Corporations Have No Skills

by Jay Deragon on 04/12/2013

broken systemsWe tend to idolize companies and brands as if they were capable of actually creating something worthy of our time, attention and money. The fact is a corporation is just a container of human capital that is used to create value for consumption. When the people leave the building the containers are nothing but empty shells.

A brand, whether it be Apple, Google, Ford, Amazon or any of the Fortune 500 companies and their products came into being when somebody (a human) had an idea and subsequently created product(s) from the idea. The idea needed funding (financial capital) in order that the person who had the idea could put additional human capital behind the idea. The idea had to be “contained”  in a legal entity for protection and commercialization according to the laws of commerce and intellectual property.

The “container” needed strategic capital (purpose) so the people (human capital) and investors could identify with its aim. The container needed structural capital (IT, processes & organized information) designed to support the strategic and human capital. The human, strategic and structural capital needed to be designed to create relationship capital so that the container serve the stakeholders of whom the container interacts with.  The corporation is the name of the “container” in which the represented intangible capital (human, strategic, structural & relationship) that the market identifies with however by itself it has no skills.

Human Capital Creates or Destroys All The Value

People love to create value, at least most of us do. But “corporations” define value differently than people do.

Seth Godin writes in a post titled “Corporations Are Not People”: Corporations (even though it’s possible that individuals working there might mean well) play a different game all too often. They bet on short memories and the healing power of marketing dollars, commercials and discounts. Employees are pushed to focus on bureaucratic policies and quarterly numbers, not a realization that individuals, not corporations, are responsible for what they do.

Those that run corporations are people. But sometimes they forget the value of human capital is in the ability to create value. When human capital is put into a container, told what to do, not recognized for contribution, has no voice, are considered an expense rather than “capital”, lied to, depreciated, pigeon holed and sacrificed for short term results it is no wonder we distrust the container and those that hide behind it.

The human network doesn’t need a container to create more value than any container could ever create.

{ 1 comment }

Matt Elson April 13, 2013 at 11:55 am

Love this article! Respect for people and their unlimited potential is crucial for organizational success. However, recognizing that we need the “container” in our current society, what could the next model be? Loose associations of people? That puts us back to the “craftsmanship” age; that’s the beauty of TPS thinking. It increases human capacity by giving us thinking aids…good processes so that our minds are free to think of the next best way to do something! Great article, Jay.

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