Summary of Key Points
This news article focuses on the idea that "organizational capability is the key to corporate competitiveness," citing the views of Juric, often referred to as the "father of global human resources." It emphasizes that 80% of a company's market value comes from intangible assets, of which human capital competitiveness (the combined effect of talent, leadership, and organization) accounts for nearly 30%. This indicates that human resources have evolved from being a "soft factor" to a "hard indicator" that affects valuation and growth. However, many Chinese companies still treat HR as a "cost center," facing issues such as internal inefficiencies, broken talent chains, and ineffective HR practices. Ran Tao, former head of recruitment at Huawei, illustrates through real-life examples and practical experience that the essence of an organization is its ability to win battles. HR should shift from a reactive role to providing strategic support. The next generation of leaders must inherit not just positions but also a comprehensive management system; otherwise, they may repeat the mistakes that led to the collapse of Shimao Group within four years.
Detailed Explanation
1. Why has human capital suddenly become a "hard indicator"? – A shift in perception from a cost to a profit-generating asset
Juric's data is striking: 80% of a company's market value is derived from intangible assets, with human capital competitiveness accounting for nearly one-third of this. This means that companies are now competing based on their ability to continuously create value for customers through their organizations, as people are the most active creators of value.
Ran Tao provides an example: In the manufacturing era, it was enough to produce products; but in today's knowledge economy, the creativity of employees directly determines the quality of products, which is a core value for companies. Many managers complain about having plenty of staff without significant output, often due to poor HR management. They are willing to invest in advertising and research and development but reluctant to allocate resources to HR, resulting in an inefficient organization where top talents cannot be retained, and intangible assets are severely devalued.
For managers, the biggest paradigm shift is recognizing that human capital is no longer a cost but a valuable asset that can generate returns—just as equipment produces products, good talent and an effective organization generate profits and market value.
2. The "internal loop dilemma" of HR: Why do companies engage in internal discussions without impacting customers?
Juric criticizes companies for focusing on internal values while claiming to have strong organizational capabilities, yet customers don't perceive this. This is a common problem in Chinese businesses. Apart from sales, other departments rarely interact with customers, and external pressures are filtered out by the sales department. Companies are driven by internal goals rather than external opportunities.
HR faces additional challenges: they have limited access to external information and lack influence over key departments like R&D and marketing. They often prioritize maintaining harmony at the expense of solving practical problems. Some HR professionals come from backgrounds in payroll or recruitment and lack empathy, leading to a rigid and ineffective approach that fails to build trust. Some even use political tactics to advance their careers rather than addressing real issues.
As a result, HR uses theoretical frameworks (such as those mentioned by Juric and Drucker) as excuses for not solving practical problems, turning their work into an internal "language game."
3. How can we determine if an organization is truly strong? – How to bridge the gap between strategy and execution?
Many companies claim to have clear strategies, but Ran Tao points out that they only know what they want to achieve; they lack a clear understanding of how to accomplish it. For example, semiconductor companies may enter new markets (such as automotive or AI) driven by market trends, but this is not a true strategy. Even if the direction is correct, there can be a disconnect between management and the team: while management sees opportunities, the team may see challenges. The key to a strong organization is having a system that translates strategy into actionable plans, aligning goals, strategies, action plans, and resources to form a closed loop. For instance, instead of simply saying "we want 50% growth this year," companies should ask: "Which customers can contribute to this growth? How many salespeople are needed? How can we motivate them?"
Organizations that rely on individual heroes and luck may seem strong on paper but collapse in reality.
4. Where do talent chains often break down? – How do companies turn assets into costs?
Juric emphasizes that the process of attracting and retaining talent is a continuous cycle, but Ran Tao identifies three common pitfalls:
- Wrong entry points: Recruitment focuses on experience rather than potential. For example, hiring someone suitable for a traditional role may prevent them from contributing to a company's transformation.
- Mid-level bottlenecks: Incompetent managers prevent talented employees from thriving, keeping only those who are obedient but less capable.
- Poor exit mechanisms: No one wants to offend others, so when it comes to layoffs, new employees are scapegoated, and the right people are not replaced.
The most fatal mistake is not establishing clear rules for hiring, promoting, rewarding, and dismissing employees. Without these principles, organizations use personal interests to guide decisions, turning talent from an asset into a cost.
5. What should the next generation of leaders inherit? – The lesson from Shimao Group
Shimao Group's success in its early years was followed by a rapid decline in just four years. Ran Tao emphasizes that the next generation must inherit a management system, not just positions. When a founder retires, they should leave behind a set of rules for hiring, empowering, evaluating, motivating, and dismissing employees. A strong system ensures that everyone operates within established guidelines.
The next generation of leaders at Shimao was eager to prove themselves and used outdated methods during a tough industry period, lacking a solid organizational foundation. In contrast, companies like Country Garden and Vanke have systems in place that allow them to remain stable despite industry challenges.
In private enterprises, the most important aspect of leadership transition is re-establishing an organizational system. The common sense here is clear: individual heroism will eventually give way to organizational capability. Without a solid system, even the most talented individuals may fail.
Conclusion
The core of modern corporate competition lies in an organization capable of winning battles. Those who still treat HR and organizational development as trivial tasks fail to understand the true nature of competition.
(End of article)