Making Human Capability Happen: Specific Actions for Mindset, Conversations, Plan

Attention to human capability (talent + leadership + organization + HR) has increased as these topics create value for all “humans” (stakeholders): employees, business executives, boards, customers, investors, and communities. In the last four weeks, we have reported the Organization Guidance System (OGS) research that uses analytics to measure and report the value that each of the four pathways creates for each stakeholder (see figure 1), indicating priorities for where to invest in each of the four pathways.

While the ideas about and research on human capability demonstrate the value of relevant and rigorous analytics, turning these ideas into actions requires discipline during the planning phase.

In the HR space, a number of planning processes exist: manpower planning, labor forecast planning, workforce planning, skill-based planning, succession planning, leadership planning / pipeline, organization planning/design, scenario planning, performance planning, human resource planning, and so forth. Human capability planning integrates these disparate processes into one and links them to stakeholder value. Figure 2 shows the overall logic for human capability planning that links environment (stakeholders) to strategy to human capability to HR department. To make this logic simple and actionable, I will focus on figures and tables that help create a human capability plan with three actions: [1] adopt a stakeholder value-added HR mindset, [2] engage in value-added HR conversations, and [3] create a human capability plan.

1.??? ?Adopt a stakeholder value-added HR mindset.

HR professionals (and others) generally have a mindset or way of thinking about their role, identity, and value added. I propose these statements to explore the current mindset of an HR professional:

• ·The biggest challenge in my job is to (fill in the blank).
• My role is to (fill in the blank).
• I will add value to my business by (fill in the blank).

Often, the top-of-mind responses highlight designing and delivering HR practices (hire, pay, train, communicate, set organization policy). I suggest that for each of these responses, the HR professional should add the “so that” query that focuses on the value created from these HR practices for all humans (stakeholders) who interact with the organization. This stakeholder value-added mindset suggests that HR is less about HR and more about the value created for stakeholders. Acquiring this value-added mindset changes how HR professionals think, act, and feel about their role and identity.

2.??? ?Engage in value-added HR conversations.

Before creating a human capability plan, HR professionals need to engage in conversations with those required to make the plan happen: including board members, business leaders, executive teams, and HR professionals. These conversations help these individuals see how the human capability plan will help them reach their goals. Figure 3 summarizes the key elements of these conversations. Out of these conversations a human capability planning team can be formed that is responsible for crafting the human capability plan. This team will likely include business leaders (executives), staff specialists (e.g., in finance, marketing, strategy, technology), and HR professionals. They draft the human capability plan and engage stakeholders in its acceptance and implementation.

3.??? Create a human capability plan.

From the valued-added mindset and conversations will come a shared commitment to create a human capability plan. We have identified seven steps to this plan, overviewed in figure 4. As the team assigned to drafting the human capability plan fills in this form, the human capability plan emerges. With the tools below, each of these seven steps may be accomplished in a timely way.

3.1????????? Assess environment / stakeholder value.

Since human capability is less about “HR” and more about stakeholder value, the human capability plan starts by recognizing environmental trends affecting the business, identifying key stakeholders to the organization, and determining what each stakeholder values that the HC plan offers (see figure 5). The value-added promises to stakeholders become the outcomes and metrics of the human capability plan. By starting with stakeholder value (outside-in), the human capability plan becomes an integral part of the business agenda.?

3.2????????? Craft/clarify strategy.

Every organization unit likely has a strategy that includes a mission or vision and strategic priorities to differentiate the organization in the marketplace. A human capability planning process ensures that the strategy includes answers to these two questions: Where will we compete? How do we win? Implementing this strategy becomes a primary agenda of a human capability plan, so it needs to be thoughtfully crafted, clearly articulated, and widely shared.??

3.3????????? Identify talent requirements.

Turning individual employee skills or competencies into “talent advantage, ” or the right skills required to implement strategy and deliver value to stakeholders, requires investments in talent initiatives. Figure 6 lays out ten talent initiatives and specific actions that could be made so that employees have the right talent. As part of a human capability plan, teams should identify which of these ten initiatives will have the most impact on strategy and stakeholders. The OGS offers an empirical assessment to complement managerial judgement to select the top talent priorities. Out of this step, the top two to three talent initiatives are identified.

3.4????????? Identify organization requirements.

We have shared that organization requirements are less about organization structure and more about capabilities required to deliver strategy and stakeholder value. Capabilities represent what the organization is known for and good at doing. The human capability team can perform an organization capability assessment to identify the top two or three required capabilities (see figure 7 for twelve common capabilities). This assessment may include analytics from the OGS and judgement from those preparing the human capability plan.

3.5????????? Identify leadership requirements.

Work has shown that leadership consistently impacts strategy success and stakeholder value. We have identified six elements of and actions for creating the right leadership brand (see figure 8). The human capability team, using OGS and judgement, can identify the top two or three elements of leadership brand that should be prioritized.?

3.6????????? Identify HR department requirements.

The HR function or department exists to deliver strategy and stakeholder value through talent, organization, and leadership. Based on others’ work and our research, we have identified ten dimensions of a value-adding HR department (figure 9). The human capability planning team can use the OGS empirical assessment and their own judgement to identify the top two or three priorities for upgrading the HR department so that it delivers strategy and stakeholder value.

3.7????????? Implement actions.

As a result of steps 3 (talent), 4 (organization), 5 (leadership), and 6 (HR department), the human capability team can identify initiatives that help deliver strategy and stakeholder value. Their discussion now turns to prioritizing these human capability initiatives into two to four priorities that will have the highest impact on realizing strategy and stakeholder value. The chart in figure 10 helps human capability teams select these top priorities.

Once these priorities are identified, reviewed, and endorsed, the human capability team can create an implementation plan to accomplish them. Figure 11 summarizes research with seven dimensions of making change happen. These seven dimensions may be applied for the overall human capability planning process and/or for the specific human capability priorities identified in step 6 (figure 10).

Summary: Making Human Capability Happen

Few doubt that human capability matters. Building the right human capability agenda integrates a myriad of HR planning processes into one agenda. By focusing on stakeholder value, human capability investments can be made in talent, organization, leadership, and the HR department that have the highest impact. By using both the OGS empirical assessment and managerial judgement, the right human capability priorities may be identified and implemented. With the right mindset, conversations, and plan, human capability for stakeholder value results.

?What ideas would you add?

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Dave Ulrich?is the Rensis Likert Professor at the Ross School of Business, University of Michigan, and a partner at The RBL Group , a consulting firm focused on helping organizations and leaders deliver value.

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