Human Capital: Your Earning Power Is Your Biggest Asset
In this episode of Money Lessons, Andy turns from what you earn this year to what you can earn over a working life.
He defines human capital — the competence, experience, and health an employer or customer will pay for — and measures it against the asset most families count as their largest, home equity.
Drawing on the Federal Reserve's survey of family finances, Georgetown's lifetime-earnings estimates, and the World Bank's wealth accounts, he shows why earning power is the largest asset most people will ever own, even though it never appears on a personal balance sheet.
He explains why a raise compounds the way investment returns do, why that makes skills built early worth more, and why only skills that last keep compounding.
Leaders—Be Wary of Magical Thinking
Magical thinking in business typically evidences itself as a disconnect between the capabilities, skills, and capacity of the teams that are actually doing the day-to-day work of the business, and what management believes are the capabilities, skills, and capacity of those same teams.
How to Build Empathy? Listen.
Far too often, when confronted with a challenge, we talk. We talk to deflect. We talk because we don’t know what else to do. We talk to release nervous energy. To make matters worse, when we start talking, we usually start relaying a story of a similar challenge that’s happened to us. The individual who’s going through the challenge doesn’t want to hear about our suffering or similar situation, they want to be heard.
BE CLEAR - A Continuous Improvement Tool
When purpose and vision are not clear, the status quo becomes a warm, comfortable blanket to snuggle up in. It takes discipline to get to where you want to go. When you take a look around at the “successful” people in your life, I’d put all the money in my pocket on the bet that they all share the skill of discipline.
Flow State, Part Two
If you’re a leader and are frustrated that flow is difficult for your people to experience, then make your purpose, vision, and cultural aspirations crystal clear; align goals up, down, and across the organization; respect your people by treating them as your most valuable asset; minimize waste and unnecessary organizational friction; foster a maniacal focus on the customer; install effective visual management systems; and make sure incentive systems are congruent with all of the above.
Learning is a Business Imperative
If your people truly are your most valuable asset, it becomes a business imperative to ensure that the skill portfolios of your team members are maintained and nurtured in good times and in bad—especially when the seas get rough.
A Special Video Introduction
Welcome to my first YouTube video! In this extended introductory segment, I provide a bit of insight into my background through several "icebreaker" questions and also delve into what makes me tick as a leader.
I discuss critical skills of the future and outline the importance of adopting a lifelong learning mindset and striking the appropriate balance between behavioral and technical skills.
Finally, I read a brief excerpt from my book, Balancing Act (Kaplan Publishing, 2021).
Thank you for your time.