But it turns out, some organizations work better than others. Our appreciation of human capital has evolved. Consider the Manhattan Project, employing 130,000 individuals spread across 30 sites that for a total cost of about $2 billion (equivalent to 9 days of the war) produced the atomic bomb. Or perhaps Bell Lab’s research park that developed the transistor, information theory, solar panels and communication satellites; or Xerox Parc that provided the inspiration for Steve Jobs to design the personal computer. The recognition that human capital could be viewed differently from Frederick Taylor found its voice in the work of Nonaka and others in the Toyota Way, which recognized that the interaction of workers was what made for wealth. Those interactions, the social life of work, is a truer expression of our value creation, than simple task completion. Human capital is better described as social capital.
And this was the point that NBC missed. The savings they ‘found’, their advantage was not in determining costs at such a granular level. Nor was it in utilizing this modernized variation of Frederick Taylor; it was in having a workforce that was so socially integrated that it could work together for this common goal.
There will be a rush to emulate the University of Utah’s knowledge, the financial calculations and techniques, but these efforts will fall short because what needs to be copied cannot; it is their social network, their know-how that makes these “economic efficiencies” possible, not the calculations. Social interaction cannot be centrally commanded; it grows from well, social interaction. You can nudge it as AT&T did in arranging their labs to allow people to meet serendipitously, or by supporting and rewarding teams, not just individuals. All of our institutions have unique social capital, our real wealth comes from utilizing it.
Who’s in your social network?