Article Question



Question:Ngah and Ibrahim remark that to refine their objectives andincrease their success in operating their business, small or mediumenterprises (SME) must understand their own capabilities, especiallytheir internal strengths. Their people, practices, and support areimportant in assisting them to be innovative in order for them to becompetitive. How can organizations best leverage human capital forinnovation and competitive advantage? Why is this method best?

Ina global economy that is driven by information, a firm’s workforceis its most imperative feature as well as one of its greatestinvestments (Afiouni, 2009). In the challenging economic environmentmanagement of human capital that encompasses workforce’s knowledge,skills and experience is pivotal. A study conducted by ConAgra FoodsInc. (2008) shows there is growing trend in the past few decades incompanies where more value is being placed on human capital. Thismeans that firms have recognized the import of leveraging humancapital for competitive advantage and innovation (Lumbra,2014).It all begins with the fundamental measurement of the effectivenessof all aspects ranging from training programs for the workforce tofinding ways to improve engagement and motivation. Premium analyticis also paramount to help the management t make decisions on groomingtalent, searching for ways to maintain it and applying methods torecruit it (Afiouni, 2009).

Humanresource management should develop a functional method through whichthe company can measure human capital. For example, Fortune 500firms have elaborate and sophisticated analytical tools to measureworkforce efficiency (Lumbra, 2014).Large companies such as Google, Intel Corp and Marriott InternationalInc. have all created human resource analytics teams to get a betterunderstanding of conduct, potential, behavior and risks inherent withtheir workforce. This has been made possible by the availability ofcheap technology, and these organizations have seized suchopportunities to access software and data, such as statisticalmodeling products (Lumbra, 2014).

Managementsuccession is another important element in building a capable humancapital that will drive the company to higher heights. Small andmedium enterprises need to rigorously drive through the culture ofinnovation and talent throughout the firm and recognize theirfiduciary duty to control and monitor succession planning at alllevels of the firm (Harvard Business Review. 2012). With mainmeasures and data in place, the top management has the informationthat can quickly align strategy with implementation. HR analyticsand information systems are used to build intelligence that can beentrenched in business processes ranging from compensation review,staffing changes and talent evaluation to workforce planning (HarvardBusiness Review. 2012). Deep contextual information can be gatheredquickly on business units, individual and talent pools to understandand solve the challenges that can support innovation and improvecompetitiveness.


Afiouni,F. (2009). Leveraging human capital and value creation bycombiningHRM and KM initiatives. InternationalJournal of Learning and Intellectual Capital, Vol. 6, No. 3

HarvardBusiness Review. (2012). Taking Measure of Talent. HarvardBusiness Review Analytic Service Report.Available at:

Lumbra,R. (2014). HumanCapital: Leveraging Your Company’s Greatest Asset. CorporateBoard Member Magazine.