Strategic Human Capital Components (Bradley W Hall,Ph.D)

The human capital vision creates a concrete and measurable definition of success; the strategic components are plans that describe how to achieve that vision. Achieving the vision requires excellence in four components. (See Table 2-2.) If all four are well-executed, it is likely that your organization will have a sustained competitive advantage through people. The first three strategic components are critical roles - roles that are most important for customer and shareholder satisfaction. The fourth component enables the first three. 

Effective Executive Teams 

The key question to ask about the first critical role—effective executive teams—is: Are our executive teams more effective this year than last year? The executive teams may include the corporate top team, business unit teams, region/country-level teams, and functional leadership teams. Without a high-performing executive team at the top, little will happen below. Executive teams set the end-state vision and business strategies, and invest time and money to ensure that aspirations turn to business results. 

Match employees to target customers

Every business interaction is ultimately between two people – an employee and customer, or the employee who designs the customer interface and that customer. Most high-performance business relationships are heavily influenced by emotional compatibility.

Therefore, the employee selection process should begin with carefully selecting employees who will first best match the targeted customers, then the company. Although we lack understanding of the emotional state of the customer at the beginning of an interaction, it is possible to hire for and then match emotional predispositions of employees, e.g. sales, service to particular customers. This entails matching employee human attributes with customer human attributes. After a firm segments their customers by human need, it can then match the emotional attributes of employees to emotional attributes of customers. One of the ways to accomplish this is through applying classic personality typing during employee screening. The firm can then hire ‘‘personalities’’ who best match how the firm delivers its value to a certain segment of customers.

When employee and customer human attributes are not matched, it is stressful to the employee and increases the chance that the customer will not be satisfied. In many cases, management will end up chastising the employee for apparent performance shortcomings when in fact it is simply a mismatch of emotional attributes between employee and customer. Matching can be accomplished by creating customer needs profiles and employee needs profiles for particular customer ‘‘need’’ segments and employee roles respectively. The critical component of matching employee to customer is the first focus on what emotional end state the customer desires; next is hiring employees whose natural ability is to create such an end state. This goes far beyond the conventional job description of roles and tasks. When customer/employee emotional matching is embedded into core hiring practices, not only does customer and employee fulfillment increase but so does employee efficiency and effectiveness.

Ultimately, employees’ ability to fulfill customers is determined by their inherent human characteristics. Below is a comparative table of people with high self-esteem versus low self-esteem illustrating this principle.

Match employee values to business values

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In order for a firm to achieve its cultural and value objectives, it is critical to hire employees with a personal value system consistent with the firm’s cultural and value objectives. From the employee’s perspective, if the firm’s culture (value system) is out of sync with the person an employee believes himself or herself to be, the employee will be less effective, less productive, and less committed. In addition, the firm will be creating undue stress and possible emotional damage to its employees as human beings. More specifically, if the firm’s objective is to deliver humane and kind service to its customers, employees who are treated in the same fashion will be more likely to create this environment for customers.

The people who happen to be working as an associate for some business do not go through a miraculous transformation when they walk through the doors of that business. They are the same human being they always were. Employee stress arises when associates are hired because of their personality of wanting to please customers and yet the business has many restrictions that inhibit their ability to please customers. If an associate is empowered to please their customers, they will be a happier and a more content associate.

Leader’s Promise to Employees

I’ll ACKNOWLEDGE you – recognize your worth

I’ll be ACCOMMODATING – change things for your needs

I’ll be ACCOUNTABLE – take ownership of my decisions and their outcome

I’ll be COMMUNICATIVE – openly exchange ideas/information with you

I’ll be CONSIDERATE – think of you first

I’ll be COURAGEOUS – bold and tenacious, even when it’s tough

I’ll be EMPATHETIC – sensitive to your feelings

I’ll be ETHICAL – do what is right

I’ll be FAIR – balance your needs with others

I’ll be FLEXIBLE – open to alternatives

I’ll be GENEROUS – give more than expected

I’ll be HONEST – tell the truth

I’ll have HUMILITY – give credit and avoid self-importance

I’ll be INSPIRING – provide enthusiasm toward a goal

I’ll be LOYAL – always there for you

I’ll be PERSONABLE – easy to be with

I’ll be RESPECTFUL – recognize your dignity as a person

I’ll be SUPPORTIVE – provide help and remove barriers

I’ll be TOLERANT – accept you without judgment and forgive mistakes

I’ll be TRUSTING – believe in you

I’ll be TRUSTWORTHY – do what I say and what needs to be done

Source : Costumers are People, The Human touch. John Mckean 2002

HR Operating Model

“Companies now are finding that the HR issues are, in fact, center stage to business competitiveness. The intellectual capital, core competencies and organizational capabilities are all the pieces that are central to success.”
ULRICH – ‘HUMAN RESOURCE CHAMPIONS’, HARVARD PRESS, 1997.

There is a real and frequently voiced view within HR and the broader business community, that HR has not always had the tools to deal with these issues. Where in the past HR has possessed in some part the skills to engage, it has not always given itself the opportunity to do so. Clearly there have been barriers to HR’s effectiveness in the way it was organized and this chapter seeks to examine some of the issues and solutions proposed to tackle these.
Traditionally HR has often held very direct and ‘open door’ relationships with employees. In doing so it has fulfilled an essential gap in the business – the voice or advocate of the employee. It has also filled the role of facilitator and executor of all people related processes, regardless of whether these were necessary or HR was the most appropriate method of delivery. There is now a set of pressures that are emerging that demand that HR is able to respond in a different way to meet them. The pressures come from differing directions:
From the CEO
• Focus on ‘core competencies’
• Companies retrench to focus on core activities
• Creates pressure on HR to ‘prove its worth’
From the CFO
• Pressure for cost reduction
• Benchmarking against sector high performers
• Requirement to demonstrate the ROI for HR activities
From line manager
• Support for them to have the autonomy to manage their teams
• Tools to improve the performance of their teams
• Less labour intensive interaction with HR
From employees
• Improving service to employees
• Modern employees act as ‘volunteers’ and demand high standards of service from HR
• Employees have a new one-to-one relationship with companies

To meet these pressures the HR profession has begun to articulate new ways of creating value through the function. A new model has emerged in recent years that aims to provide HR with the platform on which to deliver its promise. The new model requires HR to position itself to engage with the business at the right levels, in the right ways.
We shall examine the organizational structures that allow HR to tackle the challenges it faces today and the approaches HR leaders have used to deploy these.

The new roles
The above pressures are broadly driven by four themes:
1. Strategic – drive the business strategy forward.
2. Financial – demonstrate functional cost reduction and value.
3. Change – work with and lead the business through change.
4. Performance – improving the performance of individual employees and teams.

HR must organize itself to meet these and demonstrate that it is achieving them. Delivering this clearly has two key components that HR must develop; the skills to achieve and the organizational design to allow it to engage. Prior to this we will consider the new roles and structure that allow HR to take on these challenges.

Source : Transforming HR. Ian Hunter & Jane Saunders.2005