Boosting human capabilities

Posted on January 17, 2005 
Filed Under Julian, The Edge

By Lim Beng Choon

I purchased a new car  in which I discovered a small part of the steering wheel missing.  After waiting a few months for the part to arrive,  I made an appointment with the service center and was told it would take “only 15 minutes” to fix the problem.

Yet, I was made to wait for 45 minutes. Apparently, the service engineer who ordered the part was on leave and the part couldn’t be located. After they finally found it, the fixing took another 30 minutes.

How often have we encountered situations where the service levels are only as good as the personnel assisting you at that moment? Service levels drop when individuals leave or are taken ill  New employees end up learning the hard way from tough customers.

It is therefore timely that our Prime Minister endorses the virtues of lifelong learning to compete with organisations globally.  The responsibility for continuous learning however, needs to be shared between both an enterprise and its employees, and not just the individuals investing in themselves.

Studying workforce needs
In Accenture’s High-Performance Workforce Study, we surveyed 244 executives in six countries spanning 15 industry segments and conducted in-depth interviews with professionals in 20 other companies.

Our findings suggest many were not convinced they have the necessary skills and talent in place to excel in an improving economy. Just 20 percent of the executives said that three-quarters or more of their employees understood the company’s strategic goals, while 41 percent said fewer than half have such an understanding.

The study highlights the challenges ahead for leaders of organisations who want to raise the bar in service levels.

To make the leap to into a high-performance business, we pinpointed three contributing factors- measurement, technology and outsourcing.  We found performance levels rose as the company:

Human capital strategy
Successful companies understand their HR function can never be only about filling vacant positions. It must be closely aligned with business strategy.

Take the experience of a well-known cell phone manufacturer  which I’ll call CellTech. In the mid-1990s, CellTech was at the top of its game in producing analogue cellphones. Later in the decade, new players flooded the market and CellTech’s products became ommodities. The company sought to stem its shrinking margins by diving into the digital cellphone arena.

But CellTech failed to get its workforce up to speed to meet the new demand.

The company neither acquired nor developed the skills that would enable it to create and produce the new technology phones in time. CellTech lost significant market share and millions in potential revenues.

Is this the responsibility of HR Management?  HR is often bogged down with administration and struggles to figure out how to build a learning organisation.  They struggle to justify further spending.  On the other hand, what else could be more important for HR than this?

The key is to be able to tie measurable levels of human capital capabilities to business results. In the past this was difficult to gauge but the situation is now changing with a number of measurement tools and frameworks emerging.  HR management can get a better handle on the impact of people-related investments on the business.

More effective use of IT
High-performance companies ensure that employees are always skilled, informed, satisfied and engaged in the process. They are quick to address people issues.

In our study, we found a statistically significant relationship between human capital infrastructure processes and financial results. Having the right infrastructure and systems to support core HR processes (including training or learning) consistently and effectively across the business is an essential capability. Yet, for many organisations, it is still something of an aspiration.

Eskom, a vertically integrated South African utility, is using our Human Capital Development Framework to assist in its overall planning for a possible industry restructuring. As Eskom evolves to an environment characterised by competition and expansion, it will require new skill sets.

Although some skill sets will be acquired externally, Eskom also plans to develop its existing workforce skills. This strategy will require robust learning and knowledge management processes to succeed.

High-performance companies boast of effective IT that support basic HR processes, including learning and knowledge acquisition. With the basics supported by IT,  organisations can develop a systematic approach to identify and turn individuals into team-players and leaders at all levels.

Outsourcing HR and training activities
HR managers should be focused on maximising people-related investments. Companies that encourage employees to continue to deepen their knowledge, enjoy greater financial success.

Today’s hiring practices must be based on a candidate’s potential to grow. New hires must be set on a path of continuous education, with increasing responsibility and enhanced skills.

When someone moves up the organisation, a succession order is in place to groom his replacement.  If someone leaves, a knowledge base serves to quickly bring the new staff up the speed. Individual capability must be translated into a company-wide capability so that there is a consistent level of performance across the board.

In a growing economy, scarcity of talent is a perennial battle for companies seeking leverage over their competition.

More companies are recognising the increases in effectiveness and efficiency by consolidating HR and learning operations, whether in the form of internal shared services function or outsourced at a third-party provider’s facility. For example, British Telecom transformed its in-house HR capability from 14,500 people to fewer than 600 HR Business Partners with HR transactional needs now provided by Accenture HR Services.

Putting it together
People like to be valued for what they do, and  rewarded for what they do well. They do not like to be treated as a commodity.

High-performance companies have a work environment that is consistently providing opportunities to grow, and is integrated with a learning function. Their employees are more likely to stay. This ensures consistent service levels, less churn and stronger customer loyalty.

Today, advocates of people programmes no longer need to base their budgeting requests on faith. They can build a business case that empirically justifies human capital investments to all relevant stakeholders. They can also identify the processes and programmes that matter most to the bottom line, enabling them to chart their own unique course toward high performance.

(Editorial services by Trinetizen Media for Accenture)
Next: Winning the battle for customers

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