Thursday, 1 July 2010

Developing HCM Strategy

 

   Despite my focus on HR 2.0 during the past month, I’ve been continuing to work on HCM as well (consulting and writing).

My writing includes this article on developing HCM strategy in Croner’s ‘Developing HR Strategy’.  It’s not available online, but here’s a short extract (contact me if you want the rest):

 

Strategic HCM delivers increases in human capital by putting people first. So, rather than considering how people can deliver given business results, it looks at what can be achieved from a given group of people and their human capital. This human capital centric approach is also the core theme in Ed Lawler’s recent book, Talent (2009). According to Lawler:

“Companies that are truly competing on the performance of their people need to adopt a human capital or HC-centric approach to organising — simply doing better talent management is not sufficient. Rather, special attention needs to be given to implementing organisational structures, processes and systems that will help manage and support the performance of an organisation’s human capital.”

 

Some examples of talent- or human capital-centric processes, which are all being used in one or more organisations, include:


 Talent shoring — basing a company where talent is rather than where customers are, or costs are less.

 Communityship — for example, placing project-based staff in communities and moving them across projects to provide broadly based performance feedback and to support career advancement.

 Head farming — proactively searching for talent and building relationships in advance of recruitment (v head hunting).

 Job sculpting — creating jobs to fit talent, rather than the other way around.

 Dream making — discussing the individual’s dreams and how these can be achieved at work, rather than just looking at how the individual can help achieve the organisation’s plans (as in traditional objective setting).

 Deal management — broadening out performance management to review the organisation’s engagement of the employee, as well as how the employee is performing for the organisation.

 Career partnership — providing an employee with the opportunity to work over several discrete periods, gaining experience with other organisations in between these times.

 

Putting people first does not imply a return to the “pink and fluffy”, “tea and sympathy” world of personnel, but it does require a step back from the business focus of HRM. The reason I suggest this is that human capital does not just support the achievement of existing business objectives — it provides value in its own right. So, while the use of human resources is a secondary activity supporting an organisation’s traditional value chain, HCM is a primary activity in a
completely different value chain — the creation of human capital.

This means that, although HR does provide value as part of the business leadership team, focusing on the traditional value chain, the function provides much more impact by focusing on the HCM value chain and the creation of the right form(s) of human capital leading to competitive advantage.

This shift in focus suggests that the future of HR, or at least the function responsible for people management (which Lawler suggests should be called the Organisational Effectiveness unit), is not to be yet another business function (as in the current call to be a business function first, HR function second) but for HR to pride itself in its focus on, and its abilities to develop human capital.

 

 

There’ll be more on this point about putting people (employees) first very shortly…

 

 

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