As a kid and coming from India, where every state speaks a different language I always used to wonder how everyone in the world could effectively communicate. At first I used to think that English is the most common language known to most of the people around the world and it is the best communication medium.
But as I grew older I started to realize that there is a lot of difference between how a native English speaker expresses their thoughts when compared to non-native English speakers. There was a huge communication gap. It is at this stage when I started to think how various businesses around the world could coordinate and still be so successful.
Without a language for communication it was impossible to be successful. There should be some standard medium of communication out there. What is it? I slowly but surely started to realize that the most understood medium of communication is numbers. Everyone around the world understands numbers and follows the same standards.
According to the Oxford dictionary one of the definitions of language is “a system of communication used by a particular country or community.” Going by this definition we can definitely say that numbers is also a language. Also as numbers are understood by almost everyone in the world, we can say that the most used language for communication in the world is not English, Chinese or Spanish but it is Numbers.
Everyone understands and follows the same set of standards for numbers. But the biggest challenge with the numbers is that everyone interprets numbers differently and the meaning of the numbers changes from one instance to other. This is when every sector of Industry and also various departments (i.e. Finance, Marketing, Procurement, Sales etc) started to create their own standards so that they can explain the numbers they generate. This is where another “hybrid language” developed which is a combination of numbers and other language such as English to explain everything effectively and more importantly without a communication gap.
To explain this further, take the example of Finance department. Everybody has a basic view of understanding of what a balance sheet, income statement and a cash flow statement are. They have been standardized (i.e. international financial reporting standards, generally accepted accounting principles), and used widely by everyone around the world (with minor changes). Every department uses this “hybrid language” very efficiently except for one department, Human Resources.
The Human Resource department was never able to develop set of standards. To explain this further, let us compare some standards of Finance and Human Resource departments. In the Finance/Accounting world the terms such as debt, credit, revenue, profit, EBITA etc., all have standard definitions and everyone interprets them the same. But when it comes to the Human Resource department, terminations transfers, promotions, hires, re-organizations, etc., every company may interpret them differently.
This is where we at Human Capital Management Institute come into the picture. We help to establish a framework and recognizable standards for insightful human capital measurement, interpretation and action. We are able to fill the void and give Human Resource a better chance to tell a story through HR metrics.
By,
Harish Reddy Sidda
