The People Challenge for the Midsize Organization

Smiling Group of ProfessionalsThere are many challenges facing the IT function within the midsize organization. Actually, there are many challenges facing the IT function within all organizations but there’s a particular challenge facing the smaller organizations.

The ultimate challenge for small and midsize organizations is finding the right mix of people and technologies for the things the organization needs to do. For example, for an organization to start exploring big data, they first need to find people and technologies that allow them to do the data collection,data storage and analysis that needs to be done. This particular challenge isn’t all about money, it’s about finding the right people with the right skills to do the work as well as finding the right technologies and systems to deliver the required functionality.

The challenge of finding the right people and technologies isn’t just an SMB challenge. It is faced by every organization, but small and midsized organization can have more of challenge on their hands because they can’t offer the same long career path to new employees.

Over on the Midsize Insider, S. Anthony Iannarino wrote an article titled “You are Hiring for Runway” where he talks about the need to hire for the right skills but also the right “attitude” and growth potential. He writes that organizations should hire those people who can bring a long-term advantage to the business.

That’s the difficulty for many SMB’s – it is often hard to keep people interested for a long career due to limited opportunities. The challenge for the small and midsize organization is, first, to find good people. Then, they need to find ways to keep those people interested and challenged.

WIth the right approach and mindset, small and midsize organizations can provide more opportunities to employees than their larger competitors.

IBMThis post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don’t necessarily represent IBM’s positions, strategies or opinions.

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Links for Dec 9 2012

  • Big Data and Discovery « Inside the Biz with Jill Dyche

    Quote: The sooner business executives understand the value of knowledge discovery, the more likely they can mobilize their organizations, introduce or revise analysis processes, and hire skilled resources that can ultimately differentiate them from their competitors. Indeed it’s through these low-hypothesis, high-reward surprises that companies can innovate and begin to thrive anew.

  • Are we asking the right questions concerning the future of IT?

    Quote: If you step back and look at the fundamentals you can make a case that IT is in deep and even existentialist trouble.  Trouble not at the individual firm level, there will always be leaders and late followers, but trouble to the extent that incremental change; adjustment and improvement may not be able to address IT’s strategic, organizational and operational relevance in the future.

  • Why You Need to Contradict Yourself » Communication » professional development » Self Improvement » Brass Tack Thinking

    Quote: If you haven’t looked back on your viewpoints and questioned yourself at least once, you’re likely surrounding yourself with yes-men and sycophants, falling terrible victim to confirmation bias, or severely limiting your experiences by staying inside your comfort zone.

  • CIO and HRO Data Analytics Collaboration — CIO Dashboard

    Quote: HR has the information to cultivate a real-time, data-driven decision making culture. In turn, CIOs have the data management skills to harvest and harness the data. CIOs need to demonstrate their ability to strategically partner with and effectively counsel business units. HR is low hanging fruit. The data is there and the executives are ready to find their business voice to claim a seat at the table.

  • Too many talking shops, not enough action | ZDNet

    Quote: From a business perspective never underestimate the power of genuine core contributors – respect, reward and acknowledge  their efforts and its value over time…the twinkling lights of alternative places to convene in the outside world have never burned brighter, and there has never been a greater need to focus minds on where information should reside within business organizations, and to acknowledge valuable insights from its true sources.?log=out

IT Human Capital as Competitive Advantage

This is an excerpt of a paper I’ve just completed titled “Information Technology Human Capital as Competitive Advantage”. I’ve provided a brief intro plus the conclusion here. This white paper was the inspiration for the the topics discussed in my previous posts titled “Resource Diversity & Immobility Simplified“, “Competitive Advantage and the Resource Based View of the Firm“, and “Competitive Advantage – The Human Capital approach

To read the entire article, download the PDF titled Information Technology Human Capital as Competitive Advantage“.


Purpose of this paper

This paper provides a brief review of the literature within the space of information technology and business alignment, and more specifically, the areas of creating competitive advantage by managing human capital to create a sustainable advantage in the marketplace.

Introduction

In today’s ever-changing world, organizations must learn to evolve, adapt and continuously rethink their strategic objectives and operational abilities. As part of this strategic planning process, organizations have historically looked at two aspects; strategy (how they will go to market, what they will sell, etc) and execution (how to implement the strategy, how to do business, etc). The seminal research on strategy and competitive advantage (Andrews, 1986; Porter, 1998a, 1998b) historically overlooked two of the most important aspects of any strategy; technology and people.

In the 1990’s, researchers and practitioners began looking at merging technology into the strategic planning process and how the alignment of business strategy with information technology can help to create a competitive advantage (Henderson & Venkatraman, 1993). These researchers had brought technology into the strategic planning process, and in some respects they considered the human resources of the organization, but they still overlooked the people as being a valuable piece of capital that could be used to create competitive advantage.

This oversight is most visible within the information technology (IT) groups. Even though many organizations and researches stressed the need for IT and business alignment, they still seemed to overlook the human capital aspect while aligning IT and business strategy.

These oversights have led to the current environment of overworked, disengaged and misaligned IT personnel and IT groups. The “turnover culture” that has arisen within the IT industry provides some evidence of the unhappiness and/or discontent that most IT personnel have (Moore & Burke, 2002).

Recent research has provided a path to the solution of the problem of creating sustainable alignment between IT and business strategy. These solutions involve not only aligning IT and strategy but also implementing human capital management practices to ensure that people are considered as much of a resource for creating competitive advantage as any other asset within the organization (Hu & Huang, 2006; Robert, Agarwal, & Ferratt, 2000).

This paper provides a review of existing literature related to the strategic alignment of business and information technology and human capital management practices. The first section, titled “Alignment of IT with Business Strategy” provides a review of existing business and IT alignment research. The second section, titled “Human Capital Management, IT & Business Alignment” provides an overview of existing research into human capital management practices within the IT space.

The third section, titled “Human Capital as Competitive Advantage” outlines the use human capital as a means to gain competitive advantage in the marketplace. Lastly, the fourth and final section titled “Future Research and Conclusions,” outlines areas that may provide avenues of further research and concludes the paper.

To read the entire paper, download the PDF titled “Information Technology Human Capital as Competitive Advantage“.


Further Research and Conclusion

Further research into this area can follow Ferratt et al.’s (2005) study of the effects of human resource management on information technology (IT) employee turnover (Ferratt et al., 2005) and Joseph et al.’s (2007) suggestion that adopting a human capital management approach to managing IS employees may increase employee engagement and reduce turnover and job dissatisfaction (Joseph et al., 2007).

Another area of further research that could be considered is Huang and Hu’s (2007) approach of combining human capital management along with a business-IT alignment model by using a balanced scorecard system to implement and measure alignment. This balanced scorecard approach seems reasonable but very little quantitative data exists to measure the success or failure of this approach (Huang & Hu, 2007). Further research into the use of balanced scorecards to align IT, business and human capital management practices could be accomplished by collecting quantitative data in multiple organizations to provide more insight into the success and/or failure of this approach.

Yet another avenue for further research is within the area of validation of alignment of IT system requirements with business strategy (Bleistein, Cox, & Verner, 2005). Bleisten et al.’s research provides a framework for measuring and ensuring that all IT system requirements are in alignment with business goals. This research is interesting but as yet unproven.

Lastly, research into furthering the application of the resource based view of firms and the creation of resource diversity and resource immobility within organizations seems to be a fairly wide open area. In many organizations today, outsourcing work has become the norm as has hiring contractors instead of full-time employees. Many research questions arise from this. A few examples are:

  • How can an organization create resource diversity and/or resource immobility when they are drawing from the same talent pool of outsourcers and independent contractors as their competitors? This is an idea that is very interesting and something worth pursuing.
  • How can an organization segregate IT projects so that non-strategic projects (is there such as thing?) are managed with non-strategic assets and resources while strategic IT projects are managed with strategic assets and resources.

There is still considerable research to be done to better understand how to create sustainable advantage using technology and people. The areas of information systems, strategic human resource management and organizational behavior can provide models to help create sustainable advantage and value for organizations.

In order to truly create sustainable competitive advantage, an organization must have the right strategy, technology and people in place. In today’s world, it isn’t enough to have only one or two of these; an organization must obtain and maintain the mix of the right strategy, the right technology and the right people.


A Full References list is found in the paper.
[tags] organization, Human Resources, information technology, Strategy, Management, HR, Project, Technology, culture [/tags]

HR World – 30 Questions you can’t ask

HR World has a new article titled “30 Interview Questions You Can’t Ask and 30 Sneaky, Legal Alternatives to Get the Same Info“.

At first, the title seemed to turn me off to the advice, but after reading through it, I’m OK with it but would have preferred a different title without the word “sneaky”.

There is some good advice for interviewers in the article. For example, one of the illegal questions and its legal alternative is:

What you can’t ask: Are you a U.S. citizen?

Although this seems like the simplest and most direct way to find out if an interviewee is legally able to work for your company, it’s hands-off. Rather than inquiring about citizenship, question whether or not the candidate is authorized for work.

What to ask instead: Are you authorized to work in the U.S.?

Another interesting example:

What you can’t ask: Have you had any recent or past illnesses or operations?

Again, gauging commitment is important, but illness isn’t something that most people can help.The answer here is to make sure that the candidate can perform the job while avoiding questions about his or her physical abilities.

What to ask instead: Are you able to perform the essential functions of this job with or without reasonable accommodations?

The article does a good job presenting illegal questions and alternative questions that an interviewer can use to gather as much information as possible.

Perhaps an unintended accomplishment of the article is to educate people that are interviewing as to what some key phrases in job descriptions and interviews might be and what they might mean. For example:

What you can’t ask: Do you have or plan to have children?

Clearly, the concern here is that family obligations will get in the way of work hours. Instead of asking about or making assumptions on family situations, get to the root of the issue by asking directly about the candidate’s availability.

What to ask instead: Are you available to work overtime on occasion? Can you travel?

This is an interesting question. Instead of directly asking if you have children, the interviewer might ask availability questions…knowing that these types of questions might be alternatives to the question such as ‘do you have children’ or a similar question might help the interviewee better understand the job.

Its an interesting article and definitely worth reading.

[tags] HR, people, Leadership, organization, Human Resources [/tags]

Competitive Advantage – The Human Capital approach

I was asked recently to describe how an organization can use its human capital to create competitive advantage.

I fell into the trap of using Porter’s descriptions and other schemes of describing what it is and how to achieve it and while I was talking I saw eyes glazing over and people losing interest very quickly. I had to find another way to describe competitive advantage and quickly.

The ‘usual’ definition of competitive advantage goes something like this (from QuickMBA):

When a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over its rivals. The goal of much of business strategy is to achieve a sustainable competitive advantage.

Michael Porter identified two basic types of competitive advantage:

  • cost advantage
  • differentiation advantage

A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). Thus, a competitive advantage enables the firm to create superior value for its customers and superior profits for itself.

That’s an awful lot of big words that really don’t provide a lot of actionable information, especially if you are trying to understand how to use people to create sustainable competitive advantage.

I hit upon the following definition and example and these seemed to stick fairly well…these aren’t mind-blowing but they were effective. My definition:

In order to gain competitive advantage, you must do something different than your competitors in such a way as to make it difficult (hopefully impossible) to imitate.

The above definition was easier for the audience to understand but they still wanted an example to help clarify and solidify what it really means to gain competitive advantage.

After thinking for a few minutes, I came up with the following example….maybe its not the best but it definitely helped the audience get a good grasp of how to use their human capital to create sustainable competitive advantage.

Suppose you’re the owner of an American football team and you’re trying to find a way to ensure that your team wins. What do you do?

Do you…

  • Spend millions on the best technology?
  • Spend millions on a new stadium?
  • Move your team to a new city and hope it works out?

These things might help attract a larger fan base and perhaps bring you more revenue but will they help you win? In football, the superfluous things such as technology,stadiums, etc mean nothing if the team is a losing every game. People won’t pay to see your team play if they lose. So what do you do?

You hire the best coaching staff and players that you can. Your coaching staff spends months (years?) ‘training’ and coaching these players to create a cohesive team that works well together. The coaching staff understands the strengths and weaknesses of the individual players and develops offensive and defensive schemes to take advantage of the strengths and hide the weaknesses.

Now…any other team can imitate the plays that your coaches develop. They can try to imitate the coaching style and the players…but they will fail. Unless they take your players/coaches from you, they will never be able to fully imitate your team.

Your competitors can always try to hire better people and develop better schemes but if you are doing your job as the owner of the football team you should be constantly evaluating your team to ensure that you have the right people with the right training in the right places to ensure success.

The ability to create a unique team is one of the most cost-effective ways to create real sustainable advantage in the marketplace (and in my opinion, the only way).

You can try to use technology, marketing or other approaches but unless you develop those approaches internally they will not provide sustainable advantage because your competitors can use the same approaches to match your every move.

Using the people within your organization to create advantage is one of the most overlooked methods in business today. In most organizations I’ve been a part of, the organization try to mold people to fit the organization rather than create an organizational model that fits the strengths and weaknesses of its people.

I’m planning on expanding on this topic a bit more in later posts by discussing a theory called the Resource Based View of the Firm. This theory states that by creating resource immobility and resource diversity, a firm can create sustainable competitive advantage. Check back for more.

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Planning for Expatriate Success

This is an excerpt from a paper I wrote while working on my MBA.To read the entire article, download the PDF “Planning for Expatriate Success.”

The modern day business environment requires organizations to compete on a global scale. In order to compete on a global scale, organizations must implement proper strategic plans to ensure that they remain competitive in the international markets. To ensure success, an organization must have a global strategic plan that covers all aspects of the business, including a globally conscious human resources strategy.

Global competition more often than not requires an organization to rethink their strategic plans. This reformulation of strategy must be done to ensure that products and services are tailored to the culture and environment of the region they are operating in. In the book titled International Assignments: An Integration of Strategy, Research, and Practice, the author’s provide insight into the specialized skills needed in the global environment when they write:

To effectively formulate or implement strategic plans for the 21st century, managers and executives must be able to focus on the unique needs of local foreign customers, suppliers, labor pools, government policies, and technology and at the same time on general trends in the world marketplace. For an individual, this requires tremendous environmental-scanning abilities just to pick up the information. It requires vast knowledge and processing abilities to categorize and interpret raw data effectively. It requires being able to understand and work well with people from different cultural, religious, and ethnic backgrounds as well as the ability to manage teams composed of cross-cultural members (Stroh, Black, Mendenhall, & Gregersen, 2005, p. 6).

In addition to the business practices and strategy, the global organization must ensure that their human resources strategy takes a global approach to the staffing of the organization. This strategy should include the hiring of a local workforce as well as the use of international assignments for their employees. Local staffing provides the cultural intelligence needed for the organization and key managers and leadership from outside the region to help build the organizations presence and environment in the new region/country. International assignments such as these can provide key employees valuable lessons in international management and multi-cultural organizations.

Selecting the ‘right’ person for an international assignment is just the first step for an organization. In addition to the selection process, an organization must properly plan for the relocation, reassignment and support of the employee and the employee’s family. To properly plan for the international assignment, an organization needs to consider all aspects of the assignment and prepare the assignee and their family for the relocation and immersion into a new culture and assignment. Runnion (2005) describes this planning process as a multi-stage process whereby goals, compensation, relocation services, support services and training services are agreed upon (Runnion, 2005, pp. 21-22) and then implemented.


References:

  • Runnion, T. T. (2005, July 2005). Expatriate programs: From preparation to success. Workspan, 48(7), pp. 20-22.
  • Stroh, L. K., Black, J. S., Mendenhall, M. E., & Gregersen, H. B. (2005). International assignments: An integration of strategy, research and practice (1st ed.). Mahwah, NJ: Lawrence Erlbaum Associates.

[tags] Expatriate Success, Human Resource, HR, Leadership, International Assignments [/tags]

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