According to De Soto, the problem with this informal and extra-legal recognition of capital is that the hidden capital can never be employed for other purposes. It is caught in a web of unexamined agreements and understandings. In the realm of human resources, this means that organizational leaders often end up asking employees to do work for which they are qualified that resides outside their formal job description. Accountability can’t be enforced because there is no formal agreement. Administrators can’t formally release qualified employees to do work on special projects without abusing the goodwill of these members of the organization. It is also difficult for leaders to respond effectively to rapid and unanticipated change, given that the old wisdom network is inherently conservative and resistant to change.
This informality also often yields inequitable treatment. This is probably its most destructive feature. Some employees are inevitably left out in the cold because they are not inside the “wisdom” network—they are not one of the “old boys” or “old girls.” Their unique and valuable knowledge, skills and aptitudes is never known or fully appreciated; hence, they are never given the chance to release their full human potential. They remain stuck in unrewarding jobs and are never given a chance to compete on a level playing field with those who reside inside the wisdom network; furthermore, the organization is foolishly ignoring this hidden human capital, hence never releasing the full potential of this capital. The capital remains stored behind the dam. SKAs remain unused.
An organizational consultant can help her client begin De Soto’s conversion of invisible into visible by assisting him in establishing an appreciative Human Resource Bank. With this bank, the client and other leaders of his organization are acknowledging that their employees have acquired knowledge, skills and aptitudes in the past that may or may not be used on the job for which they were hired. Furthermore, an effective HR Bank will be continually updated. Leaders of the organization recognize that new knowledge, skills and aptitudes continue to be acquired by members of the organization.
This new knowledge, and these new skills and aptitudes, are being acquired by employees through their ongoing experiences on the job, through their short-term assignments to individual tasks and various group projects, and through the education and training they receive. Employees are also acquiring new knowledge, skills and aptitudes in their activities outside the organization and in their accumulating wisdom as people who manage complex lives on and off the job. In building a useful HR Bank, it is essential to keep these various sources of SKAs in mind.
