A Call for Hu­man Cap­i­tal Ex­per­tise: The Com­pet­i­tive Ad­van­tage

Trillions - - In This Issue - By Dr. Chance T. Ea­ton

In to­day’s ever in­creas­ing com­pet­i­tive work en­vi­ron­ment, there are a va­ri­ety of fac­tors that con­trib­ute to suc­cess. Ex­am­ples in­clude op­ti­mal cost struc­ture, en­hanced cus­tomer ex­pe­ri­ence, op­er­a­tional ef­fi­cien­cies, as­set uti­liza­tion and tar­geted cus­tomer mar­ket­ing, to name just a few. The prob­lem is that all of these strate­gies can, and will, even­tu­ally be repli­cated by com­pet­ing firms. As a re­sult, these fac­tors carry less sig­nif­i­cance. In fact, I’ve never worked at a com­pany where we didn’t sur­vey the en­vi­ron­ment and at­tempt to un­der­stand how our com­peti­tors cre­ate eco­nomic value, fol­lowed by repli­cat­ing their strate­gies where use­ful.

Peo­ple, on the other hand, can­not be repli­cated. When peo­ple are al­lowed to un­leash their unique ex­e­cut­ing, in­flu­enc­ing, re­la­tional and strate­gic tal­ents, com­pa­nies de­rive new and more ef­fec­tive strate­gies for ef­fi­cien­cies, cus­tomer ex­pe­ri­ence, prod­uct/ser­vice in­no­va­tion and team­work. You must note that ev­ery suc­cess­ful strat­egy that has been ini­ti­ated orig­i­nated from some­one’s abil­ity to gen­er­ate new ideas and work with oth­ers to ex­e­cute suc­cess­ful im­ple­men­ta­tion and drive home re­sults. Ul­ti­mately, peo­ple’s un­leashed tal­ents are what drive eco­nomic value – not the strate­gies them­selves.

As an ex­am­ple, I once worked at an or­ga­ni­za­tion that at­tempted to add new prod­uct and ser­vice lines to its busi­ness model. It was the owner’s de­sire to look more like a full-ser­vice provider, but since there were no cham­pi­ons to strate­gi­cally po­si­tion the ser­vices, no cham­pi­ons to ex­e­cute the ser­vices cor­rectly and no cham­pi­ons to mo­ti­vate the team mem­bers to get be­hind the new ser­vices, the en­tire full-ser­vice line failed. It wasn’t the full-ser­vice-provider strat­egy that failed; it was the lack of hu­man ta­lent to make it work.

I also once worked with a com­pany that had mim­icked other suc­cess­ful com­pa­nies by im­ple­ment­ing en­ter­prise risk man­age­ment prac­tices. The prac­tices pro­vided very lit­tle ac­tual mean­ing­ful ac­tion un­til the right per­son was hired to man­age the process. Even though the struc­ture of the pro­gram re­mained the same, the tal­ented man­ager drove the process in a cre­ative and prac­ti­cal man­ner, re­sult­ing in an in­valu­able process for com­pany strate­gic plan­ning.

The point of both of these ex­am­ples is that tal­ented hu­mans drive value and that hu­man cap­i­tal is the com­pet­i­tive ad­van­tage for the 21st cen­tury. Tra­di­tion­ally, we have looked to hu­man re­sources (HR) de­part­ments to play a role in lever­ag­ing hu­man cap­i­tal. The prob­lem is that HR de­part­ments are

skilled in man­ag­ing pro­cesses and trans­ac­tional func­tions, not in build­ing and lead­ing hu­man cap­i­tal. Ex­am­ples of HR pro­cesses in­clude pro­vid­ing over­sight to re­cruit­ment, pro­gres­sive dis­ci­pline, poli­cies/ pro­ce­dures, com­pen­sa­tion and ben­e­fits, per­for­mance man­age­ment and em­ployee re­la­tions. HR plans, con­trols and or­ga­nizes hu­man re­sources pro­cesses, but what the mar­ket­place also needs are pro­fes­sion­als who un­der­stand the re­search, the­ory and prac­tice of ex­pand­ing the knowl­edge and ef­fec­tive­ness of peo­ple to ac­com­plish or­ga­ni­za­tional per­for­mance.

It is my rec­om­men­da­tion that com­pa­nies be­gin staffing and in­vest­ing in em­ploy­ees who are hu­man cap­i­tal ex­perts – peo­ple who un­der­stand hu­man na­ture and know how to un­leash hu­man po­ten­tial in the work­place. This new generation of hu­man cap­i­tal ex­perts come from a va­ri­ety of closely re­lated fields, in­clud­ing or­ga­ni­za­tional be­hav­ior, learn­ing and de­vel­op­ment, in­dus­trial psy­chol­ogy, or­ga­ni­za­tional de­vel­op­ment and ed­u­ca­tion lead­er­ship. Ex­perts in these fields typ­i­cally carry mas­ter’s or doc­tor­ate de­grees. Though this rec­om­men­da­tion may seem un­nec­es­sary for a sur­vival men­tal­ity, it is crucial to bring out the best in your work­force if you are go­ing to com­pete in the next cen­tury. The fol­low­ing is a check­list of what to­day’s com­pa­nies need in or­der to be com­pet­i­tive for the 21st cen­tury:

Ed­u­ca­tion and train­ing: Peo­ple skilled in teach­ing and fa­cil­i­ta­tion and in build­ing con­tent that bridges be­tween schol­arly re­search and di­rect ap­pli­ca­tion to the job. Fur­ther, peo­ple who can track out­comes de­rived from learn­ing in­ter­ven­tions, so as to en­sure ad­e­quate return on in­vest­ment.

Coach­ing: Peo­ple skilled in per­for­mance coach­ing who can set clear goals with em­ploy­ees and use strength-based ap­proaches to max­i­mize em­ploy­ees’ unique tal­ents.

Coun­sel­ing: Peo­ple skilled in lis­ten­ing to em­ployee chal­lenges (per­sonal and work), ex­plor­ing com­mon themes to their dis­tress and help­ing them ex­plore choices for bet­ter liv­ing.

Per­for­mance man­age­ment: Peo­ple who can ap­ply va­lid­ity and re­li­a­bil­ity strate­gies to per­for­mance mea­sure­ment and cre­ate sys­tems, ed­u­ca­tion and coach­ing that al­low em­ploy­ees to take ac­count­abil­ity for their own per­sonal per­for­mance.

Cul­ture and cli­mate: Peo­ple who know how to de­velop and drive mis­sion, vi­sion and shared-val­ues ac­tiv­i­ties and im­ple­ment these prac­tices into the fab­ric of the or­ga­ni­za­tion. The ul­ti­mate goal for mean­ing­ful mis­sion and vi­sion work is that the true cul­ture and cli­mate are ex­pressed by the em­ploy­ees and for the em­ploy­ees.

As­sess­ments and peo­ple an­a­lyt­ics: Peo­ple skilled in ad­min­is­ter­ing, an­a­lyz­ing and syn­the­siz­ing dif­fer­ent per­son­al­ity, be­hav­ioral and en­gage­ment as­sess­ments to help em­ploy­ees and work groups find greater ef­fec­tive­ness in how they get their work done.

Suc­ces­sion plan­ning: Peo­ple skilled in as­sess­ing the ta­lent pipe­line and build­ing pro­grams that can meet to­mor­row’s needs. These can in­clude trainee pro­grams and lead­er­ship de­vel­op­ment and ex­ec­u­tive de­vel­op­ment pro­grams.

Strate­gic peo­ple plan­ning: Peo­ple skilled in dia­logue, as­sess­ment and im­ple­men­ta­tion of strength-weak­ness-op­por­tu­nity-threats strate­gies, crit­i­cal po­si­tion re­views to iden­tify high risk po­si­tions, high po­ten­tial anal­y­sis to iden­tify to­mor­row’s high per­form­ers and risk man­age­ment to iden­tify high im­pact and high prob­a­bil­ity chal­lenges that will haunt a com­pany to­mor­row if ac­tion plans are not put in place.

Pro­gram ad­min­is­tra­tion: Peo­ple who are skilled lead­ers that can bring it all to­gether in a strate­gic way by com­mu­ni­cat­ing and im­ple­ment­ing mean­ing­ful so­lu­tions. This can be one of the most chal­leng­ing skill sets for a hu­man cap­i­tal ex­pert. If they are heavy on the re­search side and poor at com­mu­ni­cat­ing the rel­e­vance and ap­pli­ca­tion, they will not con­nect with the com­pany. If they are too heavy on the ap­pli­ca­tion side and do not un­der­stand the sup­port­ing re­search, they will not bring the nec­es­sary rigor to the pro­posed so­lu­tions.

Next-generation com­pa­nies need next-generation em­ploy­ees. Since most em­ploy­ees are trained in their par­tic­u­lar trans­ac­tional tasks, com­pa­nies need to in­vest in hu­man cap­i­tal ex­perts who are fully aware of the rich hu­man dy­namic of the work­place and, more im­por­tant, can im­ple­ment strate­gies that bring out the best in their peo­ple. In­vest in what is al­ready your high­est val­ued as­set – your peo­ple.

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