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The Power of People…Realized

HR's Role in Building a Competitive Organization ©
by Dave Baker, Managing Director and CEO of Human Capital Advisors®

The greatest competitive edge in any company comes from its technology and its people.  But technology never delivers itself, you need great people who can.  Therefore, the most competitive edge to any organization is having exceptional people who can develop, build, innovate and deliver great products or services.  Strategic people leadership, otherwise known as Human Capital, is critical to both short term and long term success.

I was hired as the first partner in charge of Human Capital for one of the largest venture capital firms in the country.  Why?  They realized that most of the issues and challenges that happened within their portfolio of companies (those companies that they had invested hundreds of millions of dollars into) generally centered more around poor talent and leadership than it did from the science or technology that was being developed.  As such they wanted to reduce those issues by hiring a dedicated professional who would concentrate on ensuring that only exceptional talent was hired into each company, and that the companies would learn and administer best practices surrounding their talent.  As such their commitment paid off dramatically with a much greater positive exit (IPO or acquisition) ratio than before my arrival.  My company, Human Capital Advisors, grew out of that dedication and expanded to a much larger list of companies.

HR's has two primary responsibilities: Recruiting great people to your company and taking care of them once they are on board.  A strong HR department will utilize the latest scientific processes and systems to ensure that the company is attracting, hiring and retaining the best talent available in the market.  Companies who do not have an HR strategy will always be second to companies who actively and methodically recruit the best talent.  Furthermore, because they truly understand that their people are their most powerful strategic asset, work feverishly to implement and manage programs focused on their retention.  Programs like leadership development are not just for the managers self-improvement, but competitive companies know that employees don't leave companies, they leave poor managers.  As such they invest on continuously improving the leadership in their companies and therefore the management of their workforce.

Implementing core competencies like scientific selection processes to improve the quality of each hire to the organization boosts the internal talent pool significantly, and if sustained, ensures that your talent pool is superior to your competitors and thus makes your company stronger, quicker, more responsive.  Selection is the foundation of an exceptional workforce. 

Therefore the company who develops a people strategy with exceptional talent oriented processes including recruitment and selection, people development and employee relations, for example, give them a competitive edge.  In time that strategy, if sustained, will make the company statistically better in every business measure, including performance, revenue, and service than those that do not.

Here is a great analogy.  Two teams walk out onto the field.  Both teams have the fundamental skills to perform the sport they are going to compete in.  However, one team only selected their players from a group who had taken their skills to a higher level, possibly learned new techniques, worked under more challenging conditions, and were dedicated to their own skill development.  In fact, this team went so far as to provide them specialized training so that they would learn the next level of skills for their development.  Furthermore, this team always screened for the softer skills, the motivation factor.  This team was full of individuals who not only had better skills, they were driven to get better and were highly motivated to deliver only their best at all times.  Now let me tell you who is on each team.  One team is made up of all former high school stand-out athletes, they still play their sport a couple days a week and at least once every weekend mostly to remain in good physical condition.  The second team is made up of professional athletes who dedicated themselves to their sport, have received the best coaching, have learned all of the latest skills and trained to compete against like-minded talent every day.  Which team are you going to want to represent you?  You pick. 

That's what Human Resources does.  It recruits, selects, trains and motivates the best available talent.  They know that their competitive edge is their people and they dedicate the professional resources, specifically Human Resources leadership, to give them that advantage.

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