Talentship and the New Paradigm for Human Resource Management: From Professional Practices to Strategic Talent Decision Science
Boudreau, John W., Human Resource Planning
As HR strives to gain greater strategic influence, human resource and business leaders must look beyond the HR profession. They must learn how the strategic "decision sciences" of finance and marketing evolved from the professional practices of accounting and sales. Today's HR is focused mainly on its professional practice, which, like accounting and sales, is important but incomplete. Full strategic partnership requires a "decision science" that enhances decisions about talent resources; finance and marketing enhance decisions about money and customers. We describe the historical lessons from finance and marketing, and how they reveal the elements of a new decision science for talent resources, and a logical framework to support the decision science. Then, we provide an example showing how organizations can use this framework to gain new insights about the talent decisions that are most critical, and enhance the strategic insights and influence of those decisions.
People, intellectual capital, and talent are ever more critical to organizational strategic success. This observation is so common today that it almost goes without saying. Digitization, labor shortages, growth through acquisitions, simultaneous downsizing and expansion, workforce demographic changes, and globalization are just a few of the trends that have made talent a top priority (Lawler & Mohrman, 2003; Frank & Taylor, 2004).
Today, top executives are quick to point out that managing talent well is their personal concern; it is perhaps the most difficult issue preventing their organization's maximum success. Yet, when we ask them if their decisions about the talents of their people are made with the same rigor, logic, and strategic connections as their decisions about money, technology, and products, they readily admit that their talent decisions are much less rigorous. Business leaders are increasingly frustrated with traditional HR, even when it is executed well or bestin-class. One CFO (now the CEO of his organization) put it well: "I value the hard work of HR, but I worry that our organization may not know which talent issues are the important ones, versus which are mostly tactical. I know how to answer that question in finance, marketing, and operations. I'm not sure how to do it for talent. I wish HR had more to offer here."
Frustration with the current state of traditional HR, and hopes for something more, are reflected in questions like these:
"Why is there so little logical connection between our core business management processes and our talent management processes? Our strategic planning, marketing, operations, and budgeting processes connect deeply and logically with how we create competitive success and shareholder value. Yet, at best these processes reflect only general talent goals like headcount, labor costs or generic HR programs. At worst, people issues appear only as a headcount budget at the end of the plan."
"We invest heavily in the latest HR measurement techniques: HR scorecards, HR financial reports, ROI on HR programs, and studies of how HR programs enhance attitudes, skills, and abilities. Yet, these HR measures seldom influence key business decisions, such as acquisitions and entry into new markets. They provide little insight on how well we compare with our competitors in creating competitive advantage through people. Can talent measures truly drive business decisions and investments?"
"Not all investments are equally important in all situations. Marketing would never get away with a strategy to 'provide 40 hours of advertising for every product.' Yet, our HR programs typically apply similarly to everyone, such as '40 hours of quality training.' Shouldn't we deploy our HR investments with greater precision and distinction, to have more impact and less wasted effort?"
"HR spends a lot of time showing the value of HR programs. Yet, in Finance, Marketing, and Operations we judge their value through results: How much they help our leaders make better decisions about those resources to drive organizational effectiveness. …