Value creation

All organisations must create sustainable value for all their various stakeholders over the short and long-term if they are to succeed. People play a fundamental role in enabling this to happen. The knowledge, skills and expertise of employees is a vital component of the competitive advantage of organisations today – without well trained, happy and healthy employees organisations are not able to be successful.

Measuring the human capital of the workforce, and using this people data to inform decisions - from the basic measurements of people management activities through to the impact of people on business strategy and performance – is a characteristic of high performing global businesses. Such organisations can demonstrate high performance in key areas that define business success including:

• Strategic execution
• Innovation
• Risk management
• Stakeholder focus
• Corporate responsibility and governance

To meet their objectives and create value businesses must measure and understand the context and environment in which they are operating. Delivering against strategic objectives, internalising external market data, and effectively managing business finances, are all ways by which businesses can secure their success.

 

Risk assessment

Understanding, measuring and managing risk and opportunity is also crucial, particularly human capital risks. Organisations that are managing this risk are able to understand the current and future challenges and opportunities that may in some cases radically alter the ability of the business model to deliver value for all stakeholders. Assessing the risks to current and future operations will help the leadership of the business to weather any issues, and meet the objectives set by the board or business owner, and the major stakeholders they are accountable to.

People data illustrated in the Valuing your Talent framework can be used to describe both the value that is created through people management, HR and finance activity, and the potential risks that organisations may face.

 

Resources description

To find out more about organisation performance, visit the CIPD factsheet:

Sustainable organisation performance

 

For more information about managing risk and creating value, visit the CIMA website:

CIMA Global

 

For detailed research on risk management and resilience see the Airmic research:

Roads to Resilience - Building dynamic approaches to risk to achieve future success