Belief #1: People are more than just cogs in the wheel

Many business leaders today agree that we need to put people first. Most chief executives trot out the tired adage ‘people are our most important asset’ on a fairly regular basis. But what does this really mean?

Most things I hear said and that read about HR still refer to people’s increased importance in reference to their role in implementing business strategy. Managers know that it is not enough to develop a great strategy, they need to be able to deliver it too. And they know that execution of these plans is increasingly difficult. So they need to engage their people. People are no longer just a resource to be used and expended, they need to be treated as a key asset; being developed and invested in.

I agree that people are central to effective implementation of strategy but I also think people, or at least talent, offer a much more significant opportunity than this. People can be central to the identification and development of strategy as well as its implementation.

The right people, managed in the right way, and supported by the right environment now offer any organisation the greatest opportunity for competitive advantage (or for organisations in the public sector, for transforming the type and level of services that are provided).

This is why the concept of human capital is useful. We should no longer see people as just resources or assets (human resources) but providers of human capital. And increasingly, an organisation’s success is determined by the amount of human capital it has available. Not just because human capital enables it to implement its business strategy, but because of the strategic ambition that human capital enables the organisation to have.

Think about the other sources of competitive advantage which were previously the most important: financial capital and customer capital. When these were each most important, businesses didn’t just think about using them to implement existing business strategies. They have been used to develop new business strategies supported by activities that would have been impossible without them. So why do we think about human capital / people management simply as something that will ease implementation of existing business strategies?

I think we need to be thinking about the extra capability or engagement we could develop in our people, and the additional business benefits this would provide. People management shouldn't just support existing business objectives, it can also provide the basis for setting more stretching or different business goals.

My beliefs about people management

To continue my recent attempt to increase the authenticity of this blog, over the next month or so, I am going to post my top beliefs about people management.

I think these beliefs are probably already quite clear to regular readers and subscribers to this blog, as well as to those who have read my book, and to my clients and other contacts. However, rather than simply present my views about other people’s research and thinking, it may help to see where I am coming from, as a commentator and consultant, if I make it a bit clearer what I do actually believe in.

This may also help you confirm your own beliefs… and you may like to add comments to my blog to agree or disagree with mine…

Strategic Human Capital Management is now available on Kindle

My book is now available on Kindle, Amazon's new e-book, for the amazingly good value of $28.75.

Amazon hopes that the Kindle will become the ipod of reading, and it does seem to offer significant advances over previous similar technologies.

In particular, the Kindle provides access to the web, through mobile broadband which can be picked up from anywhere, not just wi-fi hotspots. So readers can, for instance, check my blog posts on the points I am making on the page of my book they are reading. Or they can easily check what other blogger, or authors such as Peter Cheese, Gary Hamel, Lynda Gratton, Gurnek Bains or John Boudreau are saying about these areas.

88,000 other books are also available, many for just £9.99. And although the Kindle sells at £399, costs will no doubt falls, as its functionality further improves, over the next few years.

It may be difficult to imagine using this advice now, but how many of us could have imagined the ipod and podcasting taking a fairly central role in our lives even just ten years ago?

Then there's the environmental benefits as well.

As well as signalling major changes in reading patterns, the Kindle suggests a very different approach to writing books. This week's Newsweek features an article on the Kindle which includes this quote from Ben Vershbow at the Institute for the Future of the Book:

"The idea of authorship will change and become more of a process than a product."

The article goes on..

"This is already happening on the Web. Instead of retreating to a cork-lined room to do their work, authors like Chris Anderson ["The Long Tail"], John Battelle ("The Search") and NYU professor Mitchell Stephens (a book about religious belief, in progress) have written their books with the benefit of feedback and contributions from a community centered on their blogs."

So what do you want our next book to be about?

Imagination Based Management

I think SHRM President, Susan Meisinger, described the advantages of imagination over evidence quite nicely in August's HR Magazine.

Firstly, she quotes Albert Einstein as stating:

"Imagnation is more important than knowledge. For knowledge is limited to all we know and understand, while imagination embraces the entre world, and all there ever wil be to know and understand."

As AnneLiseKjaer explains, there are no facts (knowledge / evidence) about the future.

Meisinger quotes Thomas Friedman, author of The World is Flat, interviewing an internet expert behind Israel's economic success, as saying:

"We are not investing in products or business plans today, but in people who have the ablity to magine and connect the dots."

Meisinger notes:

"HR professionals have an important role in creating an organisation culture that cultivates the imagination of their workers, taps the power of those imaginations, encourages experimentation and removes obstacles for innovative action."

Absolutely. I think SystematicHR's got some good posts on this.

But my build on this is that HR is more likely to help the rest of the organisation be more innovative when it is being imaginative itself.

So, welcome to the world of imagination based management...

Evidence based management

I was a bit more critical of Philip Stiles' article on global HR than I'd intended, probably because I had just been listening to some mp3 files sent out by the CIPD after the September conference, including one on Phil Rosenzweig on the Halo Effect. And I thought that some of the challenges aired by Rosenzweig applied to Stiles' research.

Rosenzweig emphasises the need for decisions to be based not just research, but good research, which as he explains in his blog , posting on his experience at the CIPD, must be: "well designed, with solid data, and appropriate inferences drawn from the data".

So commenting on in-company research conducted by First Direct (HSBC), he questions whether engagement leads to business performance, or the other way around, and indeed challenges the value of engagement itself: "Engagement is surely important, but by itself is likely to be of little value". Based upon this, he then questions the value of celebrating personal events like births and weddings if this is at the expense of making tough decisions in a business.

Mmm. Well, my belief is that engagement does have tremendous value, and I know that there is engagement research which indicates causation not merely correlation. But I'm not sure I could ever prove this fact to the level of confidence that Rosenzweig requires.

Of course, Rosenzweig isn't alone in emphasising the value of research based decision making. Jeffrey Pfeffer published a book on the subject, Hard Facts, last year. And see this website.

The Academy of Management Journal's October edition also emphasises the need for this research to come from academic rather than just practitioner periodicals.

Also, a few weeks ago, People Management featured an interview with Rob Briner, who is fairly well known for his view that there is no medical or psychological meaning behind stress, and has more recently been talking extensively about evidence based management.

Briner lists empowerment, TQM, excellence, downsizing, emotional intelligence, business process re-engineering, and what he describes as his current favourite, talent management as fads developed due to lack of clear research evidence. Unfortunately he doesn't provide any evidence for this inference. To me, these are all part of my current tool bag, and I use them when the need arises. Yes, these were probably all over hyped when they were introduced but there were good reasons for these peaks in activity too - companies need to be able to identify and apply new thinking that can provide them with competitive advantage, and organisations that have applied these techniques effectively have and do gain advantages from using them.

In fact, Briner does note that "evidence is only one of many factors, such as past experience and organisational data, that should also shape decisions". I agree these other factors are important - and I do agree that research evidence has its place. But I'd also add intuition and imagination to this list.

So if I favour a more rounded approach to people management to pure evidence-based management, why do I post so frequently on the latest research findings (Watson Wyatt , Towers Perrin and IBM etc)? I'll admit this is is partly because doing this draws a lot of traffic to my blog. More importantly, it allows me to describe my own views and the extent to which they agree or differ from the research findings. And this to me is the real benefit of research - it provides the basis for conversations within organisation about what it is that executives within those organisations believe, and what they're going to do.

And most research studies, even the most informal, and even if there are findings that can be challenged, are usually based upon a central nub of 'truth'. On this, I'd agree with Rob Briner who states that: "You need to look at the picture emerging from the cumulative body of research". When many pieces of research say the same thing, for example that engagement does inform performance, this is enough for me.

You may also be interesting in reviewing my comments on HCM as a decision science (here and here). And I also recommend Lancaster lecturer Anthony Hesketh's challenge of scientism.

Global HR in a Flat World

People Management includes an article written by Cambridge lecturer Philip Stiles; 'A world of difference'.

Stiles' research in multinational companies has found that organisational culture has more influence on HR practice than national culture. To some extent, this contrasts with Hofstede's findings that national culture provides the strongest influence on the behaviour of employees. It also contrasts with Laurant's findings that national culture has an even greater impact in global companies than in domestic ones: "a multinational environment causes people to cling even more strongly to their own cultural values". (*)

Why do I say 'to some extent'? Well, firstly, just because this is what HR practice is, it doesn't mean that it's what HR practice should be.

For example, Stiles notes that:

"In performance management we might have expected a large divergence of views in areas such as pay for performance or merit-based promotion, but we found little
or no difference across the world."

To me this is less about global practice diversity than it is about practice diversity per se. It takes me back to Gary Hamel's point that although in most sectors there are a number of different business models, across all sectors there are very few variations in management practice.

We tend to apply 'best practices' without thinking too hard about their application - to sector, function or geography. As Stiles notes:

"Organisations seek what works - and, for HR in multinational companies, the range of options is limited to a few common practices that are believed to secure high performance... Companies imitate the practices of other successful firms to gain legitimacy".

So just because we don't vary our HR practices across countries doesn't mean they would perform much better if we did.

Secondly, Stiles does note that practices do vary, but that these variations are driven by regulatory criteria rather than variations in values:

"We did see local adaptations of global standards, of course, but these were often to do with a particular country's regulatory practices, labour market issues and stage of economic development, rather than its cultural values."

In my experience, it's often hard to disentangle these: regulatory practices are often a result of cultural values. So I'd argue that values are having an effect.

Thirdly, it turns out the culture itself, does actually make a difference:

"Rolls-Royce recognised that traditional, western-style performance appraisals and forms of upward feedback could be problematic in Asian countries. Other western-based multinational were careful when it came to recognising individual achievement in countries with collectivist cultures. But even here we saw in many cases that the companies took a "non-negotiable" approach to their global practices. The local variations they allowed were minor."

Well actually, these look like quite significant variations to me. And even if they are small, it doesn't mean that they're not important. In my book, I quote Thomas Davenport as explaining:

"God is in the details. Nuances make all the difference. Subtle shadings in the definition of human capital elements are magnified when applied in a strategic context."

I'm still with Hofstede - flat or not, I think cultural issues are bound to have a very significant impact on the way we manage our people around the world.


* = Note Stiles quotes research conducted by Gerhart and Fang which shows organisational differences accounted for more variance in employees' values than did country differences.


PS:



I will be speaking on these and related issues in a presentation at VIEW, the online and “virtual” conference and trade show for HR, Benefits, Staffing, Compensation, and Training professionals, on December 12-13, 2007. The event is 100% online, virtual and free to corporate HR practitioners.

My session on Global HR: Trends and Differences is scheduled at 9.00pm GMT / 4.00pm ET and will be followed by a live Q&A with attendees.

VIEW features all the benefits of a premier in-person HR conference without the cost, travel or hassle associated with traditional events. Attendees will be able to interact with over 1,000 people via chat or email, attend educational presentations by over 40 of the best thought leaders in each of 9 pavilions, visit over 70 booths in the exhibit hall and enter to win prizes. The best part is that it can be done without leaving the comfort of your office (in fact, you attend VIEW from wherever you happen to be, as long as you have a high speed Internet connection).

For more information, see www.hr.com/view.

HCM jobs?

In the spirit of authenticity, I should note that although my plan is to focus on consulting through Strategic Dynamics for at least the next couple of years, as I’m making a transition of sorts, it has seemed to be an appropriate time to look more widely as well.

So I’ve recently been talking to a range of consultancies for roles as diverse as Practice Director for HCM at Axon (Europe’s leading SAP implementer) and Client Partner in Leadership Services at Korn/Ferry, but I’ve not yet found a role in another consulting firm that I have felt would enable me to provide as much value as I know I can, and indeed have been doing, through Strategic Dynamics (well, OK, some of them I've not been offered either).

I’ve also considered a return to a corporate HR position. For example, I’ve recently been interviewed by Saxton Bampfylde Hever for a very interesting role: VP, HR Strategy & Planning for a 100,000 employee, UK based multinational.

If you know of any roles like this, or know of anyone who might, or even just someone who may want to talk to me about how we could create more value through their people management strategy and activities, but on an employed rather than consultancy basis, I’d be pleased to hear from you.

For me, the vehicle / contract basis I use for my work is less important than what I do within this work - and what enables me to optimise the value that I add and create. If I can do this best within a corporate role, and can move to this without letting my current clients down, then so be it.

But for the meantime, my main focus will be continuing to go into consultancy work through Strategic Dynamics.

HCM consultancy

As I'm going to be doing more consultancy through Strategic Dynamics, I thought this would be a good time to describe a bit more about the sort of work I do.

Also, I had a very interesting conversation earlier this week with William Tincup and Bret Starr, from US based HCM marketing firm Starr Tincup who have been talking to a number of HR suppliers in the UK this week (see William's new blog). Once we'd talked about the state of the UK's HR / HCM consultancy market, I asked whether they had any advice for me / Strategic Dynamics.

One of their ideas was to set up an HCM ning, which I have started (largely for my own interest and amusement) and you can access here. I must admit I'm not too sure what I do with as yet, however!

They also observed that although I appear strong on intellectual capital, it's difficult to tell from my website and my blog what it is that I do. "You need to make the invisible visible", they said.

This wasn't a surprise to me. I'm continually frustrated that I've not yet found a way to post on my blog about my client projects without betraying client confidentiality (although I'm not sure there will ever be a solution to this). I do need to write up a couple of case studies but other than this, I would simply summarise what I do as follows:

"I help UK / European / global business that already have sound approaches to people management (I'm happy to work on basic, transactional HR activities but don't want this to be the focus of my work) to gain further improvements in the capabilities and engagement of their people, and the effectiveness of their organisations. I do this by working with my clients to:

• Review and develop their people management strategies (through short diagnosis studies, workshops etc)


• Develop strategic objectives and measures for these strategies (often using my HCM value matrix)


• Lead and support major projects to implement these strategies, particularly in engagement, talent management, organisation development etc (I have plenty of experience in assessment, leadership development, organisation design, communication, change management etc)


• Develop the capability of HR Directors and teams to do more of this themselves.

In everything I do, my focus is on providing a significant benefit - helping clients meet their business goals and create human capital / organisational capability that enables them to set different or more stretching business objectives.

So I think what clients get from me is an insightful and collaborative approach, but mainly the ability they need to make the difference through their people."

In many ways, I'm in the same situation with my clients, and particularly potential clients, as these clients, mainly in HR, are when they (you?) have to convince their (your) business colleagues of the benefits of investing in HCM invisibles like engagement.

So, any suggestions, particularly from those of you in corporate HR roles, as to how I can make my services less invisible to you?

In search of Authenticity

In making his move, Andrew reminded himself of the old proverb; "A turtle makes progress only when it sticks its neck out".

I have a mental picture I use to remind me to move forward in life and my career. This is of me, when I was learning to ski, and about to launch down a slope, remembering that I needed to look down the fall line rather than lean back into the mountain - if I didn't want to fall over. It reminds me that I need to embrace change and momentum - to make a move when I know I need to do so.

Some of my regular readers will know that I've been juggling a rather busy portfolio over the last 18 months - my main roles being working for myself (as Strategic Dynamics), as a Research Associate for Learning Light, a Lecturer for CBA in Croatia, and as a Director for Human Capital Consulting with Buck.

This last role has provided me with some good experience while I’ve been developing my own business, and useful development in reward and HR outsourcing (through ACS) - both of which are outside my main areas of experience. It's also been a real pleasure to work with a very talented team.

But it's not been somewhere I want to continue to build my career. So to be authentic to myself, I have recently made the decision to leave and will be concentrating on my own business from the end of this calendar year.

I've still got availability in January if anyone wants to do some work together!

Where's your True North?

One of the key leadership behaviours required to engage their people identified by Towers Perrin is authenticity.

This has been getting a great deal of interest recently.

In Authenticity, Pine and Gilmore, authors of the Experience Economy, argue that businesses / products need to be authentic, noting that consumers choose to buy or not buy based on how real they perceive an offering to be. And the Harvard Business Review has been asking whether outsourcing is killing authenticity.

Perhaps more relevant for HR folks are Rob Goffee’s and Gareth Jones’ Why Should Anyone Led You and and former Medtronic CEO, Bill George’s True North (see http://www.truenorthleaders.com/).

This book shows how anyone who follows his or her internal compass can become an authentic leader. Someone who is genuine, true to what they believe in, and who can lead with consistent values; through their heart as well as their head.

This is the subject of a conversation I had with Invensys VP of Talent Management, Andrew Armes, recently. Andrew is one of the most authentic people I’ve ever met and puts this at the centre of his coaching and process development activities. In fact, for the sake of authenticity, Andrew is in the process of leaving Invensys to set up his own vehicle, Sixth Patriarch, an HR consultancy / executive search firm focused on unlocking individual and organisational performance through authentic awareness and behaviour.

For those of us who have more to do in this area, Bill George recommends creating a personal development plan centred on five key areas:

• Knowing your authentic self


• Defining your values and leadership principles


• Understanding your motivations


• Building your support team


• Staying grounded by integrating all aspects of your life.
  

Not easy, but certainly worth doing, if we want to both get the sorts of business results we need, and to live our lives in a way that will make best use of our time on Earth.