While many companies embrace a detailed product market strategy, they neglect to do the same for a labor market strategy, Freek Vermeulen, an associate professor of Strategy and Entrepreneurship at the London Business School, writes for Forbes.
“The first frontier for HR is to develop talent management strategies that are just as sophisticated and precise as their companies’ product-market strategies, in terms of their value proposition, employee profile and internal organisation,” Vermeulen notes. “If done well, in some cases, such a sophisticated HR strategy might come to form the very heart of a company’s entire business model.”
And while many HR teams are focused on individuals for talent management--in relation to recruiting, training and retaining--that approach will not necessarily separate a company from its competitors. “…Genuine competitive advantage comes from superior organisations; not from superior people,” Vermeulen writes. “For an HR strategy to deliver competitive advantage; it will need to shift from hiring and developing individuals to the management and creation of inter-personal processes.”
Herb Kelleher, Southwest Airlines’ founder, understood that his company did not need to woo recruits who graduated in the top of their class. “He grasped that in order to execute their low-cost strategy better than anyone else, the company did not need better people, but better internal processes, which fostered cooperation, informal coordination and a strong corporate culture among employees,” Vermeulen notes.