EDITOR’S COLUMN: THE ROLE OF HR IN A KNOWLEDGE ECONOMY

I recently read George Gilder's Knowledge and Power, a powerful and profound book. Gilder's bottom line:” Knowledge is power today. Knowledge is wealth today.”

The book uses the word “entropy” a lot. Gilder defines entropy as "a measure of surprise, disorder, randomness, noise, disequilibrium, and complexity.” Its economic fruits include creativity and profit. Its opposites are predictability, order, low complexity, determinism, equilibrium, etc. Gilder wants a low-entropy government that provides a foundation for high- entropy entrepreneurs to create, innovate, and grow the economy.

I see a dual role for HR in a knowledge economy. One role is to provide the low-entropy stability that supports a creative, innovative workforce by ensuring that a business hires the right people, stays in compliance, has the right insurance, etc. HR also has an opportunity to be creative and innovative in a high-entropy environment that works not just on the system, but in it. As Gilder states, “economic conditions can change overnight when power is dispersed and the surprises of human creativity are released.”

What knowledge – which is far more than just information – is your HR department providing to management? What have they discerned and communicated about company hiring approaches, productivity, retention, and motivation?

Gilder's insight reminds me of Orbiting the Giant Hairball by the late Gordon Mackenzie, creative director at Hallmark, a man widely known for his high-entropy approach. McKenzie describes an organization’s policies and procedures as the giant hairball, arguing that people need vision, mission, values, and goals to provide a low-entropy stabilizing foundation that allows them to orbit the handball, while unleashing their creativity.

This is another way of saying that a business needs both “administrative HR” (low entropy and stabilizing) and “strategic HR” (high entropy and creative).

To help you unleash the strategic potential of your business, I encourage you to read and absorb the lessons of Gilder’s book.

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