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EEA YouTube Show: Many CEOs Drive With Only One Eye on the Road

Chances are, if an organization is not tracking its Human Capital ROI and Human Capital Value add, it is missing opportunities for value creation. 
Dr. Solange Charas
During the 1980s, many US companies built high levels of quality defects into their business models, because this approach was viewed as more cost-effective than investing in minimizing defects. This worked until the Japanese and others employed a strategic total quality management strategy to maximize quality, which enabled Japanese manufacturers to not only enter the US market but establish a significant market share.
The same is true with people today. The point of this Enterprise Engagement Alliance YouTube Show is to share with management practical ways to look at human capital as a profit center, rather than as a sunk.
Stela Lupushor 
Dr. Solange Charas, Founder and CEO of HCMoneyball and Adjunct Professor on Human Capital Management, Columbia University, New York University, and University of Southern California, and co-author of Humanizing Human Capital: Invest in Your People for Optimal Business Results, with Stela Lupushor, Chief-Reframer, Reframe.Work Inc. and co-author of the book, provide a practical guide to human capital management and measurement.
Key points:
  • Human capital management is the last bastion of value creation; yet many if not most organizations continue to leave money on the table. It is similar to the situation with total quality management in the 1980s, when the Japanese proved that people were willing to pay for quality and reliability and forced US organizations to strategically and systematically address quality.
  • Organizations have traditionally treated human resources as sunk costs and people as units that can be easily replaced. The power shift has become so dramatic that some observers wonder whether companies might start laying off people and force a recession simply to reset the balance of power.
  • A more productive solution is to understand that people are indeed a form of capital and value creation that can make the difference between a good and a great company in terms not only of financial performance but in terms of market share and brand equity.
  • CEOs are not trained in a strategic and systematic approach to people management, but boards and CEOs are beginning to grasp the need for such knowledge.
  • Boards are starting to look at human capital more seriously. We are seeing more human resources management on boards, but the issue is: are human resources people qualified to bring a business focus to people management?
  • Organizations measure the potential return on investment of almost every business decision except human capital, when there are readily available measures to guide better decision making.
  • There’s a misconception if one believes that we will be able to return to the command-and-control model. We need different measurements and practices.
  • If CEOs and CFOs are not tracking the following metrics, they are driving with one eye on the road and almost undoubtedly leaving profits on the table in the same way they did in the 1980s in manufacturing when they built high levels of defects into product:
  • Human Capital ROI. For a calculator, see:
  • Human Capital Value Add. For the formula, see:,Total%20Costs%20%3D%20%24800%2C000%2C000
  • 5% improvement in human capital ROI can generate 30% to 40% lift of profitability if at least 50% of your expenses go to people. 
  • Companies should be trying to optimize the employee experience in the same way some are focusing on the employee experience.
Speaker Contacts
Dr. Solange Charas
Stela Lupushor

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Master the “S” of Environmental, Social, Governance (ESG), A.k.a. Stakeholder Capitalism
The Enterprise Engagement Alliance at is the world’s first and only organization that focuses on outreach, certification and training, and advisory services to help organizations achieve their goals by fostering the proactive involvement of all stakeholders. This includes customers, employees, distribution and supply chain partners, and communities, or anyone connected to an organization’s success.
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  • Founded in 2008, the Enterprise Engagement Alliance provides outreach, learning and certification in Enterprise Engagement, an implementation process for the “S” or Social of Stakeholder Capitalism and Human Capital Management and measurement of engagement across the organization.
  • The Enterprise Engagement Alliance provides a training and certification program for business leaders, practitioners, and solution providers, as well as executive briefings and human capital gap analyses for senior leaders.
  • The EEA produces an education program for CFOs for the CFO.University training program on Human Capital Management.
  • Join the EEA to become a leader in the implementation of the “S” of ESG and Stakeholder Capitalism. 
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The EEA Human Capital Management and ROI of Engagement YouTube channel features a growing library of 30- to 60-minute panel discussions with leading experts in all areas of engagement and total rewards.
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The Engagement Agency helps:
  • Organizations of all types develop strategic Stakeholder Capitalism and Enterprise Engagement processes and human capital management and reporting strategies; conduct human capital gap analyses; design and implement strategic human capital management and reporting plans that address DEI (Diversity, Equity, and Inclusion), and assist with managed outsourcing of engagement products and services.
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