TALENTSHIP and SUSTAINABILITY: A NEW HR PARADIGM – Is HR ready?

(This  concept  and  framework, offered  by Losey,  Mike,  Meisinger ,  Sue  &  Ulrich,  Dave  (2005).  The  Future  of  Human  Resource  Management.  Hoboken, NJ: John  Wiley  &  Sons,  Inc.,  was  presented in  the  6th  HR  Summit held at  Crowne  Plaza  Hotel  Ballroom,  2  August  2013  by  Dr. Rosalina  Fuentes).

The  current  HR  paradigm  in  dealing  and  managing  its  talents  has  been  premised  on  this  orientation:

• The  baby  boomer  generation  provided  workers  for  jobs  after  the  war  years.
• The  baby  boomer  years  spanned  a  long  period.

Over  the  years,  this  HR  paradigm  has  been  subjected  to  great  scrutiny because  its  dominant  effect  was  viewed  as dominantly  contributing  to  stagnation  and  slow  growth  of  the  economy.  This paradigm  hence  needs  to  shape  up  because  the  emerging organizational concerns  required  HR  to be  more  responsive,  meaning,  to  address  the  rapid  expansion  of  the  workforce  and  to  be  concrete  in  its  quantifiable  contribution  to  the  organization’s  bottomline.  This  thinking  would  push  HR  to  meet  the  call  for  change,  to  claim  a  more  value-adding  position  in  the  organization,  from  providing  a  mere  support  role  to  becoming  a  strategic  partner,  that  is,  to  be  in  line-authority  participating  in  key  organizational  decision-making.  This  presentation  is  premised  in  the  hope  of  ‘easing  in ‘  a  new  way  of  thinking  about  HR,  or  if  you  have  already  moved  into  this way  of  thinking,   ‘stimulate’  you  to stretch  the  view  and  face  the  challenges  of  two  key  issues,  namely,  talentship  and  sustainability.

Two paradigm shifts are needed to address talents in the organization.  The first paradigm shift  is  Talentship,  meaning,   HR and business leaders  must  broaden their traditional focus beyond just HR services, toward a “decision science” (Boudreau and Ramstad).  Talentship  has  many implications for HR strategy, organizational design, service delivery and competencies.  One implication is that “talent segmentation”  is  as vital as “customer segmentation” (Boudreau and Ramstad).  Part of talent segmentation is identifying “pivotal talent pools” – where human capital makes the biggest difference to strategic success.  The  second  paradigm  shift   is that HR and business leaders increasingly define organizational effectiveness beyond traditional financial and shareholder outcomes to encompass  Sustainability, meaning,   achieving  success today without compromising the needs of the future.

Is HR Ready?

The traditional business paradigm strives to achieve financial returns – or maximize shareholder value – through competition.  Human resource management (HRM) responds with “strategic” logic showing HR’s contribution, also defined in financial terms.  Yet, even as the HRM profession works diligently to understand the business in traditional financial terms, the very definition of organization success is changing.  The shareholder value paradigm is challenged by the argument that organizations should strive for an expanded prize – sustainability. 

The World Commission on Environment and Development  defines  Sustainability as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”  (World Commission on Environment and Development, 1987).

Sustainability is just emerging,  but  it includes values, governance, transparency and ethics as well as goals such as diversity, social responsibility, supporting human and employee rights, protecting the environment and contributing to the community. 

Sustainability includes the bottom line, because financial viability is necessary for organization survival, but it defines success beyond financial results.  For example,   the working conditions of employers and their suppliers have become  a de facto standard for many firms because sweatshop scandals have hurt a number of famous  brands. Sustainability is not a fringe issue.  Corporate heavyweights like Shell, BP and DuPont as well as the United Nations (UN) and International Labor Organization (ILO) are all embracing sustainability.  It is particularly relevant to mission-driven organizations such as governments, charities and universities.  Sustainability rarely appears in strategic HR plans and its implications for strategic HRM have received less attention.  Yet, as organizations increasingly embrace sustainability, so must HR.

A New Paradigm for Strategic HR:  Talentship  as item for ‘Decision-making’

HR has struggled to define what it means to be strategic.  The answer lies not just in benchmarking HR organizations, but in the evolution of more strategic functions such as finance and marketing (Boudreau and Ramstad, 1997 &  2003).  The marketing decision- making  enhances  decisions about customers, and  the  finance decision-making enhances decisions about money, so a talent decision-making  should enhance decisions about  talent, both within and outside the HR function. The  finance  decision-making  provides well-articulated logic, models, and methods that use accounting data to improve decisions about deploying financial assets.  The finance department doesn’t make most of these decisions – they are made by managers across the organization.  The finance decision-making is different from accounting, but accounting remains a critical professional practice.

Today’s  HR  is similar to accounting.  It is  and will remain  a critical and important professional practice.   Yet, we still lack a well-developed decision-making structure  for human capital or “talent.”  This is not surprising.  Modern accounting is 400 years old, but finance evolved around 1900 (Johnson and Kaplan,1991).  The professional practice of sales goes back to ancient times, but  the decision-making  of marketing emerged only in the twentieth century (Howard, 1957).

Yet a talent decision-making  mechanism  is vitally needed today  to include   structures, behaviors, capability, learning, collaboration, shared culture and so on.  Talentship  focuses on decisions that improve the stewardship of the hidden and apparent talents of employees.  A   talent decision-making  mechanism requires frameworks that show what factors are relevant to decisions about talent and how the talents must  be  combined.  HR investments affect “pivotal talent segments” that enhance the processes and resources that most  affect  sustainable  strategic  success.

Combining the New  Paradigms:  Talentship Plus Sustainability

In  sum,  this  discussion  is about  HR and sustainability along two dimensions:  first, whether the “prize” is primarily profits or sustainability and second, whether the HR paradigm reflects the traditional view  of service delivery or the new paradigm of a decision-making  mechanism.

How  a Talent Paradigm and  the  Organization Define the Strategic Talent Questions:

Each quadrant provides opportunities for  HR  contribution  with the most untapped area  at the top right - where  Talentship  is applied to sustainability.  In the upper-right quadrant, the impact question now becomes, “in which talent pools will HR interventions have the most impact on sustainability?”  The pivotal talent  pools for traditional financial goals vary with organizations’ strategies and competitive challenges, and it  is the same with sustainability.  Each organization must work through the impact elements to find the pivotal talent for sustainability.  Let us take this (theoretical) example  of Company  X   showing  how  Talentship  reveal strategic  financial and sustainability goals.

In  2000, Company  X  and three other large educational companies agreed to share technology, free of charge, with the  member  schools  of  the  Philippine  Educational  Association  to   improve  delivery  of  quality  education  in  the  public  sector  where  mediocre education  has  been  noted.  They would  reinvent their  teaching  and learning  philosophy,  make  curriculum  & learning  delivery  in  sync with  their  ‘new’ teaching  &  learning  rationale, goals  &  objectives,  re-design  school buildings  &  learning materials, strengthen technology laboratory, re-orient teacher  training  in  the  use  of  & partnering with   technology and other relevant aids  to  the  teachers  and  administrators to  raise  the  bar  of  learning  and  teaching within the reinvented  teaching  &  learning  philosophy.

A traditional strategic analysis reflecting only financial outcomes and competition would identify teaching & learning  philosophy,  curriculum  &  rationale, including  goals  &  objectives   and  teacher  &  administrative  know-how  as  strategic resources.  It would identify processes such as  transforming discoveries into  features that customers will pay for and applying them to quality delivery  of  instruction and  protection (creating legal or physical barriers) around intellectual property to keep competition at a disadvantage).

In the impact analysis of the traditional financially driven strategy, pivotal talent would include  administration, staff  &  faculty continuing  research  &  development  and   curriculum  designers’ intellectual property.  The key aligned  actions  for administration,  staff  and  faculty   would be to direct their continuing  research   and  development  toward  technology-aided  teaching  &  learning  and  processes  that   deliver  quality  education  and  equally  quality service  features.  For  curriculum  designers, aligned actions would be to  secure  recognition  &  accreditation  from  regulatory  bodies,  or other legal protection against competitive espionage and copying.

Where Next for HR and Sustainability?

The movement to seek sustainability, not just financial returns, is embryonic in the United States, but has significant momentum globally.  Decision makers, opinion leaders, voters and employees care about sustainability.  They want corporations to reduce the externalities that burden future generations.  Sustainability is not just good ethics.  Its  potentially  good long-term economics  places HR  in a position  of  great  important role.

Compliance and social accountability for HR programs are an important beginning.  However, organizations will achieve sustainability more effectively if they adopt a decision-making  mechanism  that help them better understand and articulate the connections between talent and sustainability.  The  decision-making  mechanism  can  provide  the  opportunity  for  alignment necessary to drive execution through effective decisions about human capital, within and beyond the HR function.