Valuing Human Capital

By now the incident involving the crash landing of USAirways flight 1549 is well documented. There is no doubt that Captain Chesley Sullenberger is a genuine American hero for his skills and even-tempered approach in landing his aircraft on the Hudson River and ensuring that all his passengers and crew were safely evacuated from the aircraft. Indeed, he has trained and prepared for this event his entire life.

What you made not of heard is that on Friday, the day following the crash landing, USAirways stock price was up 13%, on a day when the overall market was up less than 1%. Historically, airlines see significant drops in their stock value when they experience an incident as fears of lawsuits, reductions in passengers, and loss of goodwill impact the market’s perception of the company’s value.

I see the stock’s rise on Friday as the market’s valuation of the human capital at USAirways. Those of us in the learning and human capital development industry have long argued that a company’s greatest asset is its people, but that it is perhaps the most underestimated asset by traditional company valuation tools.

On Friday, the market was not just assessing the heroism of the captain, but the training, skills, competencies, and judgment of the captain and his crew. From this experience, the market was drawing a broader conclusion about the value of USAirways’ human capital.

In many organizations, the moment of truth for its human capital may not be life and death moments, but it does not dilute the value that is created when a company invests in developing its people. In this economic environment where the financial assets of most companies has evaporated before our eyes, human capital remains as an enduring, dynamic, and productive asset in which investments can be made. By choosing to train, develop, and engage the people in your organization, you are choosing to prepare your people to react, respond, and lead when your company most needs them, and in doing so, you are creating value for your shareholders in the process.