Sunday, March 7, 2010

Developing Organizational Capabilities - The McKinsey Global Survey...Same Old Song...

McKinsey is a quality company that does some great research in the way of human capital and talent management. You may remember they were the first to point to a War for Talent in 2001.

Their most recent global survey focuses on Developing Organizational Capabilities and the role that training plays in this. There are a number of key points it makes and implications to strategic human capital capabilities needed to execute business or mission strategy.

“Building organizational capabilities, such as leadership development or lean operations, is a top priority for most companies. However, many of them have not yet figured out how to do so effectively…”

This opening statement in McKinsey’s Global Survey: Building Organizational Capabilities speaks volumes and is absolutely horrible news if you are an HR professional or Human Capital Developer. On one hand the study says building organizational capabilities to enhance competitive advantage is a top priority to leadership. That is great news that people realize it is a priority. However, the second part of the opening statement says to me we don’t know what we are doing. What kind of confidence building and message does that say about our profession to a CEO, C-Suite, business unit or potential customer? And let’s be clear…the people you and I work for will read the report because they trust McKinsey.

In the report there are a number of other statements that drive me to one single conclusion…we have lost our way. While the report is explicit in a number of areas, what it implies is that we don’t know what organizational human capital capabilities need development and even if we knew…we are not good at developing the organizational human capital capabilities required to create a competitive advantage or how to measure we have developed the right organizational human capital capabilities.

As I have discussed in earlier blog posts, there are a lot of great organizations with great CHROs, Chief Talent Officers and Chief Learning Officers that get it. They are successful and extremely effective in developing organizational human capital capabilities that support their organization’s continued agility and adaptability leading to competitive advantage. These are the same people that graciously give their time and talk to us at conferences and symposiums about what they did and how they did it. This hasn’t been happening recently…these have been happening assuredly for the last 10 years, but longer. And yet here we are with another study that paints us as inept at doing our job. We can’t lament that we have no “seat at the table” or we want to become a “strategic business partner.” That time is past because in the eyes of the customer, we don’t hold up our end of the bargain. If that is not the case and just our customer’s perception…then all the worse because perceptions drive decision making in a vacuum when there is no data or metrics. So ultimately we are responsible or our own plight and have no one to blame but ourselves.

This blog post from Kevin Wheeler has a lot of valuable points that are still quite valid today...Chief Talent Officer 2020...We would do good to heed his advice...

My perspective is a simple one…we hold, and have held for some time, the power to change ourselves, how our profession conducts business and the perception that is held about it. The only thing stopping us is…well…us. To be successful, we ourselves need to understand how to think strategically, be as agile and adaptable as our customers, execute flawlessly, and measure.

1 comment:

  1. Great article. It resonates with a number of the challenges that we've faced to select, train, and manage workforce talent.

    I think that one of the challenges that we face is that even top-level researchers cannot tell us with 100% certainty which factors load into seemingly simple concepts such as motivation. Let alone which factors moderate or mediate.

    We have empirical, quantitative research-based fields for organizational development (such as I/O psychology), but these field are still incredibly young.

    If you ask an engineer to design a bridge, they will be able to design and model it in CAD programs. Then, they can tell you what loads the bridge can sustain and what types of winds/earthquakes it can withstand.

    However, if you create a selection tool (or a selection system), you start with a different goal. You're happy to have a tool that demonstrably provides a statistically better-than-random chance at identifying someone suited for the job and the organization.

    That's a measurable ROI, but no organization will ever really have a selections system that produces only 3.4 mistakes per 1 million hiring decisions.

    So, fields such as engineering strive for a virtually 100% success within a set of parameters, while most often HR practitioners have tools that cannot ever match that degree of precision.

    That's not necessarily the fault of the HR leadership or the academic researchers who study org behaviors. In my opinion, it occurs because the field is much more in its infancy than other well-established fields.

    That's a tough message to communicate, especially because most internal customers don't want to know about the theories behind organizational behaviors. They just want results.

    1) We need to explain the capabilities of the tools we use and the state-of-the-art measures within our field.

    2) Seek knowledge relentlessly and weave it back into the organization.