Managers manage what they can measure–and they find it hard to measure people. While they can calculate payroll expenses, they typically don’t have the tools to determine causal relationships: why valued employees really leave, what happens when new staff are promoted rapidly, how training influences productivity. And when economic pressures dictate that labor costs should be adjusted to business realities, many managers don’t know when they are discarding valuable knowledge assets rather than simply cutting costs. Absent the facts, managers are hard-pressed to apply systems thinking to the management of human capital. They’ve had to make such decisions piecemeal, with little sense of their broader impact and the economic tradeoffs involved.