The New Human Capital Strategy: Improving the Value of Your Most Important Investment--Year After Year

257 Pages·2008·2.85 MB·English

by  Bradley W. Hall

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P
RAISE FOR
The New Human Capital Strategy
“Hall has put it all together in this insightful and highly constructive
book. As both an academic and senior HR executive, his unique per-
spectives on human resource management has resulted in a ground-
breaking and integrative approach to human resource management.
While we can all appreciate that people are the key to competitive ad-
vantage, Hall’s key contribution is his development of a comprehensive
and integrated model for human capital. This is sorely needed, espe-
cially today when HR professionals are seeking new ways to get traction
in their companies. This book is not only thoroughly researched, but
brilliantly written. A must-read for everyone who takes leadership de-
velopment seriously.”
—Allen Morrison, Ph.D., Professor,
Global Management and IMD, Lausanne, Switzerland
“Nothing sparkles on the shelf like a management book that explains
complex issues with simple insight. The New Human Capital Strategy
provides a compelling theory of people management for sustained busi-
ness performance. But its real value lies in its powerful pragmatism. Hall’s
book is destined to become a diamond in the rough of human resource
theory.”
—Michael Dixon, Ph.D., Vice President,
Global Business Services, IBM Asia Pacific Melbourne, Australia
“A real breakthrough in approaching this subject from a practical an-
gle. This is neither a ‘nice to read’ philosophical essay of little use nor
a standard ‘how to’ book. Brad Hall takes the human dimension of
organizations to a new strategic level. By placing human capital in a
business context bringing together the internal and external environ-
ment, he provides organizations with a true opportunity to finally
meet the challenge of making ‘people their greatest asset.’ His practi-
cal roadmap gives a meaningful perspective allowing people to make
a greater contribution to the strategic growth of their organization by
discovering their true potential.”
—Jean Claude Noel, Program Director, INSEAD Global Leadership
Center; and former COO of Christie’s International—Paris, France
(more . . .)
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“This is a great read! This book will show any leader how to transform
clichés like ‘people matter’ and ‘people are our #1 asset’ into a tangible
business strategy, a competitive advantage, and significantly better business
performance. The case for moving away from an organization that has a
mediocre human resources department to an organization that understands
the value of ‘human capital’ is compelling. More importantly, this book
provides a pragmatic approach to the transition and will convert any leader
who reads this into a believer!”
—Tom DiDonato, Senior Vice President, Human Resources,
American Eagle Outfitters, Pittsburgh, Pennsylvania
“This is an essential read for those striving for competitive advantage in
a rapidly changing, global economy. It will challenge the best of minds in
human capital leadership.”
—Wendy Murphy, Global Managing Partner,
Heidrick & Struggles International, New York
“The whole is greater than the sum of its parts (Aristotle, 350 BC). The
systems perspective is the cornerstone of Hall’s Human Capital Manage-
ment Model, integrating all aspects of people management: recruitment,
staffing, development, performance improvement, rewards, and retention
into a disciplined system that produces year-over-year human capital im-
provements. Throughout the book, Hall provides countless examples from
research and real-world experiences to highlight how and why today’s
siloed approach ultimately fails and how delivering measurable results
requires a fundamentally different approach.”
—Peggy Wagner, Ph.D., Senior Vice President,
Talent Management, Mizuho Corporate Bank, New York
“Brad Hall has brought long-needed discipline and metrics to the devel-
opment of talent within business. While most companies merely set up
programs, Brad has devised instruments to bring quantitative rigor to the
people-development process and thus make possible a far more intelligent
decision-making process on human capital in the boardroom.”
—Elliott Nelson, Global Head, Talent Management & Leadership
Development, Akzo Nobel, Arnhem, The Netherlands
“HR executives should read this book and act on its recommendations.”
—Edward E. Lawler III, Director, Center for Effective Organizations,
University of Southern California, Los Angeles
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T N
H E E W
H
U M A N
C
A P I T A L
S
T R A T E G Y
Improving the Value of Your
Most Important Investment—Year after Year
Bradley W. Hall, Ph.D.
American Management Association
New York • Atlanta • Brussels • Chicago • Mexico City • San Francisco
Shanghai • Tokyo • Toronto • Washington, D.C.
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Special discounts on bulk quantities of AMACOM books are
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organizations. For details, contact Special Sales Department,
AMACOM, a division of American Management Association,
1601 Broadway, New York, NY 10019.
Tel.: [phone]. Fax: [phone].
Web Site: www.amacombooks.org
This publication is designed to provide accurate and authoritative
information in regard to the subject matter covered. It is sold with
the understanding that the publisher is not engaged in rendering
legal, accounting, or other professional service. If legal advice or
other expert assistance is required, the services of a competent pro-
fessional person should be sought.
Library of Congress Cataloging-in-Publication Data
Hall, Bradley W.
The new human capital strategy : improving the value of your most
important investment—year after year / Bradley W. Hall.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-0-8144-0927-5
ISBN-10: 0-8144-0927-X
1. Human capital—Management. 2. Performance—Evaluation.
3. Personnel management—Evaluation. 4. Organizational effectiveness—
Evaluation. 5. Corporations—Valuation. I. Title.
HD4904.7.H285 2008
658.3'01—dc22
2007024945
© 2008 Bradley W. Hall.
All rights reserved.
Printed in the United States of America.
This publication may not be reproduced,
stored in a retrieval system,
or transmitted in whole or in part,
in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise,
without the prior written permission of AMACOM,
a division of American Management Association,
1601 Broadway, New York, NY 10019.
Printing number
10 9 8 7 6 5 4 3 2 1
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Contents
Foreword by Clayton M. Christensen ix
Introduction: A Systematic Approach to Growing
Your Human Capital 1
Time for a New Approach 3
Today’s Approach to Human Capital Management 6
Shifting to a New Approach 8
Why This Book Was Written 11
PART 1: DESIGNING THE BLUEPRINT
Chapter 1: A New Source of Competitive Advantage 17
Maintaining Competitive Advantage 18
Competing on Human Capital: What’s It Worth? 20
The Need for a New Paradigm 23
v
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vi CONTENTS
Human Capital Management 24
Executing the Human Capital Strategy 31
The Outcomes of HCS 36
Conclusion 37
Chapter 2: The New Human Capital Strategy 39
The Current State of HR Strategies 40
Building a Human Capital Blueprint 44
The Human Capital Theory 47
The Human Capital Vision 49
Setting the Human Capital Vision 50
Strategic Human Capital Components 51
Plans That Deliver Business Results 55
Determining the Optimal Blueprint for
Your Organization 59
Conclusion 63
Chapter 3: Creating Capabilities to Execute the Blueprint 65
Today’s Human Resources Function 67
Today’s Performance Gap 70
Aligning the HR Structure 76
Fixing HR Systems 85
Shifting Values from the Internal to the External 89
Using HR Skills to Provide Change Leadership 94
Conclusion 99
PART 2: BUILDING THE SYSTEM
Chapter 4: Effective Executive Teams 105
Why Are Executive Teams Important? 107
Building the Executive Team 107
Executive Team Design 108
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CONTENTS vii
Improving Executive Team Performance: A Roadmap 119
Conclusion 127
Chapter 5: Leaders Who Deliver Results 128
Leadership Development: The Current State 130
Building Leadership Excellence: A Roadmap 136
Conclusion 157
Chapter 6: Key Position Excellence 160
Key Position Performance: The Current State 162
Key Position Excellence: The Roadmap 172
Conclusion 187
Chapter 7: Improving Workforce Performance 189
Performance Improvement: The Current State 192
Building a High-Performance Organization:
The Roadmap 200
Conclusion 215
Chapter 8: Putting It All Together 219
Step 1: Create Capabilities to Drive Change 220
Step 2: Define Success 226
Step 3: Create an Integrated Improvement Process 229
Conclusion 235
Index 237
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Foreword
Have you ever thought, after reading something, “That makes so
much sense! Why didn’t I think of this before?” In my experi-
ence, this is the hallmark of almost every path-breaking book. Its au-
thor somehow is able to examine in a fresh or different light, a
problem that has vexed us for a very long time,exposing the flaws in
how we previously had framed the problem so that the solution be-
comes clear.
This was my experience when I read an early draft of Brad Hall’s
book, The New Human Capital Strategy.Brad points out a number of
ironies in the way most of us manage our people that, once he has
pointed them out, seem at best nonsensical—just filled with contradic-
tions. A platitude of management is that people are every organization’s
most important asset, for example. And yet most organizations’
processes for building and cultivating those critically important assets
are not processes at all. They are programs, which are conceived
episodically, opportunistically, or reactively. Then, to compound the
problem, most of our organizations have no way to measure the results
ix