Human Capability and G3HC (G3 Human Capability)
What will you receive as a G3HC subscriber?
Building on more than 30 years of research, thought leadership, and experience — newly supplemented by AI-powered tools that can analyze your companies’ reporting and commentary about Human Capability in unprecedented depth — as a G3HC subscriber, you will receive the following: A customized report of Human Capability (Talent + Leadership + Organization + HR) strengths and opportunities for improvement of the HR function based on 2021 and 2022 SEC 10-K Human Capital disclosures with specific recommendations of Actionable Insights for improvement in each of the four Human Capability Pathways (Talent + Leadership + Organization + HR).
A baseline of your organization’s results in the four Pathways that comprise the Human Capability Framework in comparison to your industry, the average of more than 5,700 companies reporting to the SEC as well as the top 10 percent of those companies.
A confidential 60–90 minute debrief with a member of the G3HC senior leadership team to discuss the potential business case for Human Capability for your organization, how to apply our Human Capability framework and process, and Actionable Insights to improve Human Capability investments and disclosures.
Access to more than 100 videos, articles, white papers and other content that comprise the G3HC Actionable Insights for each Pathway of the Human Capability framework. This is a unique and proprietary compilation of research, thought leadership, and tested solutions that is available to every employee of your organization.
Access to a subscriber portal on the G3HC website with supplemental tools regarding each step of the G3HC Human Capability process: adopting the Human Capability framework; building a business case; prioritization; action planning; tracking; and stakeholder engagement.
Participation in webcasts with Dave Ulrich specifically for G3HC subscriber organizations.
Access to ongoing G3HC innovations in Human Capability measurement, data analysis and guidance on the impact of Human Capability pathways on specific stakeholder results.
How will your organization benefit?
Your benefits of the G3HC report, process, and supporting tools are numerous. The primary benefit is to increase your organization’s Human Capability overall and in four Pathways — Talent + Leadership + Organization + HR — so that you can create outcomes that matter to leaders, employees, CHROs, investors, boards, customers, and communities. Human Capability is responsible for up to 25 percent of an organization’s intangible value, which in turn represents approximately 80 percent of the market capitalization of all SEC reporting companies. The wealth creation impact of increasing your organization’s Human Capability to meet or exceed your industry benchmarks can be substantial.
Who is G3HC?
G3HC (G3 Human Capability) was founded by Dave Ulrich and Norm Smallwood, who collaborated with Amazon Web Services (AWS) to create this service by combining their 30 years of research and applied experience in Human Capability with AWS’s expertise in advanced technology.
Why is Human Capability important?
Human Capability is important because it correlates with improved business outcomes that matter to all your organization’s key stakeholders. This specific research shows that Human Capability impacts employee outcomes (45 percent of revenue per employee); financial outcomes (26 percent of earnings (EBITDA) and 25 percent of investor confidence (Tobin’s Q)); and corporate social responsibility outcomes (36 percent of fraud and 48 percent oflitigiousness).
Where did the Human Capability Framework come from?
The Human Capability Framework evolved from more than 30 years of research and experience of G3HC founders Dave Ulrich and Norm Smallwood. The research behind the four capability Pathways within the framework includes the Talent Accelerator, Organizational Guidance System, Top Companies for Leaders, and the Human Resources Competency Study. This research has engaged thousands of organizations and more than 100,000 individuals over a 30-year period and resulted in more than 30 books.
Is this assessment and report confidential?
Yes. Your G3HC report is not distributed or publicly available to anyone other than the organization that the report has been created for.
What information does my organization have to provide?
None. The G3HC assessment and reporting process uses public data your organization has filed in your SEC 10-K reports in 2021 and 2022.
What return can be expected on your G3HC investment?
Your investment in the G3HC subscription and supporting tools is $40,000 USD per year. Expected return on investment is estimated to be significantly greater than 4X based on access of the entire subscriber organization to each of the following:
1X – Human Capability Pathway benchmarking data value.
1X – HR professional development/education value (Talent and HR Pathway Action Insights).
1X – Leadership development/education value (Leadership Pathway Action Insights).
1X – Webcast and thought leadership sessions with Dave Ulrich.
Significantly greater upside may be realized by application of the Human Capability framework and six step process to deliver increased stakeholder confidence and intangible value.
Discounts are also available for multi-year subscriptions. More intensive support for data analysis, business case development, framework adoption, investment prioritization, action planning, and stakeholder engagement are available on a time and materials basis.
How can you quantify Human Capability impact on market value?
Human Capability is a significant component of an organization’s market value. On average, tangible assets explain only about 20 percent to 30 percent of the market capitalization of public companies. The remainder is intangible value, of which approximately 25 percent is related to Human Capability. We quantify the business case for Human Capability as 25 percent of the market capitalization increase that an organization could realize if it were to increase its P/E ratio to match their industry average or a peer that is leading their industry. The information you disclosed in your SEC filings can be quantified to show your public commitment to Human Capability.
How can you quantify Human Capability impact on market value?
Human Capability is a significant component of an organization’s market value. On average, tangible assets explain only about 20 percent to 30 percent of the market capitalization of public companies. The remainder is intangible value, of which approximately 25 percent is related to Human Capability. We quantify the business case for Human Capability as 25 percent of the market capitalization increase that an organization could realize if it were to increase its P/E ratio to match their industry average or a peer that is leading their industry. The information you disclosed in your SEC filings can be quantified to show your public commitment to Human Capability.
Who should participate?
We recommend several ways to engage your organization. Human Capability should be sponsored by the C-Suite (CEO, CFO, or CHRO). The debrief session has the most impact if participants include a cross-functional team from HR, Finance, Investor Relations, and Legal. Your HR leadership team should own and manage the improvement objectives, plans and programs within each Human Capability pathway. Your sponsor should determine who will participate in the debrief session after receiving and reviewing the report.
How much time will it take?
The report generation and debrief process can be delivered in as little as one week after an organization subscribes to the service. No interviews, surveys, or other tasks are required by your organization in the report generation stage of the process as your organization’s disclosure information is already in the public domain. The debrief session itself is typically 60 to 90 minutes. Action planning and implementation of improvement ideas would depend the specific findings and insights of your organization.
What is the SEC Human Capital reporting rule?
In November of 2020, the Securities and Exchange Commission began requiring publicly traded companies to disclose material human-capital metrics. The rule reads as follows “Item 101(c)(2)(ii): Provide “A description of the registrant’s Human Capital resources, including the number of persons employed by the registrant, and any Human Capital measures or objectives that the registrant focuses on in managing the business (such as, depending on the nature of the registrant’s business and workforce, measures or objectives that address the development, attraction, and retention of personnel).” Your company thus reported information about your “human capital” with little guidance in 2021 and 2022. Your disclosures will be the basis for this report.
If I have questions about subscribing to the G3HC service, with whom can I speak?
For more information about our service or to schedule a call with our team, please reach out to Joe Grochowski (jgrochowski@g3humancapability.com) or Mike Panowyk (mpanowyk@g3humancaapbility.com).
The Report
What is in the report?
The G3HC report is comprised of 7 sections: 1) an executive summary; 2) why Human capability matters and how to build a business case; 3) detailed explanation of the Human Capability framework and link to business outcomes; 4) your results and comparison to industry and SEC benchmarks; 5) Human Capability investment prioritization tools; 6) how to create a sustainable Human Capability process and engage stakeholders; and 7) more than 100 ActionableInsights (white papers, articles and videos) to help your organization strengthen each of the four Human Capability Pathways: Talent + Leadership + Organization + HR.
How are the scores calculated?
G3HC utilizes machine learning and natural language processing to extract and score relevant Human Capability text from your organizations SEC 10-K disclosures in calendar year 2021 and 2022. These scores are then tabulated in comparison to aggregate scores to your industry peers, the overall SEC result, and the top 10 percent of SEC results.
Why use SEC data?
SEC 10-K data is a public source of data. It is fact based and objective. It allows comparison across more than 7,000 companies to benchmark and improve. You chose what to disclose about your Human Capability initiatives that give investors, regulators, customers, and employees insights about your company.
How reliable is the data?
The G3HC data is twice as reliable as any previous study based on perception surveys. The correlation to business outcomes are: Employee Outcomes: 45 percent of revenue per employee; Financial Outcomes: 26 percent of earnings (EBITDA) and 25 percent of investor confidence (Tobin’s Q); and Corporate Social Responsibility Outcomes: 36 percent of fraud and 48 percent of litigiousness.
How often is the data set and results renewed?
The G3HC report data set is updated on an annual basis after your organization has filed a new SEC 10-K.
What will I be able to know and do differently after receiving this report?
The report includes robust information on the complete cycle of measurement, action planning, and communication of your efforts to build Human Capability. It includes an extensive library of Actionable Insights for each Pathway that can be incorporated into your annual plans based on your scores.
The Process
Who gets the report and who should participate in the debrief?
The CHRO or CFO is typically the sponsor and recipient of the G3HC report. It is entirely the choice of the CHRO or CFO to attend the initial debrief call alone or to invite an extended HR leadership team or C-Suite colleagues. We encourage a cross-functional team of HR, Finance, Investor Relations, and Legal leaders to attend the debrief.
What happens in the report debrief?
Within a week after subscribing, your report will be prepared for and sent to the sponsor. In advance of the debrief session, you will be sent your organization’s customized report and results. During the debrief, a representative of G3HC will provide an overview of the Human Capability framework; discuss your organizations results; frame the business case for building Human Capability from the perspective of key stakeholders; and discuss potential next steps for yourteam to put specific action plans in place.
What could/should happen after the debrief?
After the debrief session, your team will have new insights on Human Capability strengths and improvement opportunities. Next steps will depend on the current state approach your organization has regarding the measurement and improvement of Human Capability and the degree to which you have proactively engaged key stakeholders in understanding strengths and building confidence in the future. Our goal is to provide the process and tools so that Human Capability becomes a continuous strategic dialogue and process within your organization. Next steps would include any or all of the following: sponsorship; assigning accountability; investment and improvement planning; and communications.
If I have questions after the briefing, with whom can I speak?
The G3HC team member who leads your debrief session will continue to be your primary contact with our entire G3HC team. They will connect you to the best resource depending on the nature of your question. Our goal is to provide full support through the G3HC cycle of building the business case, adopting the framework, measurement, prioritization, action planning, and stakeholder engagement.