Roger Martin is a professor at the Rotman School of Management at the University of Toronto, where he was Dean from 1998 to 2013. He’s been a strong advocate of the need to transform business education, in particular that students need to learn how to think holistically and creatively, to better prepare them to deal with the complex problems they will encounter throughout their careers. Professor Martin is also a prolific writer, having published a number of books and articles over the years.
About a year ago he co-authored a very interesting short article, Capital vs Talent: the Battle that’s Reshaping Business, with his Toronto colleague Mihnea Moldoveanu. Their basic thesis is that in our emerging digital economy, talent has become the key competitive asset for companies.
Until early in the 20th century, most companies were organized around their physical assets, such as land, minerals or oil. Later in the century, the key competitive assets shifted from natural resources to plants and equipment, sales and distribution, and finance. These capital assets enabled companies like IBM, GM and Eastman Kodak to achieve the necessary scale to compete across the country and around the world.
Then late in the 20th century the terms of competition changed again, with physical and capital assets no longer being the keys to success. “By 2000, many of the world’s top 15 firms by market capitalization began with little or no physical or financial assets - including Microsoft, Cisco, Intel, and Wal-Mart,” notes the article. “The vast majority depended on superior human assets for their advantage - great research scientists, inspired code writers, distribution geniuses, product innovators - and knowledge assets - patents, brands, know-how, experience. In short, in increasing numbers, leading companies were depending on talent.”