Maximize Returns on “People”, Not “Capital”

Undoubtedly the primary obsession of investors and the managers of the companies in which they have invested has been maximization of returns on invested capital and this has long driven the decisions of managers as they have developed their strategic plans and objectives.  There are, however, other ideas that are quite intriguing.  Bryan and Joyce, for example, have argued that managers should expand their traditional strategic focus on maximizing returns on capital to maximizing returns on “people” and that this requires recognition of the important role of organizational design in strategic planning and execution.  This report provides an introduction to some of the arguments made by Bryan and Joyce, as well as their suggestions for redesigning organizational structures and human resources policies to take into account the dynamic changes that have occurred in technology that now allow for collaboration and sharing of knowledge.

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