May 31, 2004

The people principle

Dr. Wayne Brockbank spoke to the Tata Group on The people principle and the new role for Human Resources. Some excerpts are:

"The question now is how to cultivate a culture that supports and creates new innovations that will keep you ahead of the competition. You can't rely on the past; you have to bet on creating the future. The mandate this development delivers for HR professionals is to manage organisational capability much better in the future than they have in the past.
The world's best-managed companies understand what the organisational context needs to be for their business to survive and prosper. They know the key capabilities that success demands. That's what we call organisational capabilities.

Gearing the company for fast change

Let’s assume for a moment that fast change - which means the ability to change quickly, to be adaptable and flexible, to move quickly - is the chief capability you need to be successful at the Tatas. Then the questions that rise are:
- To what extent are we hiring people with the proven ability of working in a fast-change environment?
- Do we promote people who are able to manage a fast-change company?
- Do we transfer people to give them the opportunity to practise fast change?
- Do we fire people who do not change quickly?
- Do we have a way of measuring the ability of a company to change quickly?
- Do we reward people who change quickly?
- Do we have training and development programmes that help and encourage fast change?
- Do we use the voice of customers and shareholders while communicating a fast-change environment across the company?
- Do we have a communication mechanism in place to help people throughout the company understand that fast change is critical?
- Do we have an infrastructure that helps people manage change quickly?
- Do we structure the organisation so that it is flexible, adaptable and able to move quickly?
- Are work processes designed to move quickly and facilitate fast change?
- Does the arrangement of the physical space around us encourage fast change?
- Finally, are leaders regular and consistent role models of fast change?

The best-managed companies, such as Unilever, Marico, Citicorp, Hewlett Packard, AT&T and others, use this basic framework to make sure their HR practices are fully and exactly aligned to create the organisational capabilities required to execute strategy in the most powerful way possible.

Linking competency model to results
I think competencies, too, have a crucial role to play, but the problem here is that most competency models are so generic it’s hard to see how they add much value. The best companies make sure that competencies are customised and tailored to the specific, strategic requirements of their business. Linking a competency model to results can produce a powerful package than can drive measurement in compensation systems.

Measuring HR outcome is very, very easy, and it’s a simple process. The most difficult part in measuring HR is knowing what to measure, not doing the measurement itself. Once we know what to measure, measurement can occur very quickly. Most HR measurement systems start by measuring HR in everyday practices. That’s not a very good idea. What you should be doing, instead, is try to measure what HR does.

In a complete HR measurement system, you have to measure what HR does, what it delivers and what it impacts. Once you understand this, you can show the relationship between what HR does, what it delivers and what it impacts."