This week in HR, I’m thinking about winning and what it takes for businesses to establish sustainable competitive market advantage. I’m thinking about how HR practices can advance or inhibit long-term success. At a recent conference where business owners from all over North America gathered to learn and network, I presented on the topic of maximizing talent management strategies to enhance business performance. My talk’s purpose was to help business owners conceptualize the function of HR as something bigger than compliance, beyond the common no-to-everything mindset to be a strategic pillar of business enablement. Why? Because realizing the full potential of your workforce is almost entirely a result of HR strategy, not an accident.
I like to define HR, strategy, Talent Management, engagement, and capabilities by the book—literally, my favorite textbook from business school, Crafting & Executing Strategy: The Quest for Competitive Advantage.
- HR, Human Resources a productive input or competitive asset (people) that is controlled by the firm: The education, experience, knowledge, and talent of the workforce, cumulative learning, and tacit knowledge of employees; the intellectual capital and know-how of specialized teams and work groups; the knowledge of key personnel concerning important business functions; the creativity and innovativeness of certain personnel. (pp. 88-89)
- Strategy, the set of actions that [a company’s] managers take to outperform the company’s competitors and achieve superior profitability, lasting success that supports growth and secures the company’s future over a long term. (pp. 3-4)
- Talent Management, the practices an organization deploys to source, attract, select, train, develop, promote, and move employees through the organization. How companies drive performance at the individual level (performance management, motivating, and keeping happy employees). (McKinsey & Company)
- Engagement, employee engagement is a human resources (HR) concept that describes the level of enthusiasm and dedication a worker feels toward their job, employee engagement is the connection between the employee and the organization.
- Capabilities, the capacity of a firm to perform some internal activity competently; Capabilities are what a business does that differentiate it from others in the market. (p. 88)
Consider this statement: The opportunity costs associated with an unleveraged, disengaged workforce are almost beyond calculation.
Is this true? First, it’s hard to measure engagement… based on the definition above, you could infer that engagement is entirely esoteric. If measuring anything hinges on numbers and not concepts, such statements are not just flawed, but useless. So, we measure engagement in terms of business KPIs or Key Performance Indicators – and this is part inference, but nonetheless reliable. Let me put this statement another way: Disenchanted, unhappy, and demoralized workers do not deliver good customer service with a smile, they do not think innovatively about process and capabilities, they do not care about the organization’s position in the market among competitors; thus, business results suffer proportionally… business is down, customer service stinks, attendance and punctuality are ludicrous, and productivity & quality lag.
Engagement matters because achieving the business outcomes you want hinges on how engaged your employees are. Real numbers show the significance of an engaged workforce, meaning the more engaged your employees are, the more profitable your business, the less engaged, the worse off your business will be.
Winning businesses want their employees to thrive and achieve their dreams. This is where your Talent Management / HR tactics, structure, and strategies are really key; this is where your mindset shifts from HR as just compliance and transaction to strategic business tool and driver. This mindset juncture is where activity to get things done and strategic activity to achieve wanted business outcomes collide. This is where you start reimagining programming like Performance Management as a tool to reinforce your values and realign activities and capabilities that help you differentiate your offerings in the market. This is where, you codify all the capabilities you must do today and years ahead to achieve your vision and to pull ahead of the pack—by recruiting with the intent to fill specific gaps or workforce developing to advance the organization.
If engagement is a product of, or at least directly impacted by strategic management tactics, it behooves business leaders and HR managers to put thought and effort into planning these tactics. More than behooves, it seems like anything less than operating with intention presents an existential threat for the organization. But planning takes time, strategic planning takes patience, training, and practice.
Connect the dots between your vision for your business and Talent Management tactics with the help of an expert. If you’ve made it through my blog by now, you might think it’s worth a conversation with someone who has studied strategy extensively to get a glimpse of how your vision could be conceptualized into capabilities, activities, principles, and competencies (skills). An expert can help you kickstart your journey toward increased employee engagement, improved business results, and sustainable competitive advantage.
Second, you could start dreaming and documenting goals. Think in real terms like, I want to increase my market share (in GNO or Southern Alabama), all my competitors are doing it this way and have more success in that area. What am I missing? You will look at your workforce and see customer service or technical expertise deficiencies, you might even see that your workers are disconnected and don’t seem to “get it.” In these cases, your tactics need to be specialized training, more meaningful performance management and more frequent manager 1-1’s, and some team-building activities and MVV communication… take time remind your employees of the “why” behind even the most menial tasks.
Third, you could keep operating as you are, and that’s a risk. You might say, “My culture is great!” And that IS great. But it is also yours to lose. Protect and guard your culture, your employee engagement as though you have an enemy at the gates. You literally do, your competitors will envy your best assets and if they’re smart, they’ll try to steal your key employees. People want to work for leaders who have vision, who take culture seriously and intentionally; accidental culture (one that derives from accident and random problem solving) repels the most talented workers.
Constantly assess your position, your decisions, and your tactics for competitiveness and sustainability, or else…
We love to work with businesses at empact hr who want to focus on growing their business but need help connecting dots between their goals and dreams and their employee’s activities and management tactics. There’s always opportunity for synergy, when you love and want the best for your people and business.
PHILIP CARRILLO, MBA, SHRM-SCP
Director, HR Services
Philip began his 12-year Human Resource career in HR Project Management and Recruiting in the legal tech sector, working for startups that were listed among Forbes Fastest Growing Companies. Philip has managed human capital operations in almost all 50 states and in parts of Europe. His experience ranges from compliance to leadership coaching. After achieving his MBA from Tulane University in 2019, Philip transitioned from in-house Director to consulting, where he focuses on helping leaders understand, document, and improve productivity and visibility through Performance Management, Mission Vision and Values integration, and Professional Development. Compliance remains a cornerstone of his strategic assistance to companies that want to scale carefully and smartly.
Philip believes that every employer can methodically create an attractive and inspiring Employer Brand and Human Capital strategy. “Every challenge can become the building block of a breakthrough opportunity through a dynamic HR strategy.”