MAD: Human Capital, Competency & Service Cycle, leading to Internal Branding!

¹Steven Tan Chong Yew

¹ Consumer Marketing

¹(chongyew.tan@gmail.com / steven_tan@oum.edu.my)

Abstract

The evolution of the business environment has brought many challenges to the business organzation. As such, it is important for organization to fine- tunes their operation, and builds their competency, without limiting the creativity and innovation. Human capital is an area an organization can build their core competency without engaging external investment, and, it is difficult to imitate and reproduce by competitors. Yet, many companies do not realise that human capital, is in fact, an area which they can tap-on.

Keywords: Core Competency, Human Capital, Service Cycle, Internal Branding

1. INTRODUCTION

The changing nature of the business world has brought many challenges to the business manager; to cope with the changing demand in the market, as well as to face the overwhelming international and domestic market competition. As such, it is important for organization to fine- tunes their operation, and builds their competency, without limiting the creativity and innovation.

An area an organization can build their core competency without engaging heavy external investment is ‘Human Capital’, and it is difficult to imitate and reproduce by competitors. Yet, it is a management dilemma to create competencies, and with ‘constraint-knowledge’ in the field, could in turn bring pandemonium in the organization.

2. THE DILEMMA: INVEST IN HUMAN CAPITAL OR BUSINESS EXPANSION, WHICH ONE COMES FIRST?

There are many different management beliefs in the world, leading to a different management thought. One of the pervasive yet paradoxical doctrines are the saying of ‘expanding the business before investing in human capital’ or vice versa; it has inflicted much debate among the business managers; while, if the question is raised, which one would an organization prefers?

Major organizations; especially in Malaysia, are falling into the dilemma of having to make the decision in between ‘expand before invest’, or vice versa. Although, it is possible to vote for both, a wrong choice will certainly lead the organization to a catastrophic failure in human management; derail from organization vision, and leads to imbalance energy flow~ when employees start to suffer imbalance lifestyle!

3. SOCIETY IS FULL OF KNOWLEDGE WORKER, HOW TO MANAGE THEM IS DEBATABLE…

‘Managing-knowledge-worker’ has been a debatable topic in the current business environment. In order for an organization to step onto the competitive arena, they need human capital, and for that, we mean skilled and knowledgeable worker.

Years back, service industry is the only industry focusing, and investing heavily in human capital, yet in the evolution of business environment, investment in human capital is no longer confine to the service industry alone; but to any industry who wishes to transform their human capital into one of their competencies.

In relation to HR function, it is an organization entity that manages the human capital investment, and they play an important role in determining the future direction of an organization; and to create a pool of knowledge worker internally, they need to set their vision, and criteria for recruitment function to operate efficiently, and of course, congruent with organization vision.

HR no longer indulges in hiring an executive just for the sake of filling the vacancy, but to ensure that the hired executives posses certain skills which the organization can utilize for future expansion needs. Investment in Human capital can also help to eliminate ‘parasite-worker’ in the organization by giving appropriate training to transform them into one of the organizational asset. Human capital is not like a bank account; they are intangible capital of a firm toward future success. As such, it is important for organization to invest in Human Capital as a way to build their competency to strive further in the market.

4. EMPLOYEES ARE THE PILLARS OF AN ORGANIZATION

In marketing we believe ‘Money’ is the ‘Ammunition’; any marketing program will fail without sufficient monetary support; ‘it is like a war without machine-guns and bullets’. However, direct monetary value is not a panacea to any marketing problem, Human capital is. ‘Country can not fight a war without good soldiers’; similarly, organization can not compete effectively without good people. Human capital is thus a crucial investment in an organization in order to achieve the desirable outcome.

5. EMPLOYEE IS ALSO YOUR BRANDING

A leading educational consulting company founded and chaired by management guru, Tom Peters, in his article ‘Corporate Employees Clueless about Branding’; stated that "When we say brand, we normally refer to the marketing program, the logo or a dozen things associated therewith. That is not complete, and it misses the point. It is the brand inside that really matters." Tom Peter in his research found that more than 90 percent of employees do not understand how to effectively represent their company's brand.

Undeniably, employee is a service representative of an organization to the marketplace regardless of any industry. Employee is the front person who engages in face-to-face communication with customers, and they must be able to portray a good first impression of the organization. Unfortunately, many organizations do not realize that employee is their branding-pillar. Monetary investment in marketing and branding activities will not be effective, nor impact if you do no have the right people, and attitude to carry organization’s branding.

6. WHAT ORGANIZATION SHOULD DO IS TO TRAIN, AND CREATE SERVICE CYCLE BECAUSE GOOD EMPLOYEES MAKE SERVICE CYCLE BRANDING POSSIBLE

Employee branding starts with the service cycle. Service cycle is one of the branding activities that help to create total customer satisfaction; while it utilizes mainly the organizational human resource, it is a cycle used to ensure the total customer satisfaction by creating an absolute advantage to the organization and also enriching customer experience.

The branding itself is originating from how you treat your customer from the customers first contact with the organization till the end of the transaction; leading to repeated sales, and it is achievable through the service cycle. Unfortunately, only a limited number of organizations realize the importance of service cycle.

Service cycle is the micro of customer service framework, and it is the focus of each contact with customer through a continuous flow of customer communication from their first engagement with employee to another employees; which forms the total customer experience in dealing with the organization. The flow starts with the employee first contact with customer and leads the customer into another contact with the organization employees.

Taking banking industry as an example; when a customer is seeking advice for loan application, therewith the customer experience starts when customer first walk into the bank. The customer first contact may be the door man or security guard, who will lead the customer to the banking officer. After filling-up the application form, customer may proceed to meet the front desk officer as the third contact person in the organization. Each contact will determine the customer perception toward the bank while building an impressed customer experience. Of course, employee has to understand their presentation to the customer in each contact in order to create the first good impression.

Customer service is all about attitude that matter; it is directly proportional to the employee attitude about quality service, and aims to earn customer trust and subsequently their confidence in your ability to serve them. Hence, the attitude of every staff in an organization plays an important role. You can brand yourself as “We care for Customer” but still loses customers trust and loyalty if employee attitude does not show this.

7. SERVICE CYCLE IS POSSIBLE WITH CONTINUOUS TRAINING TO MOULD EMPLOYEE ATTITUDE

Service cycle will not work without the right people, and organization can not guarantee their recruitment of the ‘right people with right attitude but they believe they can nurture attitude’. Thus, managing knowledge workers also mean cultivating the right value to foster the right attitude in employee by investing in training.

Continuous training is thus important to foster the right attitude in employees to ensure an effective service cycle. Company such as Shell, Motorola and etc; are organizations that commit to provide continuous training to employees; and ensure that employee benefit given is in increasing-value. The investment in human capital, of course, it will, at the end of the day generates more revenue to company. Their fundamental belief is that ‘high employee satisfaction leads to high customer satisfaction’, eventually, leads to total service efficiency.

A frustrated employee will not fully absorb training knowledge compare to a satisfied employee. As the saying, ‘if you pay peanut, you will get monkey’; Thus, organization needs to first improve their employee benefit, and impart the right value internally before further investing in skill-enhancement-training. An organization should ensure that they are providing above-market-benefit to their employees; follow by the prerequisite training that focuses in building the correct employee personality and mindset, subsequently, design training that will enhance their skills.

7. KEEP EMPLOYEE - KEEP SERVICE CYCLE STRONG…

No organization programs can success with high employee turn-over, and high employee dissatisfaction. Organization needs to look into the ways to retain their employees and to keep their employee happy. Company should anchor their programs toward emphasizing on employee-personality-building, not just skills-enhancement.

Organization can also adopt an open door policy in their organizational-management-system by having weekly meeting with employees, giving them a channel to voice out their dissatisfaction.

No human being is willing to work for free. Organization needs to pay competitive wages to retain their employees; Organization can also pay out bonus by installments; this is when you give them a reason to work. Organization should not be parsimonious in dispersing extrinsic value to employees. It can help to construct the Organization belief of ‘employees are the greatest asset’, and enhance the perceived extrinsic value by the employees.

Most employees leave a company due to inconsiderate leader, thus, a good leader should adopt positive reinforcement such as praising employees, giving personal recognition and many more which helps to push-up employees’ morale. Leader must be people oriented. This is the Intrinsic Value that arrives in the form of motivation which the leaders have for themselves.

Investment in human capital requires not just in monetary value, but also passion and patience in creating value in organization, and it works hand-in-hand with service cycle, in so that it produces an effective employee branding.

8. REFERENCE

Becker, G.S (2002), The concise encyclopaedia of economics: Human Capital, [Online] Available: http://www.econlib.org/

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Steven Tan Chong Yew

B.A (Hon) Bus. Admin (Marketing Mgt), Anglia Polytechnic University, UK

MBA (International Business), University of Southern Queensland, Australia

NOTE: The views expressed herein are solely writer’s personal opinion. Readers may email writers at chongyew.tan@gmail.com