Wednesday, February 18, 2015

People advantage is competitive advantage

(image credit)

April 18th 2002 notes on leadership, business and economics

This article is a great support for the work that we do at PDI. It rings the bells we have rung on human capital strategy or strategic talent management, and the authors use choice metaphors that I believe our clients will resonate with:
Today development must be embedded in the company’s bloodstream, with all managers responsible for giving team members ongoing feedback and coaching.

As any good gardener knows, to promote healthy growth, in addition to fertilizing and watering, you also must prune and weed. 
The Vice President of Human Resources for a major multinational client has specifically emphasized this critical dual responsibility (i.e. feedback and coach, prune and weed) and has called on PDI to offer solutions. The authors also cite rather evocative examples of what company leaders are doing:
Henri Termeer, the CEO of Genzyme, a company that focuses on developing therapies for rare diseases. He meets regularly with people who suffer these rare diseases: “He wants to feel angry about the pain and loss the disease is causing and [he wants to feel] passionate about the need to help. And he wants to transmit that passion to those working at Genzyme."

The bonding process can succeed only when senior management realizes that the company is more than a mere economic entity; it is also a social institution through which people acting together can achieve meaningful purpose. In the war for talent, organizations are engaged in what one senior executive describes as a ‘competitive for dreams’.

McKinsey and other organizations making the change have found new meaning in the term competitive strategy as they compete for the hearts, minds, and dreams of exceptional people.
Here are the key challenges and responsibilities of both the top executive and the HR leader and, of course, the members of their company:

The Role of the Executive in the “War for Talent” Era
  • A changing view of strategic resources
  • A changing view of value
  • A changing view of senior managers’ role
Implications for HR Professionals
  • The building challenge
  • The linking task
  • The bonding process
Interestingly, and certainly not surprisingly, the authors’ strategic implications for HR include two words that are powerfully related to each other: linking and bonding. The emphasize - in ways that sociologists and, yes, psychologists, do as well - the social institution that is the nature of companies and other organizations. 

Reference: Bartlett, C.A. & Sumantra, G. (Winter 2002). Building competitive advantage through people.  Sloan Management Review (pp 34-41).

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