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The New Intellectual Communism

Posted by on Jul 10, 2012 in News | Comments Off

The New Intellectual Communism

The New Intellectual Communism

Management science has been around for some time, traditionally starting with the work of Fredrick Taylor, being brought to new heights by Peter Drucker, and popularized by Tom Peters. Strategy also has a long history, with Michael Porter probably being the doyenne, but Norton and Kaplan having brought in a new focus with their Balanced Scorecard. Human Sciences, or its precursor, Personnel Management, also has a long history, with Robert Owen probably being the first person to recognize the potential upside of treating people as people in his Scottish Mill during the first half of the 19th century.

If, however, the reader with a curious mind were to go deeper into the matter, it is very likely that he or she would quickly find Management and Strategy approaches far back in history, albeit often disguised within a military context. In all cases, the recognized doyennes of the various practices have concentrated on how to make work more effective, motivate greater efforts, and above all, move the organization to a position where it enhances its competitive advantage within the market. The emphasis has been on finding unique strengths, abilities and opportunities, and motivating our resources to capitalize on these, in order to lead the market.

During all this time, business has often played a significant lobby in ensuring governments provide a pro free market environment in which they can operate, and have avoided investing in countries where a “communist” or “socialist” environment is not conducive to modern business, thus influencing behaviours as a result.It is therefore inconceivable that business would ever support any business philosophy that could result in uncompetitive practices, or is it…

I want to put my neck out and say that many businesses today are prime supporters of the “new intellectual communism” in their rush to embrace two philosophies; Best Practice, and Benchmarking.

This has been particularly so in the areas of Human Management. At first glance this may seem justified as often management of the Human Resource is more of an art than a science, thus attracting people to adopt a good practice that has worked somewhere else (reducing the guess work).

It becomes incomprehensible though when we consider that human potential is considered to be the very thing that will give us a competitive edge in a market where technology can quickly be duplicated. Surely looking for Best Practice, or Benchmarking against others tend to make us all the same – and means that no one is going to stand out as champions within a world of mediocrity (my alternative word for best practice)

The prime purpose of strategy is to devise how our company is going to gain competitive edge in the market. Best Practice and Benchmarking are surely the opposite of strategy, and yet how often do we hear people quote a benchmark exercise as part of strategy – surely a contradiction in terms.

So why is Benchmarking and Best Practice so popular? May I suggest that it is because it is seen as safe. When it doesn’t work, we can bystep the blame by pointing out the effort we have gone to, to select a methodology with “proven success”. So, what should real leaders be doing?

There is a story about a young minister who goes out to prove his prowess at evangelism. He spends the entire day telling everyone that “Jesus is the answer”. He reports back to the senior minister that he has had very little success, and describes his activities. The senior minister kindly suggests to him that he rather spend his time getting people to ask the right questions before he tries to give them the answer.

In a management context, the right questions we need to ask are:

  • What do we need to do to be successful as a company?
  • What will give us the competitive edge over our competitors?
  • Where is the market going to, and how do we position our offering to take advantage of the future?

Once we have defined where we want our company to be, we are then in a position to look for the answers that will help us achieve our goals. Perhaps those answers do exist and can be fine tuned to suite our company, but perhaps we are going to need to be brave and risk doing something that will make us successful. A reward strategy should reward those actions that are going to lead to our company strategy succeeding. Any form of performance measurement should be aimed at measuring actions and behaviours that support our desired strategic direction. Training and mentoring should be aimed at ensuring the right skills and capacity exist Communications should continually be in support of desired direction. Change and Culture interventions need to be strategic end result focused. Horror of horrors, when we get the above right, we also need to be sure that each of the systems above are integrated. Too often I see situations where we provide training that grows one set of skills, performance measures that look at others, and reward that pays for achieving something completely different. Surely it is not that difficult to develop a single focused plan that drives all systems and interventions towards a single end goal? If we can, we are giving people an answer that makes sense, because it actually answers the questions that they have.

I often hear the complaint that Human Resource Managers are considered to be managing the Cinderella function of the company, and are never taken really seriously. This despite the fact that most companies at least give lip service to the importance of the “Human Difference” in achieving competitive edge. How can companies be so blind? Perhaps because we have never given them a bold solution that will make a real strategic difference, and all they are used to is us providing Best Practices that can be defended. If I want Best Practice I will buy a book. If I want strategic advantage I will hire a good manager.

Human Resources Executives taking their rightful place in ensuring successful strategically focused companies is long overdue. To allow low expectations to hold them back is unfair to them, but is doubly unfair to their companies. To break this cycle we need some bold actions that are going to show the rest of the executive team that Human Resources has arrived, and is ready to make its contribution to the future of the company, and that they understand what this future is going to look like.

Subversion of Language

Given that we have agreed that Human Resources Management (which is not limited to those managers in Human Resources) has to become more strategically focused, we need to be sure that we all understand the same thing by the word “strategic”.

At first glance this may seem an odd statement to make. Surely we all know what strategic means. The answer is, yes, we all have an understanding of what strategic means, unfortunately though, if thirty people who believe they understand the term all sit around the same table and discuss it, the chances are we will have thirty different ideas.

The philosopher Chuang Tzu lamented “The fish trap exists because of the fish; once you have the fish, you can forget the trap. The rabbit snare exists because of the rabbit; once you have the rabbit, you can forget the snare. Words exist because of meaning; once you have the meaning, you can forget the words. Where can I find a man who has forgotten words, so I can have a word with him.” Words used to describe levels of work, particularly if they have found their way into performance appraisal or job evaluation language, or possibly some or other competency dictionary, can take on a life and meaning of their own. The most obvious example is the term “average” which if applied to anyone in a performance appraisal is considered an automatic insult. (hence attempts to use a different term). It is very clear that the term average actually conveys a picture of sub standard to most people today.

Another word that has taken on its own meaning is, unfortunately, strategy. I have personally had to deal with a number of situations where fairly junior management levels have complained about the evaluations of their jobs because on reading the definitions applied to their role, they find that it has been described as having “strategic impact limited to a division or department”, rather than to a company. In today’s world, where everyone, including the person providing beverages for a department, goes off for an annual bos-beraad, anyone described as “operational” rather than “strategic” will take automatic umbrage. The most ridiculous example I have ever come across was on quality assuring a career progression prepared by a consultant (albeit junior) for a Tea Person. The Tea Person was described as adapting his/her strategy on an ongoing basis to ensure V.I.P. visitors were served their coffee and biscuits despite the fact that it might require the incumbent to serve the rest of the staff a few minutes later than usual.

Another ridiculous example was given to me by a very senior manager who described his personal driver as “driving strategically” in order to save his precious time. On questioning what this meant, I was told, amongst other questionable practices, this person made a value judgment regarding the risk of driving down the emergency lane in order to avoid traffic jams on the Highway.The above examples are given for one reason only – to show that the term strategy is not universally understood as the same thing. In relation to the statements above regarding the need for Human Resources professionals to become strategically focused, it becomes very important that we share, at least for the moment, a common understanding of what is meant by strategy.

A good Human Resource example of what is not meant by strategy is captured in a list of strategic objectives recently shown to me. One of the General Manager’s Strategic Objectives was to complete a benchmarking exercise, and implement the results by a given date. That is tantamount to saying something along the lines of “In order to meet our objective to differentiate ourselves in the market (the definition of strategy), we will adopt the best practices of our competitors”. Unfortunately, all too often, no more is expected of Human Resources, and many companies would be astounded if Human Resources suddenly tried implementing solutions based on a clear understanding of a company’s business goals.

If we accept that the key resources of any company consist of its products, its capital equipment used to produce the product, its capital, its intellectual capital, its customers, and its people, then we see that Human Resources should have a direct and key impact on at least two critical business resources, and contributory impacts in other areas. If we are to marshal all our resources towards a common goal, it appears that in this day and age, the contribution of an effective Human Resource function cannot be overlooked. In order to provide meaningful solutions though, Human Resource Professionals need to understand the structures required to support the company strategic goals, and the actions and behaviours that will support the achievement of the strategic plan. Only once this has been done will Human Resources really be able to make a difference to the company’s ability to meet its strategies. Only when this is achieved will consultants like myself be called in to assist Human Resources with issues around the executive incentive plan, rather than being requested to speak to the Financial Director or C.E.O.

It will be understood, given the criticality of success, that we cannot afford to allow the multitudinous, and often erroneous definitions of strategy that abound to distract our vision from where it should be. It is therefore a non negotiable that, in this context at least, we share a common definition and understanding of strategy.

For the sake of finding a common definition to clarify what focus is required in terms of this article, I offer the following definitions, which should place what I mean by strategy into perspective:

VISION:

The identifying of where we want our organisation to be in the future, and what we want the future to look like in the context of expected changes, and the strengths and abilities we will need to enhance, develop and even possibly discard in order to achieve this state.

MISSION:

Placing the Vision in context of our business, and describing the object, offering, and culture of our business in the envisioned future.

STRATEGY:

The plan to get from where we are, to where we need to be, (taking current needs into account (sustainability) to ensure we are still viable enough to have a future.) Strategy has two parts to it, being the identifying of the Value Drivers to ensure success in the one to three year term, and Vision Drivers to ensure success in the envisioned future – probably defined as the three to ten year term.

TACTICS:

The Plans, Critical Success Factors linked to Rolled-Out Strategic Objectives, Flight Plans, Research and Development, and Mechanisms and Projects we will use in order to ensure our Strategy is achieved. HOW TO DO IT (Policy and Processes), and DAY-TO-DAY MANAGEMENT AND PROCESS OPTIMISATION are probably the next two steps in the chain.

In this context, Strategic Human Resources is a critical TACTIC that is used to ensure the efforts of all our staff are marshaled towards achieving the actions, results, and values that will underpin the chances of the company achieving its strategy, and meeting its vision. Unless Human Resources is able to identify the critical contributions required of staff in terms of both actions and values, and to focus staff on these factors, provide motivation to staff to apply the effort required to achieve them, identify the capacity and capability required in the envisioned future, and reward staff appropriately when they achieve what is required, we are not going to be an effective partner in ensuring the strategic success of the company. We then need to accept the common and hopefully erroneous view of Human Resources which consigns us to be no more than product providers, where someone else without our particular skills has already made the tactical decisions on our behalf, and we do no more than source what could at best be called best fit solutions.

Such would be a waste of our abilities, and of little value to the company, who may start discussing whether Human Resources can be outsourced. Note that no company with an eye on success in the future will ever think of outsourcing something as critical to the achievement of the company strategy as proper strategic human resources. With our human resource and intellectual capital fast becoming one of the defining strategic advantages of a successful firm, it is time to step up and take our rightful place in the management team, and provide a strategically aligned and meaningful contribution to our companies.

By Keith Roxburgh