The following notes are from an article by Ed Lawler in the “Strategy+Business” Summer 2008 issue – he discusses how organisations can walk their executives’ talk when it comes to the management of their talent. Many of these points have been discussed in the past by leading HR thought leaders like Dave Ulrich.

* The market value of most companies depend in large part on intangible assets, the most important being human capital.
* Many businesses need workers to perform complex work at a high level.
* Outstanding talent is scarce, and it can be a critical source of competitive advantage.
* When executives say people are important but the organization’s practices and structures do not reflect this view, the unspoken message seems to be contradictory.

Three features of any corporate structure that clearly show whether management truly believes in the importance of human capital:

1. Corporate Board
* The board of directors should have access to both the expertise and information needed to understand talent issues at all levels of the organization.
* A board should have atleast one member who has a sophisticated understanding of the research related to human resource management, organizational effectiveness, succession planning, and learning and development.
* Board members should receive regular information about the condition of an organization’s talent – and the way it develops and deploys that talent.
* It is particularly important that corporate boards spend time on succession planning for top-level management positions. The board should have up-to-date, in-depth knowledge of what executive talent is available and how well developed it is.
* Good analytic data showing how HR metrics relate to organizational performance should be present.

2. HR Department
* HR should contain some of the top talent in the company, along with the best information technology resources.
* HR should be a valued expert resource when it comes to strategy development, change management, organization design and talent management.
* The function should be staffed with individuals who understand the business – and the intricacies of human capital strategy and management systems.
* Strong HR analytics and a ‘decision science’ process should be adopted.

3. Information Systems
* To be effective, a human capital information system needs to track the contribution of people to the organization’s most critical and strategic objectives. It needs to measure the condition of the organization’s competencies and capabilities, especially those that are needed for superior performance.
* The HR department should have IT resources that will enable it to produce the kind of comprehensive, real-time quantitative data that can be used by leaders to make fact-based decisions about talent management.
* HR leaders should not just generate and analyze the data, they should apply it to the most critical decisions.

Source: “The Talent Lie” by Edward E. Lawler III, strategy+business, Issue 51 Summer 2008, Pg 38-42.