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Human Capital Management Leveraging Your
Workforce for a Competitive Advantage 1st Edition
Mark Salsbury Digital Instant Download
Author(s): Mark Salsbury
ISBN(s): 9781492721680, 1492721689
Edition: 1
File Details: PDF, 1.74 MB
Year: 2013
Language: english
Human Capital
Management
 Human Capital
Management
Leveraging Your Workforce for
a Competitive Advantage

Mark P. Salsbury
Copyright © 2013 Mark Salsbury
All rights reserved.

This is a production of
To my wife Patty with love, who has always believed in me, encouraged me to do what was unordinary and
uncomfortable, but adventurous and rewarding.
To my children Samantha and Michael, who along with your mom, have been and continue to be the
inspiration and joy in my life. Choose your own path and be true to yourself in all your pursuits.
Contents

Preface
Forward & Endorsements
Acknowledgements

Section 1: The Emergence of “Human Capital Management” as a Discipline

Introduction: The Human Capital Survey at Markem Corporation

Chapter 1: What is Human Capital Management?

Chapter 2: Human Capital as a Competitive Advantage

Chapter 3: Prerequisites to Human Capital Management

Section 2: Human Capital Management as a System

Chapter 4: The “Business Foundation” Comes First

Chapter 5: Mobilization of the Workforce Starts with the Mission and Vision

Chapter 6: Values: Guiding Organizational Conduct

Chapter 7: The Glue that Binds the Organization Together

Chapter 8: Transforming Business Strategy Into Human Capital Initiatives

Section 3: Powering Up the Human Capital Management System

Chapter 9: The “Performance Wheel:” Making the System Go

Chapter 10: Advantages and Disadvantages of Organizational Structure in

Human Capital Management

Chapter 11: Processes and Policies: Working in Tandem

Chapter 12: Talent Utilization: Right People @ Right Place

Chapter 13: Building an Organizational Development Framework

 Chapter 14: The 3R’s: Recognition, Rewards & Remuneration

Chapter 15: Internal Communications: Formalizing a Plan is a Must

Section 4: Putting It All Together

Chapter 16: Leadership – A Critical Ingredient for the Human Capital

Management System to Work Effectively

Chapter 17: Can HR Evolve to Human Capital Management?

Final Thoughts
A Personal Note
Footnotes
Preface

Like many of you, I’ve read a large number of business books over the years.
Some of them were quite helpful to me as I sought to learn and improve as a
manager. A great example is Jack Welsh’s book, “Jack: Straight From the Gut.” I
liked Jack’s book because he gave personal insights about his management style,
supported by inspiring ideas and stories about managing at GE. Other good business
books focus on collecting stories and lessons learned from well-managed and/or
financially successful companies. A great example is “Good to Great” by Jim
Collins.
The most common type of business literature I’ve come across over the course of
my career has been the theoretical approach, rich in research data, and in support of
the author’s model that he/she is attempting to pitch. In my opinion, where they
sometimes fall short is applying their theory or model practically.

You might be asking yourself what’s different about this book? What can I offer
that you haven’t already heard?

“Human Capital Management: Leveraging Your Workforce for a Competitive

Advantage” presents a practical business model I believe can be beneficial to small,
medium or large-scale organizations, both for profit or not-for-profit.
My model is based on the concept of “human capital management” as a
practice, and focuses on how to successfully implement organizational goals
heavily reliant on the collective efforts of the people in an organization.
I’ve developed this model through my own experiences and expertise as a global
business executive and HR leader. As such, the personal stories and anecdotes in the
pages that follow are primarily taken from my own corporate experience. These
experiences are based on both successes and failures. As you know, there’s much to
learn from success stories and failures. In fact, sometimes it’s easier to see wisdom
in failure than it is in success.
This book is practical, and from a business executive’s point of view. It provides
specific recommendations for any organization wishing to transform its human
capital into a competitive advantage. I’ve included real-life examples to support the
principles and key learning points.
This book isn’t intended to deliver a new theory on culture change or change
management, nor is it about how to motivate people. There are plenty of books,
articles, and seminars on these topics.

This book is about the practice of Human Capital Management, and the
assertion that most people-centered organizational initiatives need to be
comprehensive and systematic in order for them to take root and be leveraged
as a competitive advantage.
This view of Human Capital Management underscores the importance of
aligning and integrating certain key organizational elements to effectively drive
human capital within an organization. I refer to this approach as the Human
Capital Management System.

I wrote this book primarily for people who are in a position to directly and
significantly influence an organization through its human capital, that is, CEOs, HR
managers, and other leaders who are charged with the responsibility to make their
organizations successful. This book is also relevant for aspiring managers,
professionals, and students who can learn new organizational and management
techniques that will be helpful to them as they navigate their careers.

In Section 1 of this book I‘ve laid out a preliminary view of Human Capital
Management, which serves as the foundation for the chapters to follow. In this first
section, the definition of Human Capital Management will be reviewed, with a
description of the basic conditions and requirements necessary for organizations to
transition to Human Capital Management. Next, I’ll cover the increased significance
Human Capital Management can have as a competitive advantage in today’s
business world.
In Section 2, the first piece of the Human Capital Management System is
reviewed. I call this the “business foundation.” In this section, we’ll look at the parts
that make up the business foundation, and how they need to be aligned for maximum
benefit to occur. Companies that effectively align the business foundation are well
positioned to drive human capital.

Section 3 addresses the Human Capital Management Wheel or what I like to call
the “performance wheel.” This section provides an overview of the performance
wheel itself and the identification of key organizational components or spokes
within the performance wheel. Each of these spokes will be covered individually in
separate chapters to elaborate on them appropriately.

Section 4 delves into the leadership characteristics required for Human Capital
Management to be successful. This section emphasizes the CEO and Human
Resource roles in the implementation of Human Capital Management. While it’s
important for other senior members of management to be capable and committed to
this transformation, with the exception of the CEO’s role, I believe none is more
crucial to the success of Human Capital Management than the role of HR.
 This book is intended to offer a practical roadmap to mobilize the human capital
talent in your team, organization or company. Whether you’re an executive looking
to navigate an organizational culture change or an aspiring leader looking to learn
new skills in Human Capital Management, it’s my sincerest wish that this book is of
value to you.
Forward & Endorsements

Opening Remarks by James Salsbury, Business Consultant specializing in

Operations Management and full-time faculty member of Bentley University’s
McCallum School of Business, former CEO of Whidden Memorial Hospital in
Everett, Massachusetts and Deaconess Waltham Hospital in Waltham,
Massachusetts:

“Throughout my career as a business executive and educator, I’ve met scores of

consultants and read hundreds of business books and articles, including this book,
Human Capital Management: Leveraging Your Workforce for a Competitive
Advantage. That’s why, when my brother Mark asked me to preview his book, I was
curious to see if he had something to offer that was different. After all, so many of
the business books I’ve read are steeped in theory, weak on practice or full of
interesting stories, but lacking in direction.
Upon reading it, I’m happy to report that this book is a valuable tool in providing
a practical and useful roadmap for business leaders and human resource executives
to follow in achieving their strategic objectives through the most difficult advantage
for competitors to duplicate, the organization’s workforce.
As pleased as I am to endorse this book, I’m even more enthusiastic about Mark’s
capability to guide organizations through Human Capital Management
implementation. His senior level management capabilities in blending
vision/strategy with operational execution are a hallmark of his career.
But don’t just take my word that this book is a valuable management tool for
people-centered organizations.
Here’s what others have to say:”

“A must read for CEOs, Sr. Management teams, and HR Practitioners. Mark
brings to life the synchronization of Strategy, Structure, and Execution in a
pragmatic and insightful manner. ‘Human Capital Management: Leveraging Your
Workforce for a Competitive Advantage’ combines the insight and experiences of a
global executive with a systematic approach to transformational change strategies
designed to embed executable human resource tactics into an organization’s
performance. I would highly recommend this book to global organizations as a
competitive advantage in aligning their organization for results!”

Keith Chrzanowski
Senior Vice President, Human Resources
Given Imaging Ltd.
Duluth, Georgia

“With his book, Mark brings his years of valuable experience in people
management into defining a practical system that many companies can easily
implement. A system that will enable them to obtain the best performance and
achieve their strategic objectives, from their most important asset: their people.
It was exciting to read how Mark very effectively captured, through real
operational examples, the evolution of the system he defines. This includes some of
the ideas we shared as colleagues early in our careers, ideas that won’t be alien to
most senior managers, as well as those with less experience. I found his book
captivating and easy to read, and will share this book with my staff and the rest of
my organization.”

Armagan Akar
President & CEO
Teseda
Portland, Oregon

“Unlike many other academic books that preach theory, in ‘Human Capital
Management,’ Mark Salsbury gives CEOs and HR leaders practical solutions on how
to utilize an organization's most important asset: its people. This book is easy to
follow and understand with great real-world examples to support the principles and
concepts offered. Mark's writing reflects his own leadership and management style,
combining strategic thinking and operational execution that's crucial for executive
success in today's global business environment. One or the other is not enough, you
need to have both.
I would highly recommend this book to business leaders in any industry, public or
private sector, and particularly to those in the HR community. Whether you're a
seasoned HR leader or upcoming professional, by following the steps outlined in this
book, you'll have a roadmap to chart a course for your organization, from a proven
contemporary.”

R. Campbell Fitch
Global Human Resources Director
Ipsos
Paris, France

“Mark and I got to know one another as business colleagues during the merger of
two very different companies, Markem and Imaje. In virtually every encounter
where we collaborated on a subject together, he offered a valued and unique
contribution and consistently found workable solutions to what were often
challenging situations. He has good vision regarding organizational strategies and a
clear understanding of how to build comprehensive and aligned programs to support
the company's business strategy. He is clearly an authority on human capital
management and the role that people can play in making organizations successful.”

Serge Kral
President
Markem-Imaje
Geneva, Switzerland

“Mark and I became acquainted when we worked as colleagues on The Conference

Board’s mid-market HR executive council. Mark has a strong understanding of
business with a keen understanding of human capital and its role and value to an
organization. His book strikes the right balance between insight and practicality. It’s
a great read for any business leader looking to align their business with a strong
performance or a serious HR professional looking to have a smarter and greater
impact on the organizations they’re a part of.”

Stacy Reyan
Executive Director, Human Resources
APCO Worldwide
Washington, DC

“I met Mark for the first time in 2006 when I was the VP of Sales at Markem-
Imaje. It became immediately obvious to me that he’s a seasoned business leader
with thorough knowledge in a broad range of business topics. At that time, Dover
had acquired Markem and the decision had been made to integrate both Markem and
Imaje into one single new company, with the objective to become the differentiated
market leader in our business space.
As with most mergers, people and management quality were among the most
critical factors of success. Mark introduced the senior management team very
quickly to Human Capital Management and guided us through the entire process of
implementation. He knew well which subjects needed to be addressed without delay
and which ones needed to progress at a slower rate to ensure maximum success,
keeping in mind the key business priorities and constraints.
The implementation of Human Capital Management made a huge difference in the
success of the integration process and in our ability to create the new Markem-
Imaje. Mark was highly instrumental to this success as he coached and navigated the
executive leadership team skillfully through the implementation of HCM.
In this book, Mark skillfully lays out the path for Human Capital Management
just as he led us through the process at Markem-Imaje. I recommend this book to
any CEO or senior leader as a fantastic educational tool to help better understand the
benefits of Human Capital Management, and how it can lead to maximum success of
an organization.”

Christian Lefort
Deputy CEO
Dirickx Groupe
Congrier, France
Acknowledgements

Besides my parents, there are three people who have opened up major paths of
opportunity in my life.

The first is my cousin Bill Salsbury, who is no longer with us. Bill’s contributions
to society, and in particular, to our hometown of Utica, New York were countless. In
2007, he was inducted into the Greater Utica Sports Hall of Fame for his impact and
support to Utica’s youth community. Check out the Hall of Fame website at
www.greateruticasports.com to learn more about his accomplishments. When I
was a young boy growing up, Bill was responsible for making many opportunities
available that gave me a chance to succeed in school, sports, and life.

Richie Joseph was my college baseball coach, and gave me the opportunity to
receive a good college education. Now retired, he was a tremendous role model, with
a disciplined approach to his work and athletics, and also a friend who cared about
the well-being of his players. I was just one of many student-athletes that benefited
from his guidance and friendship.

Ken Rohner, also now retired, became my mentor and friend as I advanced my
career with Schlumberger Limited. He had the ability to make all those reporting to
him feel special, like they were his favorite, without ever telling them so. He was a
wise businessman, a true HR professional, and I learned much from him. Ken took
me under his wing when I was a young manager, and his willingness to put me in
“stretch” positions that I could grow into was largely instrumental in my
development into a senior business leader.

I will always be grateful to these three men for their positive influence and
contributions to my life.

Many thanks to the individuals who were kind enough to provide advice,
constructive comments, and/or encouragement regarding the content and/or
publishing of this book; namely, Emily Abrams; Bob King and Susan Griebel of
Goal/QPC, Dr. Mark Davis, Joe Colletti and Omar Kerbage; also much appreciation
to Benjamin Allison of the law firm of Sutin, Thayer & Browne for his legal review.

Thanks to all the business leaders and colleagues who I’ve worked with over the
years, and who’ve helped shape my perspective. While I’ve lost touch with many
former coworkers and contemporaries as time has gone by, I have fond memories of
the relationships we formed.

I’d also like to thank those who were kind enough to write their endorsements
regarding my book and/or my experience as a business leader. They include
Campbell Fitch, Armagan Akar, Keith Chrzanowski, Stacy Reyan, Serge Kral, and
Christian Lefort. I respect and am honored to be associated with each one of them.

Many thanks to Gary Kunath, business entrepreneur, public speaker, and author,
for his wise counsel and countless business discussions that have complemented our
personal friendship all these years.

A special thanks to my niece, Sondra Zabroske for designing the book cover. Her
flair for art and design accentuates her skills as a professional architect.

To my brother, Jim Salsbury, business consultant and well regarded faculty

member at Bentley College, a special thanks for all the advice, contacts, stories,
editing, and conversations (intellectual and otherwise), that have led up to the
publishing of this book, as well as providing the kind words in the Forward. I’m
blessed to have a brother that I’ve always regarded as one of my heroes.
I can’t thank my editor and publishing advisor enough for her attention to detail,
always encouraging and simultaneously pushing me to constantly improve my work.
She’s a gifted writer, editor, and literary talent, whose energy and enthusiasm is
infectious and brings joy to those around her. She also happens to be my loving
daughter, Samantha M. Salsbury, and I wouldn’t have been able to complete this
project without her.
Success comes from recognizing and acting
on opportunities that pass by,
whether obvious or obscure.
So keep your eyes wide open.
Section 1
The Emergence of “Human Capital Management” as a
Discipline
Introduction:
The Human Capital Survey at Markem Corporation

My mid-life crisis was in 2000, the millennium. At the time, I was in charge of
HR for Schlumberger Limited’s high technology group, Test & Transactions,
approaching $2B in revenue, with 22 factories, 10 product centers, and 9,000
employees worldwide.
After travelling for business about 80% of the time for three consecutive years, I
needed a change, and my life back. I loved my job and working at Schlumberger, but
I missed being around my family every day. However, in the culture of
Schlumberger, there was no viable solution that would allow me to continue in the
company and be with my family more often. Late that fall, I accepted an offer to join
Markem Corporation as VP of HR in January 2001. Markem Corporation was a
privately held company in Keene, New Hampshire, two hours from Boston, with
$400M in sales consisting of two separate operating companies and employees in
more than 20 countries. The company had a record of solid growth and profitability,
a strong management team with excellent credentials, and an employee-friendly
atmosphere.
After 15 years with Schlumberger, I relished the opportunity to bring my
knowledge and experience to Markem. In fact, during the first several months of
2001, the experiences there were like a breath of fresh air because the company
wasn’t burdened by the disadvantages of being publicly owned or having too much
administration.
And then, like the rest of the USA, we were faced with the unfortunate events of
9/11 and its aftermath. As you probably recall, the recession came early and abruptly
in 2002. All of a sudden Markem’s operating costs were out of balance with its sales.
Faced with an ominous outlook for the remainder of the year, we reluctantly
proceeded with a layoff of about 30 people (~3% of the company’s workforce) in the
second quarter of 2002. By most mid-size or large company standards, a reduction of
30 people isn’t a big number, but in its 90-year history Markem only had two prior
reductions. In each of these cases, the company offered something called a VSP, a
“voluntary separation program” where people volunteered to leave and received one
month per year of service without a cap. Not bad right? In reality, because of the
attraction of the VSP, very few people were actually laid off. They volunteered to
leave once the VSP was offered.
But in 2002, there was to be no VSP program. Times were changing, and frankly,
we didn’t want to spend the money to incentivize people to leave. As you would
expect, this decision went down like a lead balloon. To make things worse, a day
after the layoff we learned that there were union organizers outside the entrance to
the company parking lots, handing out leaflets. The day after, an anonymous letter
was sent to the home addresses of about 100 employees suggesting a few of the
company’s vice presidents should have been let go. They named the newly hired VP
of Sales and me as good candidates. Being the new kids on the block and still in the
assimilation process with the company made us easy targets. Suddenly, I wasn’t
feeling so great about the new job.
A week later, we had another setback when one of the major national newspapers
wrote a derogatory article about Markem Corporation and a number of other
companies for transitioning our “defined benefit” pension plan to a “cash balance
plan.” The article was critical of cash balance plans, and accused companies using
such plans of improperly reducing retirement benefits to employees and retirees.
Markem had in fact changed its retirement plan about a year earlier, but it had done
so lawfully and in a professional manner. Despite this fact, our employees were
naturally upset and confused by this accusation of the company changing its pension
plan illegally, and the damage had been done. We were faced with the perfect storm,
and many people in our workforce quickly went from being loyal and appreciative to
dissatisfied and angry.
Over the course of the days following the article, management took a number of
steps to stop the bleeding of morale and motivation among our employees. We held
employee communications meetings explaining the pension plan changes going over
both points of view. We conducted management training for union organizing, and
reminded our employees we were open to any ideas they might have to make
Markem a better place to work.
Within a few weeks, the hostile climate began to abate, and our actions seemed to
have put out the fire. But for me, the situation continued to be disturbing. Not having
previously worked for a paternalistic, privately held company, it was difficult for me
to conceptualize how a loyal workforce could become disenchanted so easily and so
fast.
While I thought about this one day shortly after this series of events, another
senior member of the management team came into my office with a suggestion,
“Maybe we should do a job satisfaction survey,” he offered. I was hoping the
expression on my face didn’t show my disagreement with his idea. Pausing to
reflect, I asked him to let me think about it a bit, and we agreed to talk about the
subject later that week. Even though I didn’t think the timing was right to do a
survey, to be fair, I wanted to consider it as objectively as possible, instead of
reacting too quickly, and rejecting it.
Later that evening, when most of the employees had left for the day, I did some
research, and surprisingly came across an employee survey company that provided
something called a “human capital survey.” A human capital survey doesn’t ask
employees whether they think their pay is right or whether they’re happy in their
jobs. Instead, this kind of survey asks questions that help determine whether
employees are engaged in their work, whether the communication between
employees and their supervisors is effective, and whether employees truly
understand the organizational goals of the company. I thought more about it, and
decided that the human capital survey wasn’t such a bad idea after all. Starting that
day, I began to think about, learn, and appreciate the concept of “human capital
management” as a practice.
Chapter 1
What is “Human Capital Management?”

The term human capital management starts with “human capital” which is
consistently defined and “commonly referred to as the knowledge, skills and abilities
(KSA’s) staff possesses that enables them to function effectively within the scope of
their jobs.”1
However, there’s a wide range of definitions for “human capital management,”
most of them broadly stated and having to do with the mobilization of people in an
organization. Interestingly, there’s no globally accepted definition of the term,
though there are a number of articles and books that cover the subject in one way or
another.
The field of Human Capital Management is still in its developmental phase. It’s
no wonder then, that there isn’t any universal definition or description of it. In my
research, I’ve also found it surprising that very few people and organizations have
exploited the concept of Human Capital Management as the next logical step in the
evolution of Human Resources.

While the HR profession has been slow to discover Human Capital Management,
there are some companies providing integrated software applications to help
companies manage their HR systems, and they have latched onto the acronym
“HCM.” One example is Oracle, who calls its integrated suite of HR related data and
information management system “Oracle Fusion Human Capital Management.”
Others have done the same, and in the world of Enterprise Management, “HCM” is
becoming a standard acronym.
These software tools are useful and supportive in helping executives do trending,
monitoring, tracking and managing data and information to make better decisions
for their organization. But in my opinion, this isn’t Human Capital Management, it’s
Human Capital Data Management. These software packages are only tools, albeit
useful tools to manage data and information, not people.

Derek Stockley, a well-respected Australian consultant specializing in training,

human resources, and performance management consulting says this about human
capital management:
“The term human capital is recognition that people in organisations and
businesses are an important and essential asset who contribute to development and
growth, in a similar way as physical assets such as machines and money. The
collective attitudes, skills and abilities of people contribute to organisational
performance and productivity. Any expenditure in training, development, health and
support is an investment, not just an expense.” 2
 With that said, Human Capital Management is different than Human Resource
Management, and for the purpose of establishing a clear view of the difference
between the two, it’s necessary to compare them. In its Glossary of HR Terms, the
Society for Human Resource Management (SHRM) defines Human Resource
Management as follows:
“The formal structure within an organization responsible for all the decisions,
strategies, factors, principles, operations, practices, functions, activities and
methods related to the management of people.” 3
Another definition is provided by Edward L. Gubman, who wrote in the Journal of
Business Strategy, “the basic mission of human resources will always be to acquire,
develop, and retain talent; align the workforce with the business; and be an
excellent contributor to the business. Those three challenges will never change.” 4
While Gubman’s description is straightforward and aptly describes the overall
mission of HR, in my opinion it’s not ambitious enough in capturing the notion that
human capital, through its collective skills, knowledge and abilities, is the most
important asset an organization has.
The Charter Institute for Personnel and Development in London is the best write-
up I’ve seen distinguishing the two:
“Human capital management is comprehensive because it includes not only
human resource (HR) practices, but also other work practices and people
management strategies that increase organizational performance. The important
distinction between human resource management and human capital management is
that human capital extends well beyond the HR function to encompass the total
people strategy of the organization. Human capital is owned by all of the business
leaders and resides with everyone in the organization.” 5
What I like most about this perspective is that it distinguishes Human Capital
Management as an organizational entity, not a functional entity. Additionally, it
encompasses the various people practices that make up the whole of the
organization, and in doing so, makes the case that Human Capital Management
should be viewed as a distinct and separate discipline.
Therefore, Human Capital Management should be viewed as a tangible practice
within an organization, and this is the reason why the phrase is capitalized
throughout this book.

For the purpose of providing a foundation for Human Capital Management as an

emerging practice, I have offered my own definition and description:

“Human Capital Management is an organizational practice by which the

human capital assets of an organization are collectively leveraged to gain a
competitive advantage. This view of Human Capital Management highlights the
importance of taking a systematic approach to integrate and align important
organizational elements to effectively drive human capital initiatives. This
approach is what I call the Human Capital Management System.”

Human Capital Management has a number of unique attributes:

1) Human Capital Management is centered on programs and services based

on key organizational initiatives, rather than individual or small sets of
activities designed to improve efficiency and effectiveness of daily
operations. In other words, Human Capital Management is broader than
Human Resources, larger in scope, and beyond the sole domain of HR or
any other function of the organization. For example, staffing for engineering
positions is a Human Resource activity while a workforce planning capability
that results in a forecasting model and multi-year hiring plan is a Human
Capital Management activity.

2) Human Capital Management is concentrated on the interrelationships of key

organizational elements, and how they work together. For example, in
developing a Six Sigma program, a company’s Human Capital Management
perspective would include efforts to put in place supporting links to the Six
Sigma program that would be well beyond the actual implementation of Six
Sigma processes and tools themselves. There would be a need for cultural
adaptations to be built into the organization, and perhaps compensation
programs would need to be modified. Job structures and competencies might
need to be updated as well. For Six Sigma to be properly applied, multiple
organizational components need to be integrated so they can support one
another within a system. Human Capital Management takes a systems-based
approach that links important elements of the organization, regardless of
functional ownership.

3) Continuous measurement of return on investment (ROI) and other key

metrics should be a part of Human Capital Management. Certainly it’s useful
to measure activities and outcomes to evaluate progress against results, but
Human Capital Management relates to higher-level business goals, not
tactical metrics. For example, a good Human Capital Management metric for
ROI might be a comparison of Revenue/Labor costs or Operating
Earnings/Labor costs. At the functional level, the same type of higher-level ROI
can be applied, for instance, by measuring the output of an engineering
organization using an example such as the number of new products brought to
market within three years. Of course, the challenge with high level ROI
measurements is that it’s often difficult to directly correlate actions to results
since there can be multiple factors that influence results. What’s important to
take away from this is that measurements need to be put in place before the
human capital initiative is started, and then progress needs to be gauged going
forward for continuous improvement.

4) In Human Capital Management companies, consistent day-to-day

performance is a basic requirement for a business to be successful, but
operational excellence is not the added value of Human Capital
Management. The real contribution comes from the organization’s ability
to deliver company-wide and strategic performance. This will push the
company to its desired state more quickly and to a greater extent. This
added value contribution of Human Capital Management can come in the form
of culture or change management, performance management systems or other
large-scale cross-functional efforts that will impact the company’s performance
significantly. A good example might be how to improve a performance culture
within a company that needs to compete more effectively in its competitive
space.

5) Last, but not least, Human Capital Management is more about increasing
revenue than it is about reducing costs. In Human Capital Management, the
emphasis is on projects related to revenue growth, as they’re often more
meaningful to a company’s long-term success than cost cutting. An example of
this principle took place in a company that I’ve become familiar with in the
past several years. During 2009, the company’s management conceived of a
new customer sales and service model designed to improve sales channel
management globally. The cross-functional team working on the project
rewrote organizational roles and responsibilities, and outlined key selling
processes. The roles and overall customer relationships between the company’s
customers and the internal Marketing and Customer Service organizations were
impacted as well. In total, the initiative resulted in a refocused customer
approach organizationally restructured to better align with the company’s
industry and customer target base. This Human Capital Management endeavor
enabled the company to engage more effectively with its customers and
understand their needs better, thereby leading to improved retention of sales,
and a much better plan for addressing new customer sales activities.
Chapter 2
Human Capital as a Competitive Advantage

Over the last decade, the growing importance of human capital has become
obvious. It seems that each year The Conference Board’s “CEO Challenge: Top 10
Challenges” survey includes human capital subjects such as “talent gaps” or
“succession planning” in the list. The reasons for human capital’s rise in importance
are varied, and while it’s not my intent to capture them all, it’s worth noting a few:

• As government rules and regulations have become more complex, the need
for specialization has increased. We depend greatly on individuals that we hire
to perform specialized jobs, and we spend valuable resources to train and
develop them. Therefore, the importance of hiring and retaining people with
these specialized skills is much greater today than it was in the past.

• As the global economy makes it easier to do business internationally and at

the click of a computer, competition can come from anywhere at anytime, and
it’s more difficult to protect niche markets. This in turn, places greater
emphasis on the human capital of an organization to find new and innovative
ways to retain customers and gain new ones.

• As technology has advanced, IT structures and systems that enable tools and
processes to drive business have actually made it easier for companies to keep
pace with their competitors. In the past, companies could maintain an
advantage for a longer period of time based on their ability to develop
proprietary tools and processes in sales and marketing, supply chain
management or research and development. In many cases, these tools were well
kept secrets and internally maintained, making it difficult for competitors to
replicate. Today, it’s a different story. If you want to become a “lean” company
for example, there are a number of consultants who can help you install a
continuous improvement system. Virtually every Enterprise Resource Planning
(ERP) system offers embedded tools and processes to link business
functionalities or you can find a compatible application service provider (ASP)
for those functional requirements that are necessary to integrate.

What is the significance of these points?

Simply stated, while extraordinary products and unique services still afford a
competitive advantage (for a limited period of time), the one advantage that
stands the test of time… is people.
 Consider these points:

• As the baby boomer generation exits the working world (even if it has been
slowed due to a lengthy economic recession in the past decade), demographics
experts predict there will not be enough qualified managers to fill the positions
that will be available. Therefore, available talent will be a critical factor in an
organization’s success.

• Few companies are clever and talented enough to maintain a competitive

advantage by having breakthrough products and services. As such, it has
become increasingly more difficult to differentiate oneself from the
competition over a prolonged period of time, and specialized and/or quality
talent will be harder to come by.

• As foreign companies operate successfully in our domestic markets, and

local companies go overseas to expand, it’s becoming more difficult to sustain
long-term double-digit growth in geographic markets.

• As companies reduce time to market or decrease product costs by using

tools and processes that are becoming more commonly used by multiple
competitors, these too will become limited as competitive advantages.

Organizations that thrive and survive will have a common advantage others will
not have: the right people. Even understanding that there will always be those
companies who have the best level of innovation and ability to make a better
product, it’s because they have the right people that they can do this in the first
place.
Given the surplus of literature on a wide-range of topics associated with people as
a competitive advantage, it should be no surprise that human capital is the center-
point of most, if not all, organizational business strategies. Yet, despite this
awareness, few organizations have taken strategic, comprehensive, and significant
actions to make human capital their most important priority.

Why are so few companies proactively seeking to leverage their human capital?

In my view, there are three primary reasons:

While difficult to believe, many companies haven’t recognized that human capital
isn’t a commodity. These companies haven’t made human capital an important part
of their business plans, nor do they utilize human capital as a competitive weapon or
tool.
Second, there is sometimes a disconnect between the understanding that many
CEOs and senior managers have in what they want to accomplish with human
capital, and what is required in the form of a systematic and synergistic
commitment, and investment to achieve their strategies and goals.
And third, many companies are still unprepared from a management resource
standpoint to tackle the human capital challenges they have. They don’t have
internal talent that is either capable or trained to drive Human Capital Management
programs.

Unfortunately, most organizations still haven’t embraced Human Capital

Management as a critical organizational practice. Day-to-day priorities take place
over strategic planning. Cost cutting takes place over investment planning.
Justification of ROI for investment in Human Capital Management programs takes
precedence over the obvious conclusion that without such investments, a company’s
business future may be in dire jeopardy.
So what can we do?

We need to start by understanding and accepting what functioning Human Capital

Management can provide. Once senior managers embrace the concept that people
are the one sustainable long-term advantage, more organizations will take the
necessary steps to embrace Human Capital Management.
Someone needs to become the champion in recognizing that the transition to
Human Capital Management is both needed and feasible. The most likely
individuals for this role are either the CEO of the organization, the chief HR Officer,
or another senior executive who sees the big picture. Mid-level managers can also be
spark plugs for a drive towards Human Capital Management, but this requires an
additional selling step in the management loop, whereby the mid-level manager
must find an ally at the executive level to help carry the torch.
Next, companies must be willing to invest in Human Capital Management. Even
when hard ROI metrics are a challenge to predict, organizations can examine
before/after scenarios and track results and trends to determine whether Human
Capital Management programs have achieved their goals. The reality is that Human
Capital Management is not yet a well-recognized discipline, and there is very little
data available to compare companies who take a formalized approach to Human
Capital Management from those who do not. Nonetheless, few would argue that
companies who can effectively motivate their workforce are more competitive than
those companies who do not. Even considering the studies that have shown how
“best companies to work for” have generally outperformed their peers, being a “best
company to work for” doesn’t necessarily mean it practices Human Capital
Management.
Only when organizations take a formalized approach to Human Capital
Management will they truly begin their journey to making their human capital a
competitive advantage. Most of the human capital actions taken by organizations are
deployed independently, and as such, they may not be as successful as intended. The
Human Capital Management System advocated in this book outlines tangible
elements that are linked and aligned, and can be utilized by any organization to
ensure its human capital initiatives are successfully implemented.
The desire to transition to Human Capital Management should be a no-brainer for
most companies, since it should be obvious that the workforce can become a
sustainable advantage for organizations. But transforming an organization to Human
Capital Management is not simply a matter of attempting to hire the best people and
expecting them to magically outpace the competition. Any sports advocate knows
that you can have the best team, but there are several factors including team
chemistry, a good game plan, motivational leadership, and so on, that turn a group of
strong players into a championship team. There are many sports championships that
have been won by teams that weren’t the most talented.

To become a Human Capital Management organization, a blueprint or roadmap is

needed. This book is your roadmap to Human Capital Management. In it, you will
find the necessary steps and guidelines to help you navigate your organization
through the transition.
Chapter 3
Prerequisites to Human Capital Management

Before moving to the transformation stage of Human Capital Management, let’s

examine some preliminary requirements that need to be established.
First and foremost, the most critical prerequisite to Human Capital
Management is a strong belief and support from the CEO. Without this, the
ability to move human capital to or near the top of the strategic agenda is
difficult, if not impossible.
The way people are utilized and valued in a company starts with the CEO. No
matter what the values statement is, no matter what the stated culture, regardless of
the marketing of people programs in the company, the CEO’s commitment to his/her
people is the key differentiator and speaks the loudest. The way he/she behaves with
direct subordinates and others sets the tone both internally and externally about what
is valued within the company, and what is not.
When Dover Corporation acquired my employer Markem, a senior executive from
Dover named Bob Livingston came to visit us. Bob had just been assigned the
responsibility of managing a group of companies, including ours, as a result of the
reorganization of Dover. Prior to visiting our company headquarters for the first
time, Bob had sent word that he wanted to spend time with the senior management
team, first as a group, then with each executive individually.
Upon meeting with Bob one-on-one, I asked him about his views regarding the
human capital of the organization, and it quickly became obvious to me that he
understood the value of people, and the role they can play to help a company achieve
its strategies and goals.
In our discussion, Bob talked about the people programs he had put into action,
including one called DELLA (now Dover Corporation’s executive leadership
program) he had personally championed with Tina Sabin Governo, Dover’s Vice
President of Organizational Development.
After listening intently to Bob talk about his convictions regarding organizational
and leadership development, the importance of management, and HR’s role in the
business, it was clear to me that he understood the true meaning of Human Capital
Management.
Six months or so later, Bob Livingston was named President & CEO of Dover
Corporation. One of his first key decisions upon becoming CEO was hiring Jay
Kloosterboer as the first corporate VP of HR in Dover’s history. Together, Bob and
Jay began to put in place a number of human capital programs that have since made
a positive and meaningful impact on the corporation’s business and financial
performance. Among these programs was the establishment of formal Dover values,
leadership competencies, and a succession planning system. Rather than implement
each one of these as separate programs, Dover regarded them as cogs within a
comprehensive system, with the intent and commitment to make people one of
Dover’s competitive advantages. This example will be discussed in more detail in
the chapter on Organizational Development.

Just as the CEO’s commitment to Human Capital Management is critical, it’s

logical that his/her direct subordinates, and in particular, the Chief Human
Capital Officer, most often referred to as the VP of HR, must have the desire
and capabilities to lead such a transformation. This is the case because it’s
usually the Chief Human Capital Officer who needs to manage the human capital
activities.
If the Chief Human Capital Officer or other senior executives already in place
don’t have the leadership capabilities to lead the transformation to Human Capital
Management, the transition can happen, but the CEO will have to spend more time
being involved in areas of the business that his/her subordinates should be
managing. The alternative is replacement of key executives, but this will require
additional time and organizational energy.
In any case, the CEO’s commitment must be beyond a stated personal belief or
rhetoric. The CEO needs to take the time to articulate the rationale for the transition
to Human Capital Management, and all that it entails. We’ll review this point in
more detail later in the chapter on Leadership.

The Chief Human Capital Officer must have a capable team with the
potential to lead HR into a Human Capital transformation. Without strong HR
people already in place, the time and effort to achieve this transition to Human
Capital will be extended because it will be necessary for the Chief Human Capital
Officer to rebuild his/her team, rather than mobilize them to work on Human Capital
Management initiatives. Despite internally or externally posed obstacles, the new
Human Capital team must be ready to demonstrate through commitment and
perseverance that they’re ready to lead the transition to a higher level of human
capital organizational value.

Another important prerequisite for the transition to Human Capital

Management is the “readiness” of the organization for this change. Using the
analogy of Maslow’s Hierarchy of Needs, the organization needs to ensure that
physiological needs (metaphorically “food and shelter”) are in place before
attempting to reach self-actualization. In other words, an organization needs to
perform its role in providing physiological needs to the organization, by ensuring the
basic operational processes and functions are operating efficiently and effectively,
before moving on to other higher-level value added activities. Examples of basic
operations that need to be operating smoothly are sound management and
performance of finance and accounting systems, management of quality, payroll
administration, and so on.

Too many times I’ve seen various functions of an organization attempt to take on
ambitious projects when the basic requirements of the function are not being met.
One such example took place when I attended a combined meeting between Sales
and Marketing for a company I consulted with. During the Marketing presentation,
the VP of Marketing and a few other senior members of his team made presentations
about what they wanted to achieve. The list was long and unrealistic. After
completing his presentation, one of the Marketing managers asked the Regional
Sales VPs if they were committed to partnering with Marketing to address a
strategic goal that had been identified. After a long silent pause, one of the Regional
Sales VPs responded that since Marketing wasn’t delivering value as a tactical
organization, why should he want to partner with them on a strategic basis?
While this response was a bit harsh and perhaps not the appropriate forum for the
Sales executive to give the Marketing organization its performance appraisal, it was
a powerful message that hit the Marketing organization head on in regards to its
agenda. The message was clear: it’s essential to satisfy tactical and basic
requirements successfully before moving on to higher level challenges. This
guideline should apply to every department within the organization, regardless of
whether customers are internal or external.

Additionally, the “timing, scope, and size” has to be right for the transition to
Human Capital Management. For example, it would seem poor timing for an
organization to announce its plans to leverage human capital capabilities before,
during or immediately after a layoff. This would obviously result in a lack of trust
and credibility within the workforce regarding management’s commitment to its
people.
A timing decision also has to do with the number of other critical projects that are
underway in the organization. If there are too many projects going on at one time,
the organization’s ability to digest them is reduced. The net result is the inability to
gain support and traction, which will more than likely lead to organizational
rejection via inertia or a watered down, saturated effect. The transition to Human
Capital Management and the launch of a large-scale human capital initiative must be
completed carefully because the risk of damaging your business is high if done
poorly.

Another company I’m familiar with went through a transformation from being
heavily decentralized to a more centralized structure. In making the change,
management didn’t attempt to wash away all of the aspects of the organizational
culture that came with the decentralized structure. While there were definitely
aspects of the company’s culture that needed to be modified, there were other
aspects of the decentralized culture that needed to be kept and reinforced. Take for
example, the company’s long-held commitment to having each operational unit own
the relationship with the customer, something that was openly communicated by
executives as being one of the traits that made this particular company special.
Unfortunately, in operational terms, decentralization usually results in less
efficiency. In companies that are very decentralized, operating units may be
disconnected from other sister companies. This means that economies of scale are
missing, and financial performance languishes below its potential.
In this case, senior management knew that in order to compete more effectively
and increase its value as perceived by Wall Street, the bottom line would need to be
improved. But corporate leadership didn’t “throw the baby out with the bath water.”
They understood this decentralized approach was beneficial in each operating unit’s
competitive market space because it allowed its subsidiary companies to maintain
their entrepreneurial spirit and commercial ownership. Instead of simply attempting
to replace a decentralized operating culture with a centralized approach, leadership
took more ownership of staff and support operations at the corporate level where
real efficiencies could be gained through tangible corporate-wide projects. In doing
this, they only centralized where large-scale projects could be employed to bring an
advantage. This allowed the operating units to focus more time working on business
development, marketing, sales, and all activities geared towards bringing them
closer to their customers.
Second, understanding that there were many different strategic objectives to
choose from, the management team was careful not to initiate too many projects in a
short period of time that would overwhelm the organization and infrastructure.
While still taking an aggressive position in launching the chosen initiatives deemed
to be most important, the senior management team balanced the number and size of
projects with their subsidiaries’ ability to digest them culturally. Part of this
consideration included an assessment of the organization’s ability to manage them
based on resource availability and skills, as well as the load being placed on the
organization. The results have been successful to date, and the company is much
more efficient than it was five years ago. The share price has grown as well. Today,
many analysts regard it as a well-managed company with a good upside.
The story of Home Depot during the period of 2001-2007 is another example
worth looking at in the context of “timing, scope, and size” of human capital
initiatives and other strategic goals. This story has been well-documented, and in
particular via an article written by Robert J. Grossman, titled, “Remodeling HR at
Home Depot” and published in HR Magazine (November 2008). In his article,
Grossman outlined the well-publicized saga of Home Depot’s rollercoaster ride with
Bob Nardelli, who was brought into Home Depot as CEO in 2001 from GE. You may
recall some of the large-scale and ambitious goals Nardelli launched during that
time, the most important one being his decision to dramatically shift the company’s
culture from that of decentralized store management to one where corporate
management control became the dominating cultural force in the company. In a
culture that had formerly given the power to the stores, within a short period of time,
Nardelli dramatically altered the operations of the company with mandated controls,
metrics, and management discipline at the corporate headquarters level.
Shortly after joining Home Depot, Nardelli brought in a new HR leader, Dennis
Donovan, also a former GE executive. In addition to establishing new HR structures
and operational approaches, Donovan was successful in gaining Nardelli’s approval
to dedicate an HR management representative in every one of Home Depot’s 1,300
stores. This was a dramatic shift in culture as HR had previously been the
responsibility of store management.
There were other major changes that took place, and in total, the culture shock
that hit Home Depot was abrupt and substantial. Unfortunately, the number and scale
of the changes that Nardelli brought to Home Depot kept the company in a state of
conflict throughout his tenure, and the share price remained flat, despite increased
sales and profits. In January of 2006, Nardelli left Home Depot. Within one month,
Donovan left as well. In spite of improved sales and earnings, some people familiar
with this story would support the view that Nardelli’s time at Home Depot wasn’t a
success.

Why is this the case?

No doubt, many of Nardelli’s changes were logical and some would argue
necessary. Others would say that he tried to do too much within a short period of
time. Some would say his management style didn’t work within a company whose
culture was so directly opposite than the one he was trying to build.
Perhaps most insightful is the commentary made in Grossman’s story by one of
Home Depot’s regional executives at the time, who referred to Frank Blake’s
(Nardelli’s replacement as CEO) approach as follows: “Blake is reaffirming our
focus on our core values. ... The culture has shifted back to realizing we are a retail
company that needs to focus on customers.” 6
This is an astute observation, as any decision to dramatically change the strategy
of the company requires a preliminary look back to the mission, vision, values, and
culture. By doing this, it allows the decision makers to do a better job of assessing
the risks vs. rewards in planning organizational strategies and objectives.
There’s no question that Robert Nardelli and Dennis Donovan were seasoned
executives who’d been successful at GE and understood the concepts of Human
Capital Management. It’s also likely though, that they may have underestimated the
important links required to connect the actions derived from their business strategy
back to the foundation of the company: its mission, vision, values, and culture.
Or perhaps what they missed was the understanding between the relationships and
balance required in the number, size, and timing of the strategic and human capital
initiatives that were launched.
There’s no magic formula to determine how far one can push the system in
remaking an organization or in launching a human capital initiative that will
positively affect the company’s performance. But an analysis should be made in
regards to timing, scope, and the size of these initiatives before decisions are made
to go forward.
If the assessment of an organization’s readiness for Human Capital Management
shows that the organization isn’t ready to move forward, the root cause should be
examined and addressed. If the assessment analysis shows that the organization is
ready to move forward, then it’s time to get on with the business of applying the
elements of the Human Capital Management System. We will review this
implementation in the following sections of this book, starting with The Business
Foundation.
Section 2
Human Capital Management as a System

In Human Capital Management, mobilizing an organization to achieve large-scale

goals requires a “systems” based approach. To be clear about the meaning, let’s
examine the definition of the word “system.”
According to BusinessDictionary.com, a system is “an organized, purposeful
structure regarded as a whole and consisting of interrelated and interdependent
elements (components, entities, factors, members, parts, etc.). These elements
continually influence one another (directly or indirectly) to maintain their activity
and the existence of the system, in order to achieve the goal of the system.” 7

In Human Capital Management, the alignment of these elements is crucial for

maximum benefit. This is an essential operating principle. The fully mobilized
Human Capital Management System is much more powerful in driving
workforce momentum than any single part of the System itself.

There are four components that make up the Human Capital Management System.
When operationally in sync, they can have a substantial impact on an organization’s
results. The first of these is the “business foundation,” consisting of an
organization’s mission, vision, values, and culture. In this section we will review
each of the four elements of the business foundation independently, and how they’re
related to one another. We’ll also cover the relationship between the business
foundation and the “business strategy.” This is depicted in Figure 1 and will be
further discussed in Chapter 8.
 We’ll look closely at the second key ingredient in the Human Capital
Management System as well: the link between the “business strategy” and
“organizational goals,” and then “human capital initiatives.” This is shown in Figure
2 below.
 The third portion of the Human Capital Management System is what I have
termed the Human Capital Management Wheel or “performance wheel” shown in
Figure 3 below. I call this the performance wheel because the spokes of the wheel
generate action-oriented programs and activities leading to intended results. This
performance wheel will be reviewed in detail in Section 3.
 The fourth element influencing the success of the Human Capital Management
System is leadership required from the CEO, addressed in Section 4 of this book.
HR’s role is also covered in this section. The complete Human Capital Management
System is shown in Figure 4 below.
Exploring the Variety of Random
Documents with Different Content
The Project Gutenberg eBook of The decline of
the West
This ebook is for the use of anyone anywhere in the United
States and most other parts of the world at no cost and with
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laws of the country where you are located before using this
eBook.

Title: The decline of the West

Volume 1, Form and actuality

Author: Oswald Spengler

Translator: Charles Francis Atkinson

Release date: December 6, 2023 [eBook #72344]

Language: English

Original publication: London: George Allen & Unwin, 1926

Credits: Tim Lindell, KD Weeks and the Online Distributed

Proofreading Team at https://www.pgdp.net

*** START OF THE PROJECT GUTENBERG EBOOK THE

DECLINE OF THE WEST ***
 Transcriber’s Note:
Footnotes have been collected at the end of each
chapter, and are linked for ease of reference.
There are frequent references to Volume II of this
translation of Spengler’s work. The second volume has
not yet been provided to Project Gutenberg, so those
references are left unlinked.
Minor errors, attributable to the printer, have been
corrected. Please see the transcriber’s note at the end of
this text for details regarding the handling of any textual
issues encountered during its preparation.
Any corrections are indicated as hyperlinks, which will
navigate the reader to the corresponding entry in the
corrections table in the note at the end of the text.
THE DECLINE
OF THE WEST
 THE DECLINE
OF THE WEST
FORM AND ACTUALITY
BY

OSWALD SPENGLER

AUTHORIZED TRANSLATION
WITH NOTES BY

CHARLES FRANCIS ATKINSON

LONDON: GEORGE ALLEN & UNWIN LTD.

RUSKIN HOUSE, 40 MUSEUM STREET, W.C. 1

PRINTED IN THE UNITED STATES OF AMERICA

 THIS TRANSLATION IS
DEDICATED TO
ELLINOR JAMES
A FRIEND

Wenn im Unendlichen dasselbe

Sich wiederholend ewig fliesst,
Das tausendfältige Gewölbe
Sich kräftig ineinander schliesst;
Strömt Lebenslust aus allen Dingen,
Dem kleinsten wie dem grössten Stern,
Und alles Drängen, alles Ringen
Ist ewige Ruh in Gott dem Herrn.
—Goethe.
 TRANSLATOR’S PREFACE

It must be left to critics to say whether it was Destiny or Incident—

using these words in the author’s sense—that Spengler’s
“Untergang des Abendlandes” appeared in July, 1918, that is, at the
very turning-point of the four years’ World-War. It was conceived, the
author tells us, before 1914 and fully worked out by 1917. So far as
he is concerned, then, the impulse to create it arose from a view of
our civilization not as the late war left it, but (as he says expressly)
as the coming war would find it. But inevitably the public impulse to
read it arose in and from post-war conditions, and thus it happened
that this severe and difficult philosophy of history found a market that
has justified the printing of 90,000 copies. Its very title was so
apposite to the moment as to predispose the higher intellectuals to
regard it as a work of the moment—the more so as the author was a
simple Oberlehrer and unknown to the world of authoritative
learning.
Spengler’s was not the only, nor indeed the most “popular,”
philosophical product of the German revolution. In the graver
conjunctures, sound minds do not dally with the graver questions—
they either face and attack them with supernormal resolution or
thrust them out of sight with an equally supernormal effort to enjoy or
to endure the day as it comes. Even after the return to normality, it is
no longer possible for men—at any rate for Western men—not to
know that these questions exist. And, if it is none too easy even for
the victors of the struggle to shake off its sequelæ, to turn back to
business as the normal and to give no more than amateur effort and
dilettantish attention to the very deep things, for the defeated side
this is impossible. It goes through a period of material difficulty (often
extreme difficulty) and one in which pride of achievement and
humility in the presence of unsuccess work dynamically together. So
it was with sound minds in the post-Jena Germany of Jahn and
Fichte, and so it was also with such minds in the Germany of 1919-
1920.
To assume the rôle of critic and to compare Spengler’s with other
philosophies of the present phase of Germany, as to respective
intrinsic weights, is not the purpose of this note nor within the
competence of its writer. On the other hand, it is unconditionally
necessary for the reader to realize that the book before him has not
only acquired this large following amongst thoughtful laymen, but
has forced the attention and taxed the scholarship of every branch of
the learned world. Theologians, historians, scientists, art critics—all
saw the challenge, and each brought his apparatus criticus to bear
on that part of the Spengler theory that affected his own domain. The
reader who is familiar with German may be referred to Manfred
Schroeter’s “Der Streit um Spengler” for details; it will suffice here to
say that Schroeter’s index of critics’ names contains some 400
entries. These critics are not only, or even principally, general
reviewers, most of them being specialists of high standing. It is, to
say the least, remarkable that a volcanically assertive philosophy of
history, visibly popular and produced under a catchy title
(Reklamtitel) should call forth, as it did, a special number of Logos in
which the Olympians of scholarship passed judgment on every
inaccuracy or unsupported statement that they could detect. (These
were in fact numerous in the first edition and the author has
corrected or modified them in detail in the new edition, from which
this translation has been done. But it should be emphasized that the
author has not, in this second edition, receded in any essentials from
the standpoint taken up in the first.)
The conspicuous features in this first burst of criticism were, on the
one hand, want of adequate critical equipment in the general critic,
and, on the other, inability to see the wood for the trees in the man of
learning. No one, reading Schroeter’s book (which by the way is one-
third as large as Spengler’s first volume itself), can fail to agree with
his judgment that notwithstanding paradoxes, overstrainings, and
inaccuracies, the work towers above all its commentators. And it was
doubtless a sense of this greatness that led many scholars—
amongst them some of the very high—to avoid expressing opinions
on it at all. It would be foolish to call their silence a “sitting on the
fence”; it is a case rather of reserving judgment on a philosophy and
a methodology that challenge all the canons and carry with them
immense implications. For the very few who combine all the
necessary depth of learning with all the necessary freedom and
breadth of outlook, it will not be the accuracy or inaccuracy of details
under a close magnifying-glass that will be decisive. The very idea of
accuracy and inaccuracy presupposes the selection or acceptance
of co-ordinates of reference, and therefore the selection or
acceptance of a standpoint as “origin.” That is mere elementary
science—and yet the scholar-critic would be the first to claim the
merit of scientific rigour for his criticisms! It is, in history as in
science, impossible to draw a curve through a mass of plotted
observations when they are looked at closely and almost individually.
Criticism of quite another and a higher order may be seen in Dr.
Eduard Meyer’s article on Spengler in the Deutsche Literaturzeitung,
No. 25 of 1924. Here we find, in one of the great figures of modern
scholarship, exactly that large-minded judgment that, while noting
minor errors—and visibly attaching little importance to them—deals
with the Spengler thesis fairly and squarely on the grand issues
alone. Dr. Meyer differs from Spengler on many serious questions, of
which perhaps the most important is that of the scope and origin of
the Magian Culture. But instead of cataloguing the errors that are still
to be found in Spengler’s vast ordered multitude of facts, Eduard
Meyer honourably bears testimony to our author’s “erstaunlich
umfangreiches, ihm ständig präsentes, Wissen” (a phrase as neat
and as untranslatable as Goethe’s “exakte sinnliche Phantasie”). He
insists upon the fruitfulness of certain of Spengler’s ideas such as
that of the “Second Religiousness.” Above all, he adheres to and
covers with his high authority the basic idea of the parallelism of
organically-living Cultures. It is not necessarily Spengler’s structure
of the Cultures that he accepts—parts of it indeed he definitely
rejects as wrong or insufficiently established by evidences—but on
the question of their being an organic structure of the Cultures, a
morphology of History, he ranges himself frankly by the side of the
younger thinker, whose work he sums up as a “bleibendez und auf
lange Zeit hinaus nachhaltig wirkendes Besitz unserer Wissenschaft
und Literatur.” This last phrase of Dr. Meyer’s expresses very directly
and simply that which for an all-round student (as distinct from an
erudite specialist) constitutes the peculiar quality of Spengler’s work.
Its influence is far deeper and subtler than any to which the
conventional adjective “suggestive” could be applied. It cannot in fact
be described by adjectives at all, but only denoted or adumbrated by
its result, which is that, after studying and mastering it, “one finds it
nearly if not quite impossible to approach any culture-problem—old
or new, dogmatic or artistic, political or scientific—without conceiving
it primarily as ‘morphological.’”
The work comprises two volumes—under the respective sub-titles
“Form and Reality” and “World-historical Perspectives”—of which the
present translation covers the first only. Some day I hope to have the
opportunity of completing a task which becomes—such is the nature
of this book—more attractive in proportion to its difficulty. References
to Volume II are, for the present, necessarily to the pages of the
German original; if, as is hoped, this translation is completed later by
the issue of the second volume, a list of the necessary adjustments
of page references will be issued with it. The reader will notice that
translator’s foot-notes are scattered fairly freely over the pages of
this edition. In most cases these have no pretensions to being critical
annotations. They are merely meant to help the reader to follow up in
more detail the points of fact which Spengler, with his “ständig
präsentes Wissen,” sweeps along in his course. This being their
object, they take the form, in the majority of cases, of references to
appropriate articles in the Encyclopædia Britannica, which is the only
single work that both contains reasonably full information on the
varied (and often abstruse) matters alluded to, and is likely to be
accessible wherever this book may penetrate. Every reader no doubt
will find these notes, where they appertain to his own special subject,
trivial and even annoying, but it is thought that, for example, an
explanation of the mathematical Limit may be helpful to a student
who knows all about the Katharsis in Greek drama, and vice versa.
In conclusion I cannot omit to put on record the part that my wife,
Hannah Waller Atkinson, has taken in the work of translation and
editing. I may best describe it by saying that it ought perhaps to have
been recorded on the title page instead of in this place.
C. F. A.
January, 1926.
 PREFACE TO THE REVISED EDITION

At the close of an undertaking which, from the first brief sketch to

the final shaping of a complete work of quite unforeseen dimensions,
has spread itself over ten years, it will not be out of place to glance
back at what I intended and what I have achieved, my standpoint
then and my standpoint to-day.
In the Introduction to the 1918 edition—inwardly and outwardly a
fragment—I stated my conviction that an idea had now been
irrefutably formulated which no one would oppose, once the idea had
been put into words. I ought to have said: once that idea had been
understood. And for that we must look—as I more and more realize
—not only in this instance but in the whole history of thought—to the
new generation that is born with the ability to do it.
I added that this must be considered as a first attempt, loaded with
all the customary faults, incomplete and not without inward
opposition. The remark was not taken anything like as seriously as it
was intended. Those who have looked searchingly into the
hypotheses of living thought will know that it is not given to us to gain
insight into the fundamental principles of existence without conflicting
emotions. A thinker is a person whose part it is to symbolize time
according to his vision and understanding. He has no choice; he
thinks as he has to think. Truth in the long run is to him the picture of
the world which was born at his birth. It is that which he does not
invent but rather discovers within himself. It is himself over again: his
being expressed in words; the meaning of his personality formed into
a doctrine which so far as concerns his life is unalterable, because
truth and his life are identical. This symbolism is the one essential,
the vessel and the expression of human history. The learned
philosophical works that arise out of it are superfluous and only
serve to swell the bulk of a professional literature.
I can then call the essence of what I have discovered “true”—that
is, true for me, and as I believe, true for the leading minds of the
coming time; not true in itself as dissociated from the conditions
imposed by blood and by history, for that is impossible. But what I
wrote in the storm and stress of those years was, it must be
admitted, a very imperfect statement of what stood clearly before
me, and it remained to devote the years that followed to the task of
correlating facts and finding means of expression which should
enable me to present my idea in the most forcible form.
To perfect that form would be impossible—life itself is only fulfilled
in death. But I have once more made the attempt to bring up even
the earliest portions of the work to the level of definiteness with
which I now feel able to speak; and with that I take leave of this book
with its hopes and disappointments, its merits and its faults.
The result has in the meantime justified itself as far as I myself am
concerned and—judging by the effect that it is slowly beginning to
exercise upon extensive fields of learning—as far as others are
concerned also. Let no one expect to find everything set forth here. It
is but one side of what I see before me, a new outlook on history and
the philosophy of destiny—the first indeed of its kind. It is intuitive
and depictive through and through, written in a language which
seeks to present objects and relations illustratively instead of offering
an army of ranked concepts. It addresses itself solely to readers who
are capable of living themselves into the word-sounds and pictures
as they read. Difficult this undoubtedly is, particularly as our awe in
face of mystery—the respect that Goethe felt—denies us the
satisfaction of thinking that dissections are the same as penetrations.
Of course, the cry of “pessimism” was raised at once by those who
live eternally in yesterday (Ewiggestrigen) and greet every idea that
is intended for the pathfinder of to-morrow only. But I have not
written for people who imagine that delving for the springs of action
is the same as action itself; those who make definitions do not know
destiny.
By understanding the world I mean being equal to the world. It is
the hard reality of living that is the essential, not the concept of life,
that the ostrich-philosophy of idealism propounds. Those who refuse
to be bluffed by enunciations will not regard this as pessimism; and
the rest do not matter. For the benefit of serious readers who are
seeking a glimpse at life and not a definition, I have—in view of the
far too great concentration of the text—mentioned in my notes a
number of works which will carry that glance into more distant realms
of knowledge.
And now, finally, I feel urged to name once more those to whom I
owe practically everything: Goethe and Nietzsche. Goethe gave me
method, Nietzsche the questioning faculty—and if I were asked to
find a formula for my relation to the latter I should say that I had
made of his “outlook” (Ausblick) an “overlook” (Überblick). But
Goethe was, without knowing it, a disciple of Leibniz in his whole
mode of thought. And, therefore, that which has at last (and to my
own astonishment) taken shape in my hands I am able to regard
and, despite the misery and disgust of these years, proud to call a
German philosophy.
Oswald Spengler.
Blankenburg am Harz,
December, 1922.
 PREFACE TO THE FIRST EDITION

The complete manuscript of this book—the outcome of three

years’ work—was ready when the Great War broke out. By the
spring of 1917 it had been worked over again and—in certain details
—supplemented and cleared up, but its appearance in print was still
delayed by the conditions then prevailing.
Although a philosophy of history is its scope and subject, it
possesses also a certain deeper significance as a commentary on
the great epochal moment of which the portents were visible when
the leading ideas were being formed.
The title, which had been decided upon in 1912, expresses quite
literally the intention of the book, which was to describe, in the light
of the decline of the Classical age, one world-historical phase of
several centuries upon which we ourselves are now entering.
Events have justified much and refuted nothing. It became clear
that these ideas must necessarily be brought forward at just this
moment and in Germany, and, more, that the war itself was an
element in the premisses from which the new world-picture could be
made precise.
For I am convinced that it is not merely a question of writing one
out of several possible and merely logically justifiable philosophies,
but of writing the philosophy of our time, one that is to some extent a
natural philosophy and is dimly presaged by all. This may be said
without presumption; for an idea that is historically essential—that
does not occur within an epoch but itself makes that epoch—is only
in a limited sense the property of him to whose lot it falls to parent it.
It belongs to our time as a whole and influences all thinkers, without
their knowing it; it is but the accidental, private attitude towards it
(without which no philosophy can exist) that—with its faults and its
merits—is the destiny and the happiness of the individual.
Oswald Spengler.
Munich,
December, 1917.
 CONTENTS OF VOLUME I

Translator’s Note ix

Author’s Preface to the Revised Edition xiii

Author’s Preface to the First Edition xv

Chapter I. Introduction 1
Scope of the work, p. 3. Morphology of World-History, a new philosophy, p. 5.
For whom is History? p. 8. Classical and Indian mankind ahistorical, p. 9.
The Egyptian mummy and the burning of the dead, p. 13. The conventional
scheme of World-History (ancient, mediæval, modern), p. 15. Its origin, p.
18. Its breakdown, p. 22. Europe not a centre of gravity, p. 23. The only
historical method is Goethe’s, p. 25. Ourselves and the Romans, p. 26.
Nietzsche and Mommsen, p. 28. The problem of Civilization, p. 31.
Imperialism the last phase, p. 36. The necessity and range of our basic
idea, p. 39. Its relation to present-day philosophy, p. 41. Philosophy’s last
task, p. 45. The origin of this work, p. 46.

Chapter II. The Meaning of Numbers 51

Fundamental notions, p. 53. Numbers as the sign of delimitation, p. 56. Every
Culture has its own Mathematic, p. 59. Number as magnitude in the
Classical world, p. 64. Aristarchus, p. 68. Diophantus and Arabian number,
p. 71. Number as Function in the Western Culture, p. 74. World-fear and
world-longing, p. 78. Geometry and arithmetic, p. 81. The Limit idea, p. 86.
Visual limits transcended; symbolical space worlds, p. 86. Final
possibilities, p. 87.
Chapter III. The Problem of World-history. (1)
Physiognomic and Systematic 91
Copernican methods, p. 93. History and Nature, p. 94. Form and Law, p. 97.
Physiognomic and Systematic, p. 100. Cultures as organisms, p. 104. Inner
form, tempo, duration, p. 108. Homology, p. 111. What is meant by
“contemporary,” p. 112.

Chapter IV. The Problem of World-history. (2) The

Destiny-idea and the Causality-principle 115
Logic, organic and inorganic, p. 117. Time and Destiny, p. 119. Space and
Causality, p. 119. The problem of Time, p. 121. Time a counter-conception
to Space, p. 126. The symbols of Time—tragedy, time reckoning, disposal
of the dead, p. 130. Care (sex, the State, works), p. 136. Destiny and
Incident, p. 139. Incident and Cause, p. 141. Incident and Style of
existence, p. 142. Anonymous and personal epochs, p. 148. Direction into
the future and Image of the Past, p. 152. Is there a Science of History? p.
155. The new enunciation of the problem, p. 159.

Chapter V. Makrokosmos. (1) The Symbolism of the

World-picture and the Problem of Space 161
The Macrocosm as the sum total of symbols referred to a Soul, p. 163. Space
and Death, p. 165. “Alles vergängliche ist nur ein Gleichnis,” p. 167. The
space problem (only Depth is space-forming), p. 169. Depth as Time, p.
172. The world-idea of a Culture born out of its prime symbol, p. 174.
Classical Body, Magian Cavern, Western Infinity, p. 174.

Chapter VI. Makrokosmos. (2) Apollinian, Faustian, and

Magian Soul 181
Prime symbol, architecture, divinities, p. 183. The Egyptian prime symbol of
the path, p. 188. Expression-language of art: Ornamentation and Imitation,
p. 191. Ornament and early architecture, p. 196. The window, p. 199. The
grand style, p. 200. The history of a Style as organism, p. 205. On the
history of the Arabian style, p. 207. Psychology of art-technique, p. 214.
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