes them for driving business results. Invest in all aspects of the critical roles.
