In this episode of Executive Connect, Melissa Aarskaug sits down with Dr. Cynthia Bentzen-Mercer, USA Today bestselling author, executive coach, and longtime human resources leader, to rethink how organizations hire, develop, and invest in talent.

Cynthia challenges the traditional view of employees as a labor cost and introduces a different approach: treat human capital like an appreciating investment portfolio. She explains why outdated hiring filters can cause companies to miss high-potential talent, how natural ability can matter more than a perfect résumé, and why finance and people strategy should never operate separately.

The conversation also covers Cynthia’s human capital portfolio model, the value of workforce diversification, career ownership, high-potential talent, and the uniquely human skills that become even more important as AI changes how work gets done.

Chapters:

(0:17) Meet Cynthia and rethink human capital

(1:07) Why people should not be treated as costs

(3:41) Human capital as an appreciating asset

(6:15) Investing in people instead of minimizing cost

(6:44) Cynthia’s human capital investment strategy

(7:36) Applying financial portfolio thinking to talent

(8:39) Assessing performance and potential differently

(9:17) Why leaders need to take calculated talent risks

(10:04) Evaluating risk across your people portfolio

(12:26) When finance and people strategy separate

(15:28) Taking ownership of your own human capital

(16:41) Staying relevant in a changing workforce

(19:10) Building a high-performing human capital portfolio

(20:14) Cynthia’s four-quadrant talent model

(21:01) Keeping top performers engaged

(22:17) When experience hides limited role fit

(23:09) Recasting people into roles where they thrive

(25:44) Moving beyond résumé-driven hiring

(26:12) Why outdated hiring filters still fail

(27:57) The problem with hiring on gut instinct

(29:31) Hiring for natural talent and role fit

(31:31) Why workforce diversification creates an advantage

(32:12) How diverse perspectives expand markets

(38:21) Building systems for high-potential talent

(39:15) Rethinking traditional job descriptions

(42:34) Hiring for minimum skills and maximum potential

(44:01) What AI means for the future of work

(44:58) The uniquely human advantage

(49:06) Where leaders should begin today

(51:43) How to connect with Cynthia

Cynthia

(0:00) If you think about a four quadrant model and you consider that you’re going to do an accounting of your human capital, what I advise is who are those individuals that have extremely high talent for role and high skill and knowledge, right?

Melissa

(0:17) Never feel like you’re stuck at a green light that never actually comes. (0:23) Whether it’s the right time, the perfect hire, or the myth of being ready, today’s guest says forget all of that. (0:33) Meet Dr. Cynthia Benzin-Mercer, USA Today’s best-selling author, executive coach, and unapologetic line mover. (0:44) She’s here to challenge everything you think you know about potential leadership and why playing it small is officially out. (0:53) Buckle up, this episode might just redraw your whole career map. (0:58) Welcome, Dr. Cynthia. (1:01) It’s so good to be with you again, Melissa. (1:03) Good to see you. (1:04) Thank you for being here today.

(1:07) I’m excited to chat with you. (1:10) Now, we have a lot of great things today to talk about, and let’s first start with one of the most important questions. (1:20) We’re going to talk about the bold premise.

(1:23) People are no longer just a maintenance cost. (1:27) You open your book with a very bold statement. (1:31) You can’t expect human capital level returns if you manage investment in people like maintenance costs.

(1:39) Walk me through that, and why is this such a wake-up call for talent?

Cynthia

(1:44) Yeah. (1:45) So, you know, Melissa, as I reflected on my first book, Now Near Next, which is really directed to the individual woman, one of the things that kept eating at me was, yes, we need to have agency. (1:59) We need to take control of our careers.

(2:01) We need to be more intentional. (2:03) But the reality is organizations, having spent 35 years in human resources and a lot of industries, organizations are still using very dated filters in terms of how they think about their human capital. (2:17) And when I mean human capital, you have human capital.

(2:21) I have human capital, right? (2:22) We have skills, knowledge, natural talent, experiences that we choose to show up with, that we choose to bring to an organization, and an organization chooses to bring us aboard if we’re working for somebody else. (2:37) What happens so often, and I think that the reality is this, I give CEOs and leaders grace.

(2:43) I don’t think it’s intentional. (2:45) I think we’re just using outdated models, right? (2:48) And so we say people are our greatest asset.

(2:52) I believe majority of leaders believe that. (2:56) But the bottom line is when financials get difficult, we become a labor cost. (3:02) And where many organizations go first is their biggest expense, which is payroll, and they start layoffs and reducing and so on and so forth.

(3:12) What I am wanting folks to think about differently is when you change that narrative, when you invest strategically, intentionally, with rigor in your human capital portfolio, the same way you do your financial portfolio, you will have competitive advantage. (3:29) You will minimize that whiplash that seems to come on, for some companies, an annual basis, where they’re expanding and shrinking and expanding and shrinking.

Melissa

(3:41) So true. (3:43) Okay, so let’s talk a little bit about human capital as an appreciation asset. (3:49) You argue that human capital is not just a resource, it’s an appreciation asset.

(3:55) I love that. (3:56) I think that’s brilliant. (3:57) How does that change the way executives think, plan, and make decisions in their corporate life?

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(4:16) Don’t just watch, act.

Cynthia

(4:18) Yeah. (4:18) So right now, so many leaders, CEOs, entrepreneurs, et cetera, are throwing a lot of money into technology. (4:28) And I’m a fan of technology.

(4:29) I know you’re a fan of technology. (4:31) You live in that space. (4:32) But we’re undervaluing and under resourcing and underinvesting on the people side of things.

(4:39) And my belief is, and my point of view around that is, we are not going to get rid of humans. (4:45) There will always be that which is the uniquely human advantage, right? (4:49) That has to take that technology, integrate with that technology, and take things, elevate things to a new level.

(4:55) If we are not paying as much attention to what talent we’re bringing into the organization, how we’re positioning that talent around that technology, around that automation, we’re going to be caught flat-footed. (5:09) We’re going to be over-invested in a lot of things and not have the human capacity that knows how to ultimately leverage that technology for the benefit of our customers. (5:25) So for me, it’s your human capital.

(5:28) When you invest in your talent and your growth, it appreciates. (5:31) It’s worth more. (5:32) So to the individual listening, invest in your own human capital.

(5:37) It’s an appreciating asset, right? (5:40) The more you invest in growing your talent, building your skill and knowledge, the more valuable your human capital is to the workforce. (5:49) And the more leaders think about that in terms of their portfolio, they’re able to really elevate what is able to accomplish.

(5:56) And I would argue it is a force multiplier. (5:59) You get more out of every individual heart or nose, however you want to think about it, when you’ve invested in the right human capital than having a massive amount of people that do above average work.

Melissa

(6:15) I agree. (6:16) I think it’s a shift of the mind. (6:19) I think you need to think about people from an investment point of view, not a cost point of view.

(6:27) And so it’s really interesting to me that you mentioned that because I think you’re spot on. (6:34) People are investing in technology and they don’t want to invest too much in people for fear that they might leave or they might go somewhere or they might get overeducated and, you know, do something else. (6:44) So let’s talk about your six step strategy on human capital.

(6:51) So it mirrors how investors build a financial portfolio. (6:55) Can you walk us through one or two of those steps and how leaders can actually apply those today? (7:02) Absolutely.

Cynthia

(7:03) So one of the things I thought happened, have a little copy right here with me for those watching. (7:08) One of the things that occurred to me, again, having spent a lot of years in HR and as a CHRO and then later as a CAO, worked with a lot of CEOs and investors, is that you have to speak the language of business. (7:25) And so how do you get the attention of the leader who is just not been introduced to this concept of humans as an appreciating asset or human capital as appreciating asset?

(7:36) So with that backdrop, it occurred to me that if I use a financial model, does that then resonate? (7:43) Does that become the metaphor that speaks the language of business? (7:46) And so when you think about, well, how do you invest in your financial capital?

(7:52) How do you invest in the funds that you have sitting in your retirement account, et cetera? (7:57) You establish a pro forma. (7:59) You have goals around that, right?

(8:01) So you think about what are my goals? (8:03) What’s my date of retirement, et cetera. (8:06) And you’re building a plan and a path.

(8:09) Organizations need to do that with their human capital. (8:12) What is my strategy? (8:13) What is my goal in the next two, three, five years, however you do your strategic planning?

(8:20) What does my people portfolio need to look like, be doing, be ready for to accomplish that goal? (8:27) Again, we often think about it in terms of bricks and mortar technology, diversification of our products or services without thinking about that human component. (8:39) You have to assess your portfolio.

(8:41) If you had an underperforming fund in your financial investment portfolio, you would likely over time remove that fund or replace that fund. (8:54) Too often we drag our feet with underperforming individuals for a whole variety of reasons, right? (9:02) For a whole other podcast.

(9:03) In the same vein, if you had a fund that was, you were uncertain about, you might say, I’m going to put that on a caution. (9:11) I’m going to, that’s on the watch list. (9:12) I’m going to see how it performs quarter over quarter and make a decision.

(9:17) And thirdly, there are times where we need to roll the dice. (9:21) There are times, Melissa, I’m sure this is true in your investment strategy, where you hear of something you’re like, it’s not widely known, but I’ve looked at the pro forma. (9:31) It has a great upside potential, right?

(9:35) It’s a little bit of risk, but I know we can mitigate that based on everything else we’re doing. (9:40) And you roll the dice on the potential of that fund. (9:45) That’s where most organizations fail when it comes to their human capital portfolio is that they’re not willing to look at potential.

(9:55) They think that they’re going to focus on, Oh, they’ve got this many years of experience. (9:59) They’ve done these things, et cetera. (10:01) And they believe that to be tried and true and risk adverse.

(10:04) The reality is it’s probably one of the most risky things you can do because we’re using non-predictive measures. (10:09) And I won’t go through all of them, but it goes on to how do you stratify risk? (10:14) And risk comes in a lot of ways in your people portfolio.

(10:17) What is your flight risk? (10:19) What is it? (10:19) What do you, what do you have in the way of known turnover?

(10:22) How is your brand showing up in the workplace? (10:25) There are so many places that we can assess risk, balance our allocations. (10:30) Do you have an aging workforce and you don’t have enough generational point of view?

(10:36) Do you have a gender diversity issue? (10:40) Do you have a race ethnicity diversity issue? (10:42) There’s so many ways that we can think about that portfolio from a, um, a balancing perspective, expand your options, and then re-forecast.

(10:53) This isn’t a one and done. (10:54) This isn’t a go evaluate, do these six steps and then tick the box and say, I’m done. (11:00) This is something you’re constantly looking at.

(11:02) You would not leave your investment funds to your investment manager to just run indefinitely without having some kind of biannual quarterly touch base, same thinking.

Melissa

(11:16) And I love that. (11:17) I think it’s interesting because as you’re talking about this, I’m thinking about all the roles I have had in my career. (11:25) And I would say I was probably under qualified for every single one of them.

(11:31) And so I was one of those risky hires that you’re talking about. (11:36) I think about my last role, I had no experience in gaming, no knowledge of the industry, no compact. (11:42) So really on paper, I was a really risky investment, but I stayed at that company for almost 14 years.

(11:49) So it, it panned out, but I think you’re right. (11:53) I find that a lot of times in hiring almost 20 years and taking a hiring, being a hiring manager, that some of the people that were the best on paper, they fit all the boxes. (12:06) They checked all the boxes.

(12:07) They interviewed the best. (12:08) They had the best resume. (12:10) They worked for the biggest companies.

(12:11) I found that sometimes several of those were the worst hires I ever hired. (12:16) And sometimes the riskier hires that had the right attitude were the best hires I’d ever hired in my career. (12:24) And so I love that you’ve said that.

(12:26) Let’s talk a little bit about when finance and people get divorced. (12:31) You emphasize that finance and human capital strategies can never be separated. (12:37) So talk to me a little bit about when that happens and leaders treat talent as an expense instead of an actual investment.

Cynthia

(12:48) Yeah. (12:49) So I’ve been fortunate in the brands that I’ve worked with and for and, and this was very part, much part of my own due diligence and coming aboard with these organizations that there was at least at the point of entry that the CEO understood the value and importance of the human resources and the human capital function. (13:12) But what I see largely is anytime you’re making your, your strategic plan, you are doing your budgeting, you’re doing your financial forecasting.

(13:25) You’re thinking about again, what that strategy looks like when you decouple the people element gets kind of harkens back to the earlier point. (13:35) You you leave a lot of money on the table and there’s a lot of cost involved in that, right? (13:42) So what happens is we want to make this amount of money.

(13:47) We have this growth strategy. (13:49) We’re going to do it through a balance of organic growth and a balance of acquisition, all of these things we put into place. (13:56) If nobody’s thinking about, well, who are the human beings that are going to integrate that acquisition that are going to be responsible for leading that additional group of folks, the infrastructure that people will have to support in that strategy expansion or in that portfolio diversification, if it’s, you know, a product industry, et cetera.

(14:23) Very often that’s the, that happens. (14:25) And then there’s this sort of aha moment after it’s almost too late, right? (14:29) We’ve invested in these things.

(14:31) And then we’re wondering, well, why hasn’t it gone smoothly or, or why are we behind or why did our quality suffer? (14:39) And it’s, it’s directly because we didn’t think about if this is the growth strategy, what is the parallel human capital strategy that must be in place to support it? (14:54) And I get very concerned when HR data metrics, et cetera, are relegated to the human resources department.

(15:05) It’s sort of like, well, we’re doing strategy you guys go do HR. (15:11) The reality is that’s a collaborative effort, right? (15:14) Your human resources person should be one of your most strategic business partners.

(15:19) That’s at the table, figuring out whatever you want to do. (15:23) How do they execute it through human beings?

Melissa

(15:28) I love that. (15:28) Now you talk a little bit about people as active investors of their own capital talk. (15:36) Help me understand what that means for engagement, retention, and the future of leadership.

Cynthia

(15:42) Yeah, I think there’s two sides of that. (15:43) And that part of this came out of my first book now near next, which is, we know that statistically you and I’ve had this conversation. (15:51) Women are really conditioned to put your head down, work hard and wait to get tapped.

(15:56) Women and people of color I’ll mention. (15:59) And because we’re so busy or a variety of other reasons, we kind of go, that’s a convenient path. (16:07) I’ll just put my head down, work really hard.

(16:10) And when it’s my turn, somebody will tap me. (16:13) And you and I both know that business doesn’t work that way, right? (16:16) You have to have agency over your own career.

(16:20) This loyalty to company, loyalty to boss is a thing of the past. (16:24) And I don’t say that to be critical of organizations and leaders, but the bottom line is companies are going to do what makes sense for the good of the whole. (16:36) And you may be a victim of that, of that ultimate decision, right?

(16:41) So you have to have agency. (16:43) So there’s two parts of investing in your own human capital and why that’s so important. (16:47) Number one is you have to stay relevant.

(16:50) The two things I hear are companies are worried about staying relevant, especially with technology and people are worried about staying relevant. (16:58) You need to have agency over your appreciating asset. (17:02) How are you remaining relevant?

(17:04) What new knowledge skills do you need to develop? (17:08) And most importantly, how are you leveraging what makes you uniquely human? (17:13) If you know that part of your job can be automated or part of your job is an easy thing in chat GPT, right?

(17:23) Then what about you? (17:25) What about what makes you uniquely human? (17:27) Can you take and utilize that?

(17:30) Let, let technology do the busy work. (17:32) Then how do you leverage that with your own natural talents? (17:37) But the flip side of that and where human capital investment strategy comes in the new book is leaders need to tap people, ask about their career path, intentionally invest in them.

(17:52) Look for the potential that you mentioned. (17:54) You were hired based on natural talent, more than skill and knowledge. (17:58) Didn’t have gaming experience.

(18:00) That’s a knowledge thing, right? (18:02) But somebody saw in you this big leadership talent, this charisma, this high relationship, strong connector, great in sales. (18:10) And they said, those things are transferable.

(18:13) We can teach the insights of gaming. (18:17) We can’t teach Melissa to be a great connector of people, right? (18:22) That comes naturally.

(18:24) And so leaders need to be looking for that potential and then investing in that potential and not assume that if somebody doesn’t raise their hand, it means they’re not interested. (18:35) It may mean they’ve been conditioned to wait for you to notice.

Melissa

(18:42) And I think there’s so much in all of that, but I think the other thing that comes to mind is, you know, when the company doesn’t invest in the people, it’s up to the people to invest in themselves, right? (18:54) So I’ve, you know, same organization didn’t want to invest to me when I first started. (18:59) So I had to do all the investing in the beginning years on myself before, you know, to get myself up to speed, to get myself up to the knowledge of my peers.

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Cynthia

(20:14) Yeah. (20:14) So here’s how I think about it. (20:16) And here’s how it’s expressed in the book in, and I’m going to oversimplify it a little bit for in the spirit of time and, and for the person listening, if you think about a four quadrant model and you consider that you’re going to do an accounting of your human capital, what I advise is who are those individuals that have extremely high talent for role and high skill and knowledge, right there.

(20:43) The example would be toward the end of your time with your former company. (20:47) You understood gaming. (20:49) You, you have the skills to apply in the industry and you already brought the natural talent.

(20:54) So you’re in that upper right box, right? (20:56) You’re a pro you’ve got it. (20:58) And, and, and you can continue to learn.

(21:01) We want to invest in those people and continue to keep them engaged because high performers get bored easily. (21:08) And so they’re like, okay, I’m on rinse and repeat what’s next. (21:11) Right.

(21:12) So we have to pay real attention to those pros because they can, they don’t do well on autopilots. (21:19) The bottom right quadrant is, are those individuals that using your example, where you, when you started all the talent, all that natural talent that they needed, but needed to build up the skill and knowledge for that industry. (21:34) And, and whatever that means to the person listening in your environment, that it’s the individual, you know, it’s really easy to see.

(21:41) I actually use an example in the book. (21:42) It’s easy to see. (21:43) And things like baseball, just as a sports example, right.

(21:48) Baseball started to get it right when they were starting to recruit for raw talent because they could teach the rest of the game, right. (21:55) They could teach the strategy of the game. (21:58) So they were going all over the world, finding people that had their swing speed or their pitch speed, or their hand eye coordination.

(22:07) They were looking for these natural talent. (22:09) You can see it in sports. (22:11) You can see it in music, in business, it gets harder, but that natural talent upper right.

(22:17) This is where, this is where it’s this accounting of human capital is so important from a portfolio. (22:24) Those are people with high skill and knowledge, but maybe not the deep natural talent. (22:29) My question is always, who are they blocking?

(22:33) Because if Susie or John have great skill and knowledge, they know where all the bodies are buried, right? (22:41) A lot of institutional knowledge, but they don’t have a lot of that natural talent to take them to the next level, to perform at the highest level. (22:48) And they are leading people that do, those people don’t stick around.

(22:53) They look at that boss and go, Susie or John are going to be here forever. (22:59) They’re never moving up because of their natural talent for the role is maxed. (23:06) So I got to go someplace else.

(23:09) So that is a really important. (23:11) And then of course the lower left box is, is, is the obvious. (23:14) That’s the individuals that we need to have a compassionate bus stop or recast.

(23:18) Those are individuals that for that role. (23:21) And I want to be really clear here. (23:23) This is not about labeling people.

(23:26) Every single human being has talent. (23:30) Indiscriminately, every person has talent. (23:32) That’s the beautiful thing.

(23:32) It comes in all shapes, sizes, faith backgrounds, ethnicities, the whole thing. (23:38) So it’s not about not having talent or having talent. (23:41) It’s about talent for role.

(23:43) And those people that end up sadly in that bottom left box are in the wrong role. (23:49) They need to be either recast into a role that allows them to live into their big, beautiful talent, or they may need to go to another organization if you don’t have that spot for them. (24:02) And it sounds really, I don’t know, maybe hard when you think about it that way, because you’re talking about human beings, but let me flip that for a moment.

(24:10) I don’t want to be in a role that is not a good fit for my natural talent. (24:15) It’s not fun. (24:16) It’s work.

(24:17) It’s hard. (24:19) It’s, I’m not performing with excellence. (24:21) I’m not doing my best work.

(24:23) That’s, I don’t want to be there. (24:25) I want to be in a job that allows me to live into what I do best, what I’m wired to do, and then learn all the skills and knowledge to make me amazing. (24:36) So while it sounds like we’re, we’re, we’re treating people like, you know, numbers and commodities, it’s a win-win.

(24:43) It’s the most dignified thing you can do is to help somebody find their place in a role that they can live their best life and monetize their natural gifts. (24:53) And quite frankly, it’s the right business decision because at the end of the day, this isn’t volunteer work.

Melissa

(25:01) 100%. (25:01) And I think people get burnt out quicker, right? (25:04) If you don’t like doing something, you burn out quicker, you have less energy to do things.

(25:10) Your attitude isn’t there. (25:12) Therefore you probably have a lackluster, you know, you just push things across your desk. (25:18) So you’re spot on.

(25:19) I think back to several employees I’ve helped manage out of roles, you know, they were introverted people in sales roles, which is very uncomfortable for somebody. (25:32) It’s very stressful for them to be in those roles. (25:36) And so I would agree.

(25:37) I think putting people in the right place is in the best interest of the employee and the best interest of the employer. (25:44) I want to circle back on something we talked a little bit about at the beginning, a gut instinct. (25:51) I, you know, thinking about hiring from what’s on the paper to what your gut says.

(25:58) And so let’s talk a little bit about misconceptions that people have and hiring by just using the data to hire somebody.

Cynthia

(26:12) Yeah. (26:12) So this is going to be a little provocative for some people, but it’s based in data and evidence, right? (26:20) We are using, and it’s getting worse because with technology, with AI, with machine learning and all of those things, the cognitive load is being addressed elsewhere.

(26:32) And that’s only going to increase, but we are still using industrial revolution era filters to determine who gets selected, who gets promoted. (26:43) And they’re very weak predictors of future performance. (26:47) So let me unpack that.

(26:48) We still look at things like years of experience. (26:51) We back into people’s age. (26:53) They’re too mature for the role.

(26:55) They’re not old enough for the job. (26:57) They don’t have enough experience. (26:59) We look at, in some cases, their alma mater, what’s their pedigree.

(27:04) We look at these things. (27:05) And if you look at the Hunter and Hunter model, which has been revalidated since the nineties, all the way through three years ago, what it says is the predictive validity of understanding future performance is around a 0.2. Handwriting analysis is about a 0.2, right? (27:25) So we’re focusing on things that, in fact, age has an inverse correlation to predicting future performance.

(27:33) And you and I are probably both examples of that. (27:36) And I suspect that the person listening is an example of that, right? (27:40) Where we were at a point in our careers where we were leading and managing people senior to us in age, very likely, or had a title or job responsibilities larger than others at a particular age.

(27:54) Age is inverse correlation. (27:57) So, and then, and then we layer on gut, right? (28:00) Melissa’s likable.

(28:01) You’re charming. (28:02) You’re charismatic. (28:02) You’re a natural smiler.

(28:04) You’re a connector of people. (28:05) I like you. (28:07) Let’s hire you.

(28:08) Without thinking about what is the, the actual fit for this role. (28:13) And you mentioned a really good example earlier, salespeople that are introverts. (28:18) Now there probably are a lot of introverted salespeople that, that in the right role would do amazing.

(28:24) I don’t want to, I don’t want to cast a shadow on all introverts. (28:26) I consider myself a competent extrovert, which means I really am much more introverted. (28:32) But here’s the thing.

(28:33) If somebody came to me and said, Cynthia, we have this amazing job for you. (28:37) And what it looks like is, and it has this big money, you know, big salary and this big title and all the status and all these things. (28:45) But here’s the job.

(28:46) You have to be out in the community, meeting strangers every day and talking and going to all these events and networking and, and shaking hands and kissing babies and talking about this, this thing. (29:00) I’m sorry, not for me, not fun for me. (29:04) So we so often put people in the wrong fit because we’re using outdated criteria, number one.

(29:11) And then we’re using our gut, which is, oh, we went to the same school. (29:15) You have a likability or whatever the case might be, right? (29:17) We get, we fall in love with the resume or we fall in love with the person rather than looking at, do your natural talents align with what the talents of the role are?

(29:31) And can I teach you the skill and knowledge you lack? (29:34) It’s a very different way to go. (29:37) And there are predictive instruments out there.

(29:40) There’s a lot of vendors that have highly predictive instruments that look at natural talent. (29:46) So I’m not talking Myers-Briggs. (29:48) I’m not talking disc.

(29:48) Those are great for different purposes. (29:51) I’m talking behavioral, uh, science-based validated assessments that look at that hardwired natural talent and say, yes, this person is creative, strategic, conceptual, high attention to detail, what have you. (30:08) And if those are soft and the role requires you to be extremely high attention to detail, I don’t care how nice you are.

(30:15) Probably not a good fit.

Melissa

(30:17) I love that. (30:17) I’m thinking about back to what you were saying with age, my first really major leadership role, I had, you know, I wouldn’t say 50 direct reports, but up to 50 people that I had to answer and speak with. (30:30) And I was in my early twenties, very young for that role.

(30:34) And the people that were reporting to me could have been my great grandfather. (30:38) And so in that case, I was learning a ton from them, but yet they were also learning a ton for me because I was, you know, educated and they had real experience that I lacked. (30:54) And so that, that relationship was one of the hardest working relationship I ever had in my entire career, but I learned the most and they learned the most because we were able to see each other’s lens, but back to your kind of training, I had zero training for that.

(31:15) I, nobody trained me to manage people. (31:18) I was a doer that had to manage those difficult relationships. (31:22) A, I was too young, you know, B, I was too green and I had to learn quick how to, how to get with the program.

(31:31) So I want to talk a little bit about diversification because I think about that role. (31:37) It was such a competitive advantage for that company to, to, it was kind of by accident though. (31:43) Like I got the job.

(31:45) I was a competitive advantage for the company because I was young and hungry and I had a different lens than the people that had the experience, but lacked the education. (31:55) So I know you highlight diversification as a key advantage in human capital. (32:02) Talk to me a little bit about that and how do you measure the value of that in an organization’s bottom line?

Cynthia

(32:12) So I’ll give you the example that there’s an example in the book that that I think is a great case study. (32:19) I spoke with a gentleman who was leading Sony Entertainment. (32:24) He was in Asia for a bit.

(32:26) He was in the UK and then in the States. (32:30) And this was back when gaming was relatively new and the people that were predominantly programming, when I say gaming, by the way, we’re not talking about casino gaming here. (32:44) I’m talking about a games that the kids play on their Xbox and whatnot.

(32:51) Back then the programmers that were creating these games were predominantly young white or Asian men, right? (33:04) Just great. (33:05) No, that’s awesome.

(33:07) Except for, and, and let me say their, their referral program was such that if you refer as an employee, if you refer somebody to the organization, you, you’ve got a referral bonus, which is great. (33:21) Big fan of those in most cases. (33:23) Well, guess what happened?

(33:24) Who do young white and Asian men know and hang out with other white and Asian men for the most part. (33:30) And so that’s who they were referring, right? (33:32) So this referral program was perpetuating these types of individuals who were the program programmers.

(33:40) A very smart person started to look around and realize that, you know, there are no women programmers or, you know, at that point, none or very few. (33:49) And they made a conscious effort to diversify the programmers they were bringing in. (33:56) And they intentionally went after women, young women that were also in that space.

(34:03) And guess what came of that? (34:04) The dancing games, a lot of the family friendly games. (34:10) So not to take away anything from the car races and the, you know, and the, and the war games and all the things.

(34:18) But what happened is they expanded and diversified their consumer base dramatically because now suddenly they went from predominantly their games being of interest to young men and boys, but now they had games because these female programmers were thinking differently from their lens creatively and creating all of these other types of games that had a more generalizable audience. (34:46) There are studies after studies and the statistics are in the book about the bottom line impact of diversification. (34:52) That’s just one example of literally reaching out to 50% of the population that they were missing from a consumer perspective.

(35:01) There’s, there’s evidence about age diversity and the importance of that. (35:06) There’s evidence about certainly racial diversity, other kinds of demographics, right? (35:12) Just bringing different lived experiences, give us richer problem solving, richer creativity.

(35:19) And we know for a fact, more innovation comes from more diverse teams.

Melissa

(35:25) I love that. (35:26) That just gets me all excited because I, I don’t know if it was on purpose or just because I grew up in Las Vegas, but all of my personal circle of influence were different backgrounds, different ages. (35:44) A lot of my closest friends were substantially older than me.

(35:48) A lot of my best mentors were men that were in a completely different field. (35:53) And what that did for me in my early twenties and to today is level, really level me up in a way that I have a very diverse set of skills. (36:09) You know, I think of it like a Swiss army knife.

(36:11) I have had a lot of experiences through relationships with people. (36:16) So when I show up in the workforce, I show up understanding the intricacies between different cultures, different races, man and woman, and different political beliefs, different faith beliefs. (36:31) And I have this, I paint with a very broad brush.

(36:35) And so what that’s done and how that’s translated into the workforce for me is I’ve always hired people that didn’t fit the box and the qualifications. (36:48) But what I really was building was a team that fit a different puzzle pieces. (36:53) Let’s, you know, correlate to a puzzle.

(36:55) I was building a puzzle and putting different people in that puzzle that fit outside the mold. (37:04) So I’ve hired people in sales roles that were not sales people. (37:07) I’ve hired people that were much older than what people would want as a salesperson.

(37:14) And quite honestly, I don’t even identify as a salesperson yet. (37:18) Most of my career, I’ve been a salesperson. (37:21) And so I look at, you know, myself similar to those hires that were women.

(37:28) And I think about the value I brought to an organization that was trying to push revenue. (37:35) I didn’t, I didn’t push it the way most organizations would say, you need this many calls and this many things. (37:42) And really I focused on the customer first to understand, to ask great questions, to really lead from a place of empathy, heart, and compassion versus high pressure sales, car salesmen.

(37:56) And what that did for that organization is drive hundreds and hundreds of millions of dollars because I wasn’t driving it from a place of high pressure. (38:06) And so you’re so spot on hiring these diverse backgrounds. (38:11) I think individual talent is so powerful, but systems really win or lose the game.

(38:21) And so how can we, I guess the question is, how can we move organizations towards high potential ecosystems instead of just individually spotlighting stars? (38:36) Okay. (38:36) Johnny’s been here for 20 years.

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Cynthia

(39:15) Right, right. (39:16) I want to put a fine point in something you said and I’ll thread it into your question. (39:22) Your puzzle is the perfect metaphor.

(39:26) And, and I’m going to take it to the next level. (39:30) As you talk about putting puzzle pieces together, think about a puzzle, right? (39:35) An adult puzzle with the different shapes.

(39:38) They don’t give you, it’s not squares, right? (39:42) It’s puzzles aren’t made of squares that you can easily fit together. (39:45) They’re, they’re these odd shapes, odd sizes, and they sort of mesh together in these really unique ways.

(39:55) When we think about building a talent portfolio, we have to move away from the structure of job descriptions as they have previously existed for a couple of reasons. (40:14) Number one, we put arbitrary criteria in job descriptions and job advertisements. (40:22) And here’s what happens.

(40:24) This is the provocative part. (40:25) When we say you have to have 15 years of experience as a C-suite executive in healthcare with an MBA from this level of a school, right? (40:44) I’ll just stop there.

(40:45) We go from a large lake to a very small pool. (40:55) And that pool respectfully starts to look a lot more like middle-aged white men with all the love and respect to middle-aged white men, right? (41:08) Because once we take, once we put all this arbitrary criteria in place, we start to eliminate individuals that have an MBA from a different school or have a different type of certification program, or have only been in the job 10 years, not 15 years, but we’ve already said years of experience has a very soft, very weak, predictive validity of, of predicting future performance.

(41:37) So we’re putting, not only are they not predictive filters, but they are arbitrarily skinning down the individuals that we’re considering for promotion or selection into our organization. (41:51) When we start to look at a puzzle piece and we say, there’s lots of ways to get to what we’re looking for, but we’re going to lead with natural talent. (42:03) We’re going to lead with, I need somebody in the role that has these kinds of more non-teachables that are going to help them flourish and the minimum skill and knowledge requirement.

(42:16) So for example, I’m not going to have somebody perform surgery on me that doesn’t have a medical degree, right? (42:23) I’m also not going to hire an executive assistant likely that doesn’t know how to type. (42:29) There is a minimum requirement for every type of role.

(42:34) I might hire an executive assistant that’s never worked with Outlook or that isn’t a whiz bang at Excel, because I can go send them to a class on that. (42:44) If they can anticipate needs, you know, have a high relationship. (42:50) So what is the minimum skill and knowledge?

(42:54) Roll the dice on natural talent. (42:56) And then your job descriptions become more like an amoeba or a puzzle piece that you start to compliment. (43:03) So Cynthia mitigates Melissa’s softer areas.

(43:08) Melissa mitigates Cynthia’s softer areas. (43:11) And together we are a force, right? (43:14) We are a force multiplier because when you put those two pieces together, we’re not one plus one equals two, we’re one plus one equals five.

(43:23) That’s how you build a portfolio is it’s, it’s pulling all those things together. (43:27) And I would, you know, certainly say that if you want the step by step guide with literally the toolkit and the, and the tick boxes of all the things to do for every one of the six steps, you can pre-order a copy of human capital investment strategy. (43:43) Not only does it give you the background, the evidence and the science of the why and case studies, but it gives you literally the step-by-step how to.

Melissa

(43:52) I love it. (43:53) Definitely order the book. (43:55) I want my favorite, one of my favorite, favorite topics to talk around is of course, AI.

(44:01) I can’t finish talking to you without asking some questions about AI. (44:07) It’s literally reshaping the way every single one of us work today and the workforce. (44:15) And so I’m curious to get your perspective on it and, you know, what human traits do you believe are irreplaceable today?

(44:26) Because I hear a lot of people saying my job is going to be gone in two years. (44:31) I’ve often been told, you know, you work in strategy and sales, you’re not going to have a job in two years. (44:37) And so I hear a lot of this doom and gloom, but I really feel the exact opposite.

(44:42) I believe AI is going to, it gives me wings and it’s going to make me that much more dangerous in a role that I’m really good at already. (44:52) So talk to me about the traits you think are irreplaceable in the world of AI.

Cynthia

(44:58) Absolutely. (44:58) A lot of us are thinking about that. (45:00) That, I mean, it’s a huge, it’s the huge burning question.

(45:03) You know, I come from the same point of view and school of thought that you do. (45:06) I think the big myth buster is all of our jobs are not going to go away. (45:11) Now, are they, will some jobs not exist and look like they do today?

(45:18) Absolutely. (45:19) And I think that’s a good thing because what it calls upon is for us to lean into that, which is uniquely human. (45:26) And that’s a huge part of what I talk about as the uniquely human advantage.

(45:31) What’s not going to go away? (45:33) Empathy, compassion, problem solving at a different level, because there’s a level of conceptualization that says I have all these data points, but what are the nuances? (45:47) What are the complexities?

(45:48) What are, what are the, you know, people are complicated. (45:52) So, and we don’t behave always consistent with an algorithm. (45:57) And so what are the human elements that could derail the anticipated predictive thinking?

(46:06) It’s those kinds of things that elevate us to a different level. (46:11) Now, I also believe for a very long time, many of the trades, yes, some of that will be automated, but there’s going to be many trades that we’re going to still, we already have a depletion of individuals in the trade. (46:23) So many people went to college and pursued other things that we need to rebuild, right?

(46:29) The infrastructure around those really important, really, really important trades. (46:35) So I think we’re going to see individuals be able to step into some of that heart center. (46:42) And some of the things that in the past were considered back a million years ago when I was in training, soft skills, those are going to be the most relevant gifts and talents that we can bring to bear.

(46:56) Because I don’t care how good people profess that AI can be your best friend and your romantic partner and all those things. (47:03) It will not replace that which we bring from a human touch, human connectivity perspective.

Melissa

(47:12) It’s curious. (47:13) It’s funny that you say that. (47:14) I think about the trades.

(47:16) I heard this story, you know, my, my father’s works on the trades. (47:21) And so I heard the story recently about how the trades are using AI to solve problems for them. (47:29) So having junior workers in the trades, they might not have the knowledge of, you know, a pipe size or this, or how to fix that or how to solder this.

(47:40) So they’re using AI to help them solve problems versus having to go, you know, to their boss or their boss’s boss or somebody with the experience. (47:51) So they’re leveraging it in a way to solve problems versus disrupting other people’s jobs. (47:57) So I love hearing that and using it, empowering people to solve their own problems.

(48:02) Cause you know, I think back to, you know, when I was younger and helping people solve problems that were younger than me and how it disrupted my desk. (48:13) And sometimes I may have had to have my desk disrupted and disrupt another’s desk to solve that person, you know, two levels below me or a level below me. (48:23) And so I think about how we can try to solve our own problems a little bit and learn, then ask our, you know, an expert in whatever we’re trying to solve.

(48:36) So really using these tools, but you’re spot on with the emotional intelligence. (48:41) You can’t teach these tools, you know, how to have emotional intelligence and how to use it when, you know, you know, a person is crying in front of you, it may give you the AI tool may give you suggestions, how to respond to a person, but it’s really you as the person that has to give the, you know, empathy to another, it can’t be a tool. (49:04) So I love that.

(49:06) I want, we’ve covered a, like a mass amount of information and maybe in closing for listeners today who want to start or begin adopting human capital as an investment strategy, what’s the very first step you would suggest them to start today, tomorrow, next week ASAP?

Cynthia

(49:32) Yeah, I think the very first step is to really understand your, your strategic plan. (49:40) So in your business, and if you’re a leader that leads a team, you can do this with your team. (49:45) You don’t have to be the CEO of an, you know, a business.

(49:49) You can do this for your own team is to say, what is my, what is the strategic plan for my department, my company, my whatever, and however you do your planning, annual planning two years out, three years out, et cetera. (50:04) We typically start with some kind of business results. (50:10) We want to hire this many people.

(50:12) We want to make this amount of money. (50:13) We want to limit expenses, whatever it is. (50:15) We typically, our mind goes to the business milestones.

(50:20) And then I want you to, to flip that page or on the other side of your T chart, I want you to say what behavior, what human performance do I need to achieve those goals? (50:35) What does that look like? (50:37) And then the bottom part of that is what does business actually look like today?

(50:44) So what’s that Delta? (50:45) I want to go here, but where am I starting from? (50:47) But you do that on the people side as well.

(50:50) If B, if this is the kind of human behavior that I need, the kind of performance that I need out of people, where does that exist today? (50:59) And it’s in that gap analysis that you start to understand, okay, what are the things I need to invest in on the business side and on the human side to achieve those goals? (51:13) The problem is so often we only think about the left side of the sheet, right?

(51:17) We’re thinking about it purely from the business perspective without thinking about how do we mobilize people and invest in their human capital to get us there. (51:26) And then if you’re an individual, I would say, do that same thing. (51:30) What are your goals and where do you need to invest and grow your human capital to increase that appreciating asset and that value that you bring to the marketplace?

Melissa

(51:43) That’s fantastic. (51:44) Thank you so much for being here, sharing your knowledge and time with our listeners. (51:51) What is the best way to connect with you?

(51:54) Pre-order the book, all, give us all the details.

Cynthia

(51:57) Yeah. (51:57) So the easiest way to find me is my website, dr-cynthia, C Y N T H I A, dr-cynthia.com. (52:05) Um, you can pre-order the book there.

(52:08) If you pre-order the book before publication date, February 3rd, you’re going to receive $728 in free bonus content to hold you over until it hits your mailbox. (52:18) And there’s a lot of free resources on the website as well, including an organizational assessment. (52:24) You can find out how ready is your company, how future ready is your organization to really invest in your human capital portfolio.

(52:31) That’s going to give you a good sense of from where you’re starting. (52:34) Um, so start there. (52:36) You can reach me directly through that.

(52:37) You can pre-order the book there and then all my books are available on Amazon and wherever fine books are sold.

Melissa

(52:43) I love it. (52:45) Get the book, get in touch with dr. (52:48) Cynthia.

(52:49) That’s the executive connect podcast.