Strategic Capabilities: Shaping Human Resource …

1 Strategic CapabilitiesShaping Human Resource Managementwithin the Knowledge-Driven EnterprisebyHubert Saint-OngeWith the emergence of the knowledge era, it has become widely recognized that the intangible assets of anenterprise will be key to both its ability to create competitive advantage, and to grow at an accelerated pace. Asa result, more and more organizations are showing increased attention to the creation of value throughleveraging would expect that the new set of questions surrounding these efforts would place the Human Resources(HR) function at the forefront of the discussion. Yet, to the contrary, Human Resources seems to be losingground in a majority of organizations. In most cases, Human Resources appears to be playing a secondary roleat a time when this function should be more in demand and more valued.

2 The HR function continues to becriticized for not moving with the times. The forces of the market have radically altered the employmentcontract , yet our people management practices do not seem to have followed suit. In the face of all this, theHuman Resource function is often perceived as slow to adapt to the new realities of the market is at the root of this problem? The point of view put forward in this paper is that the classic definition oftheHR mandate renders it impossible to meet the expectations now demanded of this function. Very simply,the traditional structures we inherited from the industrial era are not appropriate for the business challenges wecurrently face. In this context, HR must evolve to successfully take on a key role in formulating andimplementing the organization s strategy for generating organizations try to meet the new challenges they encounter in the marketplace, a great variety of initiativeshave been undertaken.

3 These initiatives include the formation of Leadership and Innovation Development centres, Balanced Performance Measurement projects, as well as the creation of new roles including ChiefLearning Officers and Chief Knowledge Officers. However, it is a constant matter of debate as to whether thesemandates should be placed within or outside the Human Resources mandate. More often than not, the veryinitiatives that would contribute to its renewal are structured outsideofHR to try and eliminate the fear ofreducing the credibility or legitimacy of the of those who ve had the opportunity to lead such initiatives, either within or outside of HR, haveexperienced first hand the difficulties involved in realizing their objectives. These initiatives are oftensuperimposed on an organizational blueprint that has its origin in the industrial era and is now obsolete.

4 Theresulting clash of assumptions on how organizations should function often leads to the premature dismantlingof these initiatives. This emphasizes the need to clearly articulate the assumptions upon which a newfoundational blueprint must be developed. Human Resource management has a key role to play in leveragingthe knowledge of the organization. In order for this to happen, the mandate and configuration of HumanResources must be significantly key Strategic issues that now face organizations revolve around escaping their limits, applying theirknowledge in different ways, and building an environment where learning is the norm. In this context, Strategic capabilities : Shaping Human Resource Management within the Knowledge-Driven (1 of 15) [2/17/2000 10:31:55 AM]knowledge is a critical commodity, and the Knowledge Strategy of the organization must be at the heart of thenew mandate for Human Resource changes that must take place are rather significant and will need careful experimentation beforeorganizations can move forward with confidence.

5 The intent of this paper is to describe how HR wastransformed to become Strategic capabilities at Clarica. Based on the principle that capabilities are mosteffectively developed through the learning that results from the exchange of knowledge, Human Resourcemanagement was redefined to include a comprehensive Knowledge Strategy. In addition to enhancing theorganization s agility, capability and coherence, this new approach was designed as the vehicle for changinghow work gets done, and how value is Business Rationale for Accelerating CapabilityGenerationTheknowledge era is transforming the rules of business. Most organizational patterns currently in place comefrom the industrial era, when financial capital was scarce. In the industrial era, it was generally assumed thatthe key to the Strategic development of the firm was the allocation of scarce financial capital to the businessactivities with the highest yield.

6 In the business context of the knowledge era, the globalization of capital andits greater availability through a variety of channels, has meant that the lack of funds is no longer a bottleneckto growth. There is now, in most businesses, a surfeit of financial capital. There are, however, too fewopportunities available to apply the capital available, at the yield levels expected by investors. The newbottleneck is the capabilities required to create new opportunities to which this financial capital can be a result, capabilities must now move to the centre of the organization s Strategic planning framework. Theobjectives, responses, and business models of the enterprise can best be calibrated on the basis of thecapabilities of the organization. Market demands and expectations keep changing at a relentless pace.

7 Thepace at which an organization can grow is, in large part, determined by the speed at which it can generate andreconfigure its capabilities in response to challenges encountered in that changing organization that fails to respond by putting in place sufficient capabilities to respond effectively will finditself gradually losing ground. This inability to generate the required capabilities will contribute to building a"competitive advantage deficit" and ultimately put its very existence into rapid shift of customer preferences and market trends imposes aneed for the acquisition of capabilities at an equally accelerated competitor aims to shape the market to its strengths in order toachieve a pre-eminent position. With the increasingly intense rivalryfound in the market place, these rapid changes are now a major factor incontinued success.

8 For example, the late introduction of a new offeringby a company may mean the product or service enters the marketplacewhen much of the profitability margin has been lost. Therefore, theaccelerated development of capability is a pre-condition to lead andshape the market place in line with organizational all markets, customers are developing a greater understanding of howStrategic capabilities : Shaping Human Resource Management within the Knowledge-Driven (2 of 15) [2/17/2000 10:31:55 AM]they want their needs and aspirations met. In response, solutions andservices available in the marketplace are becoming increasinglycomplex. One of the key limitations that organizations encounter in thisprocess, is the ability to generate new solutions and introduce them tothe market at a pace that both meets the quickly evolving needs ofcustomersand outdistances the offerings of competitors.

9 This placesunprecedented demands on the exchange of knowledge inside theorganization, with partners involved in the value chain, and withcustomers. The pace of learning becomes the determining factor in theintroduction of new solutions to the increasing complexity of the solutions offered to them, it is not entirely surprising that customers infocus groups express a high level of frustration in understanding what is available. There is mounting evidencethat more and more customers are demanding that solution providers interact with them in a manner that givesthem clear information, to enable the customer to be self-reliant. Therefore, successfully dealing withcustomers means we must, more than ever before, have the necessary knowledge at our fingertips at all of those interacting with the customer must constantly be renewed and enhanced to meetever-increasing customer requirements.

10 Traditional training cannot begin to cope with the resulting learningneeds of people relating directly to the key to the performance and growth of today s enterprises resides inthecapabilities of the organization, which in turn depend on thecapabilities of its people. The industrial era was a time when peoplewere easily recruited and retained to fill an established, unvarying set ofroles. The knowledge era brings with it a much more competitivemarketplace for talent. As they experience unprecedented employmentvolatility around them, people are placing a great deal of value onworking in an environment where they can actively develop a way, customers are also putting a high value on learning andacquiringcapability, with regards to solutions that are important to therealization of their aspirations.