Securing human capital: why workforce availability is a strategic question

The answer requires a paradigm shift, comparable to the question of whether the earth is flat or round. In a systemic understanding, organisations are social systems and operationally closed. Their basic element is communication. The focus is not on subjects, objects or actions. Actions can, however, be reconstructed from communication events, and only through communication can the behaviour of different actors be coupled with each other.

Organisations are also autopoietic systems: they behave in a self-referential way and reproduce themselves. The idea that an organisation’s environment automatically provides the essential impulses for its development therefore does not hold. These environments include customers, suppliers, competitors, banks and the city, and also the employees. They provide the actions but are not part of the organisation itself.

If employees are environment, their availability is not guaranteed. They enter the company and leave it again. As actors in the system they ensure the necessary actions, and their competencies, character and attitudes influence the quality of these actions. A company that wants to secure its success in the long term must therefore clarify deliberately which human capital it needs and how it attracts, develops and retains it.

This happens through decisions, the most important communicative event in an organisation. Decisions concern people, processes, observation and evaluation grids, communication structures, routines and topics. Purpose programmes follow the pattern “in order to”, conditional programmes the pattern “if … then”. Personnel decisions are thus one of several levers and interact with the others.

The formula connects two sides. On the people side are competencies, potential, capability, attitude and character, principles and values, and personal disposition. On the operations side are processes, routines, programmes, observation and evaluation grids, and structures. Their interaction produces performance, which shows in results such as revenue, earnings, productivity, market share, innovation and customer satisfaction. The whole is influenced by the strategy and the Cultributes.

Read as a product, this means: neither side replaces the other. Securing human capital is therefore not purely an HR task but part of designing the organisation.

transformis distinguishes three kinds. Capabilities are organisational core capabilities: complex problem-solving patterns that have been learned over many years and decades and have proven themselves in products and services. They are independent of individuals, offer customers a benefit, can be transferred to different problem solutions and are usually not easy to copy.

Cultributes are enablers that support an organisation’s strategy implementation. The coined word combines the English words culture and tribute. The target competencies for managers can be derived from the necessary Cultributes. How Cultributes can be assessed is described in the article on the Cultribute analysis.

Competencies, finally, are the available knowledge, will, abilities and skills that enable a person to achieve a certain level of performance. The key message is: performance arises from competencies.

Strategic HR supports line managers in their people work and provides suitable systems. The document describes three successive levels for this, each with a guiding question.

The business strategy asks: what is our strategy? This includes the basic strategic direction, competitive advantages, success factors, strategic challenges and the company’s core capabilities.

The workforce strategy asks: which competencies are needed to implement the business strategy? What must employees understand, be able to do, want and contribute? Which functions and job groups are of strategic importance, and what workforce availability is there for them? Which ground rules must be observed to implement the strategy consistently?

The HR strategy asks: what can HR contribute to actively support strategy implementation? The answer is systems for recruiting, performance management, talent management, people development, incentives, succession planning and retention programmes. How job families and priorities can be derived from strategic processes is described in the article on HR strategy.

The requirements for job families and key players lead to role descriptions with competency requirements that also take future requirements into account. The approach follows a chain: a medium-term target projection (the what), master plans (the how), Cultributes as enablers for the how, from these competencies and requirements profiles, a target-actual comparison for managers and employees, and finally people development.

A role description as the basis for assessment contains five parts: the expected contribution based on the Balanced Scorecard, the main tasks, the professional and the personal requirements, and a competency profile with standard and specialist competencies. Strengths and development opportunities are then identified along four dimensions: competencies, career stoppers, performance and potential. The rule is: potential is not performance. How both can be assessed separately is described in the white paper on potential and performance.

Development follows the 70:20:10 concept. 70 per cent of development takes place in challenging tasks in which knowledge and skills are applied in context. 20 per cent comes from supporting learning transfer through feedback, coaching, mentoring and peer groups, and 10 per cent from expanding knowledge through self-study, training, seminars and literature.

transformis associates leadership with tasks that people and established routines must handle together. These include creating an identity and a future, defining the target state and addressing the gap between target and actual, ensuring focus and seeing the inside and outside perspectives equally. They also include encouraging boundary spanning, ensuring decision programmes, describing and optimising processes and defining the internal rules of interaction and communication.

One task is particularly direct for human capital: getting and keeping the right people. Added to this are suitable observation and evaluation grids, defining the cultural characteristics of the organisation and developing the capacity for reflection. People management therefore remains a task of line management. HR advises and provides the systems.

The basis is the background information “Securing the availability of the necessary human capital to safeguard long-term business success” (V 1.0), written in 2014 when transformis was still called SEDLÁK & PARTNER. The parts on the Cultribute assessment, the competency model, potential and 70:20:10 are marked 2008. The document also contains a steering wheel with eleven steps for developing the HR function, from reviewing the framework conditions through future construction, goal setting, Strategy Map and key figures to organisation and implementation.