Scaling Human Capital

How do you scale human capital? You don’t. At least, not if you’re trying to make a high performing organization.

A common implementation of scale is in creating a form of competitive advantage (i.e. economies of scale). With such a scale, every $ you earn nets incrementally more profit than those without scale. If defended well, such scale yields a higher profit for each $ earned.

Companies build processes to scale. They build financial processes to automate reporting, bill collection, invoicing and many of the operational admin work. These processes scale as the company grows, producing more with incrementally fewer hours needed to maintain.

Most processes are improved with the use of tools (i.e. apps, Saas etc…). Tools have a leverage effect on time. With a mere 20% of the effort, you can get 80% of the results if you have the right processes and tools. This helps companies grow rapidly and operate effectively.

This doesn’t necessarily apply to people. When young companies try to scale in the name of hypergrowth, many resort to mass hiring sprees.

It’s true that a single employee in the right place and the right role can create the output of 10. Sometimes, a single idea from a single employee is worth a fortune (i.e. the guy who invented the post-it note for 3G or the engineer who made Gmail in his…