By M. Bakri Musa

Chapter 7: Enhancing Human Capital

People are the real wealth of nations.
—UNDP Human Development Report 2001

One surprising observation following the American stock market meltdown of October 1987 was that there was very little change in the behavior of American consumers. The Dow Jones Index may have dropped by over 40 percent but stockbrokers and their clients did not jump off the skyscrapers on Wall Street. Citizens did not hoard food or withdraw their savings as they would when faced with major uncertainties. Nor did they withhold spending in anticipation of tough times. To be sure the sales of luxury cars and yachts were dampened, but by and large there were minimal changes in the economic behavior of Americans.

Citizens’ reactions in Malaysia to the much more severe economic crisis of 1997 were also similar to the Americans’. Both were in marked contrast in nearby Indonesia, where the nation was nearly ripped apart because of the economic crisis.

The reason for such a wide difference in reaction is that for a modern nation like America and Malaysia, wealth resides less in such tangible assets as stocks, real estate, or material goods but more with its human capital. Stocks may plummet and real estate slump, but engineers can still build, doctors heal, and architects design. These precious skills and assets are not lost or affected by fluctuations in the market.

Indeed the most important asset of a nation is its human capital; not its fancy infrastructures, gleaming skyscrapers, or national airline. This wealth consists of the present and future earnings as a result of education, training, knowledge, skills, and health of the citizens. Because of this dominance of human capital in the aggregate wealth of a nation, large changes in the value of the stock market, currency value, and other physical assets will not greatly influence the behavior of citizens.

The quality, and thus value, of the human capital can be assessed in many ways. Intuitively one can be easily persuaded that workers in Silicon Valley, California, are of higher quality than those of Papua New Guinea. The former, being well educated and highly skilled, produce premium goods and services. Consequently they are well paid and highly valued. Not so with the folks in PNG.

The most interesting aspect is that humans are either assets or they are by default, liabilities. They either contribute to or are a drain on the economy. There is no neutral zone. If they are productive, the country benefits in two ways. One, they contribute to the economy, and two, the state would not be expending resources on them. Non-producers not only do not contribute but the state has to expend resources on them.

Non-producers come in many forms: criminals, drug addicts, the sick and disabled, and the unskilled. Criminals are not only destructive to society as a consequent of their criminal activities but they also cost a bundle to prosecute and incarcerate. Drug addicts consume resources in terms of their medical care, and they do not give back anything to society. In Western societies with their generous social safety net, unemployed workers not only do not contribute to the country’s coffer, but the state has to pay them unemployment, welfare, and other benefits.

America has elaborate programs to train the mentally challenged through special education and sheltered workshops, all in an attempt to turn them into productive citizens. Visitors to America may consider such expenditures wasteful, but it is not. Even if these handicapped workers end up doing the simplest menial job, they are still contributing and more importantly, no longer a drain on the system. These individuals work in special environments outside the usual rules and demands of the normal workplace. They perform simple jobs like packaging toys and non-demanding assembly work. Even considering such programs from the humane point of view, it is still a worthwhile investment. One needs only look at the faces of these individuals in their sheltered workshops to appreciate how happy they are to be useful and productive.

Granted, the opportunity costs of such intensive training are high. In a country with limited resources, it would make more sense to spend them on educating the best and brightest. But when you do have the extra funds, as in America, the money used to train these “slow” workers is indeed well spent, a true investment.

I will illustrate the value of a well-trained workforce by relating three anecdotes.

When working in Malaysia, I used to complain about the poor quality of my clerical staff. Having worked in the West, the difference was glaring. I was lamenting this to my father one day but he was not impressed. “What is there to answering the phone?” he sniffed. “When it rings, pick it up and speak to the mouthpiece. What specialized training do you need? Really!”

Many Malaysians share exactly that attitude. Such low-level jobs, they believe, do not need any training. But there is much more to answering the phone than merely picking it up. Far too often my Malaysian secretary would simply respond, “Dr. Musa is not in the office.” End of conversation! Well, if she simply ignored the ring, then the caller would indeed know that I was not in. There is no need to pay someone to say the obvious. My secretary did not add any value in answering the phone that way.

In contrast, my efficient American secretary would answer it differently. In a clear voice she would first identify herself and the office: “Dr. Musa’s Morgan Hill office. Vicky speaking, may I help you?”

Short yet informative. If the caller had mistakenly dialed my office instead of the pizza place, he or she would know immediately. And if I were not in, she would not just simply state that fact but would add, “He is in surgery and not expected in until 3 PM. May I help you?” If the caller is simply enquiring about her bill, my secretary would be able to help accordingly. And if it is from a pesky salesman, she has protected me from wasting my valuable time in taking the call.

If the caller is someone important, such as a doctor wanting to refer a patient, she would add, “I can have him call you right away.” Then she would page me and I would call that referring doctor immediately. In that way I would not lose any potential referral. My secretary knows only too well that her job depends on whether I have patients. Hence she would treat every phone call as if it is coming from a potential customer. She cannot afford to simply dismiss it by saying, “The doctor is not in!”

Unfortunately the typical phone conversation in a Malaysian office goes something like this:

Caller: “Hello! Huh! Hello!”
Secretary: “Hello! Huh, who is this?”
Caller: “Huh, who is this? Is Aziz there?”
Secretary: “Aziz who?”
“Is this the right number?”
“What number do you want?”
“849 0338”
“Yes, you got that”
“Is Abdul Aziz, your purchasing officer, in?”

After a long nonproductive preamble, comes the answer, “Encik Aziz is not in!” Minutes were consumed and yet no useful information was communicated. As to Aziz’s whereabouts, you would not dare start on another game of 20 questions! Even to relate this typical phone conversation took valuable space from my page. Imagine the wasted time and unnecessary aggravation! And that is assuming you have the right number in the first place. If you do not, you have to start the whole darn process all over again.

Back to my father, he could hardly contain himself when I remarked that my wife taught just that sort of much-needed telephone skills in her business class. Companies send their employees to such classes to learn effective communication skills. The person answering the phone is not simply mechanically doing it, for if she is doing her job well, she will be providing a valuable service. She would give the first impression a customer would have of that establishment. She is an advertising agent, a salesperson, and an information resource officer for that office. That is why my secretary gets paid well while her Malaysian counterpart earns minimum wage. Further as my secretary in Malaysia was a civil service employee, she was not answerable to me. Thus she could afford to blithely ignore my suggestion that she improve her skills.

Robert Townsend, the former CEO of Avis Rent-A-Car, related in his book Up the Organization how whenever he was on a road trip he used to phone his headquarters and also the local franchise pretending to be a potential customer. That was the best way for him to get a pulse of his company and also to experience what a potential client would have to endure. Under his leadership, Avis lived up to its advertising jingle, “We Are Number Two! We Try Harder!”

Many companies now use voice mail. Phone calls are mechanically answered thus, “ABC Corporation…Your call is important to us…Press one for sales, two for repairs, ….” To me, voice mail is irritating and offensive. I do not use it and I stay away from businesses using such devices. If they think that my call is important, then they should put their money where their mouth is – have a real live person to take my calls.

Next: Adding Value to a Routine Airport Taxi Ride