The New Science of Human Capital

The New Science of Human Capital –   Deploying a talent management strategy should not be the domain of HR managers and leadership teams. There’s a role for all managers to play.

The need for relevant talent, at the right place and right time, where it makes the most difference in an organization is critical. This is a two-step process. First, organizations need to determine where talent has the biggest impact  and second they need to figure out how to improve the capacity of that talent to drive change and innovation. So first, they need to ask how they can determine where changes and talent practices in the organization would potentially have the biggest effect. That requires a job responsibilities and position assessment process.

“Employees see lots of places they can be pivotal that leaders, even managers, close to those employees might not see.”

 Here are some insights from  Beyond HR: The New Science of Human Capital by John Boudreau, USC Marshall School of Business professor .

  • It is important to connect business processes or strategy to talent. Strategy related questions often revolve around how to compete, what makes an organization different, how an organization can protect that difference in how they create value. With a strategy in place the organization can begin to think about processes, resources and other supporting elements such as: “If this process is critical, where are the bottleneck?”
  • The importance of executing a strategy permeates organizations but leaders often don’t have viable frameworks for thinking about talent. They often have far superior frameworks for thinking about revenue growth, customers, technology and production on a day-to-day basis. Managers need to develop decision frameworks that offer a logical pathway on how talent connects to business success and ensure that these frameworks are integrated into decision processes.
  • It is pivotal to ask “Is it about increasing or protecting the resources we have?” or “Is it about making the resources we have more valuable?” Those strategic pivot points are important as the basis for understanding where talent might make a big difference. For example, at Disneyland, the high-level strategy is about delighting customers but at that level the organization can’t really say where the pivot points are in talent or strategy. Disney does a lot of things well but one of the things that everyone says can be improved is waiting in line. It’s a bottleneck, it’s a place where there’s an important pivot point for Disney. So the talent that might be most pivotal at Disney might be the talent that could make a difference to shortening waiting lines.
  •  Mickey Mouse is a franchise for Disney but for a strategic leader, a manager of the park or a senior leader, a better question is “What’s pivotal?” and “How much difference could we make improving the performance of Mickey Mouse versus improving the performance of some other talent pool that might be more pivotal?”
  • So in thinking about organizations, it is important to develop pathways on how managers can identify pivotal people and craft questions that are needed to screen pivotal people. The first question is to ask “What’s pivotal in our processes or our strategy?” It is surprising how infrequently leaders understand the need to make that connection. Managers are keen to dive right into human resource practices and say “I need a new incentive system, I need better recruiting or I need a succession planning system”. It has become the language of HR. It is in our practices. For leaders outside of HR it is important to think about what is pivotal in the process or the business or the resources that they manage then they can start to ask where talent improvements could make the biggest difference.
Another question is whether this process should involve employees themselves- interviews with them to determine just how pivotal they are? The answer is a resounding yes. Not only to figure out how pivotal they are but how pivotal they might be. 
  • Another question is whether this process should involve employees themselves- interviews with them to determine just how pivotal they are? The answer is a resounding yes. Not only to figure out how pivotal they are but how pivotal they might be. Employees see lots of places they can be pivotal that leaders, even managers, close to those employees might not see. The human resource field has developed sophisticated control systems such as job descriptions etc. Increasingly, in fast changing organisations with global competition, as strategies change, the nature of the pivotal elements of the job change often and when that happens, it’s often employees that have insights into how they could be more pivotal to the organization.
  • An example: Combat vs. Ambassadorship. In the United States Navy, the head of HR,  says the Navy has been very good for decades at combat and they know how to help young soldiers move planes around a carrier deck and use weapons in a war situation. But the head of HR has identified a critical need for local engagement- when they’re interacting with a local population or coalition forces and when they’re on camera. The question is “How much of that is in the job description for this individual?” They know a lot about how to manage combat situations. It continues to be fundamentally important but pivotal-ness is shifting towards hearts and minds and toward what might be called ambassadorship on the street in some situations. That’s anew strategic imperative that needs to translate into an HR recruitment and training priority.
Executing a talent management strategy isn’t just the domain of HR managers and senior executives. There’s a role for all managers to play.
  • Once point A has been achieved, which is to determine who are those pivotal people. The next few questions are “How can we develop them?” “What steps should we be taking. “Do they get special treatment?” When we look at  a cleaner at Disney, we know it is well engineered. It’s fundamentally critical, but Disney may not need performance incentives in that area. On the other hand, answering a customer’s question properly, helping a family find a shady spot to watch the parade at just the right moment, those are things that happen on the fly. In those areas, sweepers may vary a lot in terms of their performance, they need to aim investments at pivot points. That means they probably do things differently for sweepers than they do for Mickey Mouse, and it probably means that they aim performance incentives and performance management to those places where performance really makes a difference and not just everywhere for everyone.
  • How can organizations continue to shepherd the development of pivotal people? How can people evolve to new roles and aspire to them? It is important to determine what is pivotal and how valued it is. That is a helpful discussion and an interesting paradox. If you’re at Disney and you say, I want to serve our guests in a way that gives me a lot of discretion with opportunities to make decisions, the answer might be we need to get you out of the Mickey Mouse costume and on the street as a sweeper. That seems counter-intuitive.
  • When an organization develops or when it uncovers a pivot point that is unexpected, it might have to do some readjusting of people’s preconceived notions about roles that are relatively more important than others. Not just with preconceived notions but with an approach that often goes right to the heart of the organization’s structure. An organization that traditionally defines cleaning jobs as more custodial and then looks at the difference between how they might pay, develop and train Mickey Mouse- as opposed to cleaner, they are missing this hidden pivotal. It is a big change in virtually everything they do about cleaners – from their job description to the way they’re recruited, selected,  appraised and rewarded.

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