Tuesday 15 October 2019

Competitive People Strategy

Perhaps the most interesting article in this month’s HR magazine (other than my own Different Slant of course) is this one on Helmut Schuster at BP.

I love a lot of the suggestions, including the idea about HR creating / catalysing an ecosystem.

However, "HR professionals need to be businesspeople first who just so happen to look after the people agenda." hugely undervalues what HR can provide. Schuster (whose background is from outside HR) is absolutely correct in suggesting that two brains are better than one, so what's the point in us echoing the same thinking as everyone else in the rest of our businesses?

But the point I most object to is Schuster’s suggestion that:

“Don’t whatever you do talk about ‘people strategies’. I hate this phrase as much as I hate the word ‘HR’. What you need to have is a corporate strategy. The people part of it is simply the people agenda. Now get on with it.”

Ah yes, because people are simply a part of the business and managing them is totally simple too. NO! - it’s not true. But if people believe in this then I can see how they might want to fill HR with businesspeople first people, ideally ones from the rest of the business. In fact, why bother having HR at all? (a question which some organisations are asking, but which again shows a lack of understanding about the value HR can add.)

There’s a lot of this attitude around unfortunately. Eg I was really interested in reading Kevin Green’s new book ‘Competitive People Strategy’. And I’m not going to be too hard on this book, as it does reference my first book, ‘Strategic Human Capital Management’, so it’s obviously brilliant! But it does fall into the same trap as Helmut Schuster.

That’s because the book explains the basis for business strategy and presents models like MichaelPorter’s Five Forces, the Boston Consulting Matrix, and Kaplan and Norton’s Strategy Maps. And it does review the key role of organisational capabilities. But it doesn’t explain the role of these capabilities in the organisation strategy maps (see my interview with Porter for an explanation of this) or the opportunity for creating value.

And although the chapters on HR and leadership opportunities are very interesting they are presented as best practices to support inimitable business strategies. There’s nothing on the need for inimitable, best fit people and organisation strategies. And there are no tools for developing organisation strategy which are equivalent to the tools listed for developing business strategy.

Basically, it deals with ‘people support activities’ linked to corporate strategy. That’s fine, and we do need to perform these activities, but it’s not how we act strategically, or as Schuster claims, to “drive business strategy”.

Karen Beaven's book Strategic Human Resource Management takes a similar approach. This book refers to my second boook, The Social Organization, so it's obviously brilliant too. And it is more people centric than Kevin's book, and there are some great case examples from Karen's own experience at River Island in it, but again most of the models etc focus on competitor analysis, PESTEL analysis, etc, rather than getting to understand people.

(And what GDPR has to do with being strategic I've no idea.)

Josh Bersin is absolutely right that HR's new job is about making work more human (though this need isn't that new - as it was the focus of 'Strategic Human Capital Management' back in 2007, and of this blog since then as well.

But that's not just about ensuring conversations about human values are part of our conversations about the rest of the business. It's also having conversations about creating new business potential from these people values.

It's about real competitive people strategy. Not just supporting the business strategy and their use of business models, but our development and effective implementation of "people strategies", using organisation models to support this strategising.

So if you want to know how to create strategic value through people:

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