human capital risk, cover, Toby Elwin, blog, beta, investment

Human capital beta is investment risk beta

Human capital management is motivation management.  No matter the IQ of an individual or the collected experience of the team without motivation there is opportunity lost. Human capital risk is real, but mainly divorced from analytic and assessment rigor. There is something missing in how to evaluate a a firm opportunity risk. To maximize return on investment you need to maximize return on involvement. I’ve worked in post-merger integration environments for more than 15 years and until you account for the talent you acquire, you have not accounted for risk. Starting in 2007 I began to think about how to evaluate talent and human capital risk in initial assessment.  This deck was a working draft of my thoughts with the objective to sit in a room and deliver a true, front-end human capital assessment to an investor. You can download Adobe Acrobat or PowerPoint version just …

competing values framework, Toby Elwin, blog

Hiring the right person is more cultural than technical

As mentioned in the post Hiring is more emotional than rational technical skill rarely assures success in an organization.  There are just too many elements that impact someone’s success that are more important than technical fit. Many times when you plant an individual into a team, business unit, or client site there is potential damage that no amount of technical skill can hide:  personality clashes, culture clashes, communication gaffes, and other social or relationship awareness miscues are a few with the potential for huge impact. Hiring is more of a cultural match than a technical match, at certain levels you can expect people are smart enough to build or expand their technical skills, but can you expect them to build their personality skills. These problems can be immediate or on a slow boil, but make no mistake these problems affect morale and motivation …

darth vader, small business, growth, strategy, Toby Elwin, blog

When a small business should fear growth

Your small business does not have the culture to succeed as a big business.

Initial ad hoc procedures may prove to drive those early revenues and perhaps the same procedures can manage a firm’s expansion to 30 employees, 75 employees, or 100 employees.

As the growth of a firm increases the amount of interactions and the dynamics of each interaction become more important. Repeatability, scalability, and human capital strategies are vital to have in place before growth.

With a Competing Values Framework your current culture and future culture present present your roadmap for intentional growth.

nfl, recruiting, strategy, round, irrelevant, Toby Elwin, blog

The NFL draft and your company recruiting strategy (round 2)

The NFL draft reveals all things wrong with talent acquisition and recruiting. Looking at how an NFL team drafts provides terrific insight into what you and your company can improve upon. I wrote in the last blog, The NFL draft and your company recruiting strategy round 1, a sample list of the assessments an NFL team uses to evaluate fit: 40 yard dash, Bench press, Vertical jump, Broad jump, 20-yard shuttle, Three-cone drill, 60-yard shuttle, Position-specific drills, Physical measurements, Injury evaluation, Drug screen*, The Cybex test, The Wonderlic Test, game film* [work samples], scouts and coaches who attend games, interviews*, and recommendations* That list, like your interview and recruiting strategy, is intended to project future performance, but like all the great financial advisors tell us, “past performance is not an indication of future results”. The asterisk next to some of their tests …

change management, bottom up, top down, Toby Elwin, blog

Change management bottom up or top down

Classic change theory: leadership drives change and leadership needs to commit for change to work. Seems to make sense, but in reality leadership is irrelevant. The organization’s ability to change is dictated by operational units and employees, not leadership. The reality: culture eats strategy for lunch. Your workers dictate change and strategy. Leadership doesn’t drive change, total quality management, Lean manufacturing, or Six Sigma. None of it relies on leadership. Change relies on culture and in the case of culture, leadership is along for the ride and rarely in the driver seat. The reason your organization changes fail is you continue to believe change has to do with you. Organization change management has little to, and everything to, do with them. Organizations change for their reasons, not yours, not the stockholders, not the competition, not the tax payer. Capsize to …

Borg, Competing Values Framework, Toby Elwin, Star Trek

Competing values drive your organization out of business

Change very often comes in multitudes and magnitudes, rarely in order and procedure, but change resistance seems to come in constant waves.

A Competing Values Framework will identify your current state organization strength and desired state.

Organizations that understand competing values and the impact of culture can train and manage and cultivate people who can grow with the organization. The Competing Values Framework identifies the culture people are working in, any disconnect, by team or business unit, to then create strategies that align to the culture needs to challenge the culture.

What to keep and what focus to adjustment needed to survive or to excel.

VC’s missing formula, discounted cash flow, human capital, alchemy,

The VC’s missing formula: human capital discounted cash flow

Accounting assigns of assets and liabilities and financial management’s current or pro forma valuation both rely on art and interpretation more than any professional standard, science, or law. What valuation models measure human capital ability to meet financial and strategic business goals? What formulas are used to measure human capital contribution to profits? What are the human capital risk factors you justify when you build your financial statements and projections? Organization valuation usually involves four areas: Physical capital, Financial capital, Intellectual capital, and Human capital Both accounting and financial management start with familiar industry formulas to measure physical, financial, and intellectual capital. The departure from formula comes with asset classification and subjectivity of inputs. You most often witness this in the beta, or the numerical representation of risk, used in the discounted cash flow formulas on glitzy, initial public offering, road shows. …

Red Sox, Yankees, competing values, Toby Elwin, blog

Competing values drive organization resistance

Organizations, like people, develop.  A start-up has different organization qualities than a 25-year-old, Fortune 500 company.  As operations increase in scale and scope a start-up faces new pressures.  Each increase in production, staffing, or market share increases their operating risk. What worked as a start-up company with a staff of 5 and $500,000 in revenues can no longer manage the same way with a staff of 85 and $2.5 million in revenues. Merely doubling the numbers, however, risks compounding the challenge of planned, intentional human capital growth to meet financial and intellectual capacity. Competing Values is Not Myers Briggs Frustration over organization culture, values, and communication many times comes down to values and interpretations: enter the Myers-Briggs Type Indicator (MBTI) assessments that seem the rage. The MBTI assessment focus on the individual and the individual to convey and manage both …