Building Competitive Advantage With Human Capital As The Core

The importance of talents to enterprises has reached unprecedented levels.

But for most enterprises, what they lack is not talent, but suitable for the development of talents.

To build such a space successfully, human capital should be the core of design philosophy, structure, strategy and practice.

Over the past decades, a large number of commercial books, articles, speeches, seminars, etc. have emphasized the importance of human capital people and their competitive advantages.

Recently, executives were launched once.

Another survey of thousands of CEOs around the world shows that 72% of respondents are more concerned about how to acquire key skills.

Obviously, talent has become the most advanced and core issue in the field of management.

Enterprises in all walks of life have found that talent is the first source of competitive advantage.

But it is far from enough to talk about the importance of talents or to put personnel matters on the ideological level.

What we need to do is to design and manage an organization from the board of directors to the first line of work to attract talents, retain talents and support talents to achieve excellent performance.

I call such an organization an organization based on human capital.

Today, the vast majority of organizations are still unable to get rid of bureaucratic and hierarchical management models that have been formed over the past decades.

In such an organization, you will often hear the importance of management personnel at all levels, but they never see the implementation of specific measures.

As my favorite cartoon, Bert, has repeatedly claimed, "for many years, I have been saying that employees are our most important asset" Dilbert.

And it turns out that I was wrong. Money is our most important asset. The importance of employees is only ninth.

When asked what was in the eighth place, the boss replied, "carbon paper."

Of course, bureaucratic and hierarchical management models can still run enterprises, but there are also some sad stories about the fall, death and even disappearance of large and brilliant enterprises.

Westinghouse was once shoulder to shoulder with GE.

Arthur Anderson has been one of the largest public accounting firms in the world before the Enron scandal.

Bao Li Lai used to be a cutting-edge image technology company.

Computing equipment company was the second largest company in the field of computers after IBM.

The demise of these enterprises has made us more and more aware that the source of competitive advantage in many industries has shifted from efficient execution and reliable operation process to innovation and pformation capability.

For most organizations, the best way to deal with this challenge is to set up human capital as the core organization and make every effort to make talents the most important source of competition.

So, the first thing we have to face is "what is talent?"

The answer given by many people is "

However, knowing "talent is important" is one thing. How to make talents become the source of competitive advantage is another matter. It requires attracting and retaining the right talents, and effectively organizing and managing talents.

In today's society, acquiring the right talents has become complex and challenging.

Take America, the most economically developed country as an example.

Statistics show that the American education system can not satisfy the anticipated demand of the talented and well-educated employees, and the labor force supply outside the United States is increasing.

But as long as enough resources are invested, most organizations can still do that.

In fact, more often than not, we are faced with the fact that organizations are talented enough to manage and support them properly.

Therefore, the challenge of the organization evolves into how to build the organizational structure of finding the needed talents, cultivating talents, stimulating talents and retaining talents.

Organizational change

In fact, the newly created enterprises, especially those built from scratch, can implement the management mode with human capital as the core from the beginning, and build management systems and management practices that match the enterprises.

But while most managers know that talent is the key to the efficient operation of an organization, "people are our most important capital" is still mostly oral.

To a large extent, the problem lies in the gap between "cognition" and "practice".

For those old-fashioned enterprises who have been in the bureaucratic mode, it is much more difficult to build human resources as the core organization.

Because in the past, human resources were not an important source of competitive advantage, bureaucratic management mode is the best management mode.

However, under the background of rapid change, the emphasis on implementing and following the best practices of history management mode will almost always lead to weakening the competitive advantage of the organization.

The reason why such organizations adopt outdated practice is precisely because it lacks the ability to innovate and pform.

Ultimately, it will not attract and properly manage talented people, resulting in a gradual decline in performance.

Under such circumstances, some organizations choose to acquire an existing talent with a reasonable organization.

But even so, it is still not enough to improve the competitiveness of the organization.

More often, the acquirer will fall into the management mode of the acquirer and eventually lose the talent and ability that represents the value of the acquirer.

We might as well think in this way, that is, to compare the difference between "becoming better" and "becoming different".

For many enterprises, especially those knowledge-based enterprises or technology-based enterprises, "getting better" simply means that they are not good enough.

Therefore, it is important to pay attention to process improvement or cost reduction.

However, if such concerns turn into the main concerns of organizations, long-term failure will lead to the failure of the organization.

What the organization really needs to pay attention to is how to become different from the competitors on the basis of good enough in the past. This is the fertile ground for the new competitive advantage.

Only by innovation and change can an organization become different.

This requires a high degree of emphasis on the continuous learning and collection of new knowledge through internal and external processes.

At the same time, it is also necessary for the organization to fully understand that any competitive advantage based on new products and new strategies is relatively short-lived. They are easy to be duplicated, and the accumulation of knowledge and innovation means the rapid introduction of better products and services.

Therefore, the focus of enterprises' attention should be on how to build an organization that can continuously innovate and change, instead of simply pursuing the launch of a new product and some new services.

Once the organization has the ability of innovation and change management, it has its own competitive advantage and constitutes a barrier that other enterprises can hardly overcome.

In fact, the success of an organization is not only the accumulation of financial capital, the purchase of new equipment, or the recruitment of top talents, but also involves deeper, more complex and more difficult tasks: developing the internal system, attracting and retaining the right talents, and organizing and managing talents with the guidance of continuous innovation and pformation mode.

In other words, to successfully build such an organization requires human capital as the core of design philosophy, organizational structure, organizational strategy and practice.

Core of talents

What is human capital as the core organization?

This is an integration of reporting mechanism, salary system, organization structure and information system, and it concentrates on all strength to build an organism that attracts talents and motivates talents to cooperate effectively.

Since talent is the key to organizational development, the implementation of enterprise strategy should also focus on talents.

The organization with human capital as the core should not only adopt a specific enterprise strategy, but also tailor the appropriate human capital management plan accordingly.

At the same time, enterprises must pay attention to and ensure employees understand business strategy and support enterprise strategy.

Subsequently, organizations with human capital as the core should try their best to attract, retain and cultivate suitable talents.

They set up a strong employer brand and aim at the talents they need.

They carefully assess, cultivate and recruit talents with the necessary skills.

In order to ensure the correct management of talents, the organization also needs to set up a precise evaluation system, evaluate the current situation of enterprise talents, and promote decision-making on talent development and allocation.

Take BMW as an example.

In 2005, BMW opened the newest production base in Leipzig, Germany, which is quite different from traditional automobile factories.

From the date of creation, the principle of staff recruitment in new factories is always emphasized and adhered to high quality manufacturing workers.

In order to set up and maintain a vibrant automobile factory in such a complex manufacturing mode, BMW has adopted a rigorous approach different from the industry to screen employees.

Specifically, job applicants' ability to survive in team environment and teamwork are the first steps in screening.

In addition, the applicant's ability to learn and solve problems is the second step of screening.

After a rigorous test, those who are unable to cooperate with the team will be eliminated and the rest will be given the opportunity to interview.

Finally, the company also provides employees with unprecedented and excellent job security.

These are the reasons why many Germans regard BMW's job as the ultimate career goal.

BMW's human resources department receives more than 20 thousand applications annually.

Managers should act in a rigorous and strategic manner when making talent decisions.

Their adoption and embody of "appropriate" leadership style will help enhance the brand position of the organization as an ideal employer.

At the same time, managers should be happy and able to share the decision-making process with the internal staff of the organization instead of indulging in the struggle for power and profits.

If the design is reasonable and managed properly, the process of sharing decisions will enter an effective benign cycle.

Because each member in the organization has enough information, knowledge and power, the organization performance is excellent.

Because of the excellent performance, individuals in the organization get more rewards, making the organization a more attractive workplace.

For decades, Harley motor company has always been a model of sharing decisions in manufacturing enterprises that have joined trade unions.

In the retail industry, totality food company (the largest chain health food supermarket in the US) has grown rapidly over the past ten years and has successfully introduced a shared decision-making model.

Procter & Gamble, a global consumer goods giant, first introduced the model to its manufacturing plant in 1960s, and applied many principles of sharing decision models to the entire company.

I believe that unless more and more organizations adopt human capital as the core management mode, the huge gap between the level of talent utilization and the degree of utilization should be further expanded.

The reason is simple: competitive advantage will increasingly depend on the performance achieved by organizations in the core of human capital.