Nov 11, 2005

Boston Consulting Group's Co-Chairman on HR and Leadership

In a recent interview to Business Today BCG's Co-Chairman says:

HR has always been a support function. I would rather say that there are businesses in which it has a strategic role as well. Your ability to manage people, maybe, is what distinguishes you from the competition. Let us take a hypothetical example: a company acquires raw material, designs a product, assembles it and delivers it to the client. You can outsource every one of these functions to a greater or lesser degree. So what is a company? A company comprises a group of people which has a creative insight about how it can use all these resources that are available in the world to solve a particular customer's needs in a creative way. That is the only part you cannot outsource and that function has to be one that the company is superb at. Crucially, that function has to do with attracting the right people and getting them to work in a collaborative way. Yet, you also have to manage this network that you have formed for the work you are not doing in-house anymore. As a result, people become the real assets. So, a company must have a strategy for attracting the right people and retaining them; it is very easy for them to go across the street and do the same thing for someone else. Creating an atmosphere in which they say: 'I'd rather be here than anywhere else,' becomes essential and takes a lot of skill to create. That's where the human resource function takes on a strategic dimension.


Leaders are traditionally thought to be strong people who set the direction and policies of the organisations they lead. It's a top-down model. But this may not work in a knowledge society. Today's leaders have to create organisations in which all levels of the hierarchy have to contribute to the tailoring and adaption of a common vision. This obviously can't come from a single brain.

Nothing new in these thoughts, but feels good to hear the BCG honcho say the obvious :-)