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Published: April 1, 1997

 
 

The Triumph of People Power and the New Economy

Establish continued development as a condition of employment and enforce a disciplined management process to steadily enhance performance.

Redesign rewards to link them closely to performance.

Establish separation as a natural career stage and separate those who consistently underperform.

While these are not the only processes likely to require some degree of redesign to support the New People Partnership, they are usually the most critical areas to be addressed. At the same time, it is worth emphasizing the role that information technology plays in enabling many of the desired changes. Investments in information technology may be required to develop and deploy tools to support employees in identifying and pursuing job opportunities, fashioning career plans and obtaining appropriate training.

The last critical step in employing the partnership is establishing quantifiable measures for tracking its implementation so that everything is tied back to the business case. Many companies implement new people processes and programs without any good way to measure the impact they are having on the organization and the return on investment.

We find that you get what you measure. To really make the New People Partnership work, it is critical to determine methods for tracking key components of the model. Based on the business case, these could include measures for unwanted attrition, shortages in key skill areas and customer satisfaction. Focus groups and employee feedback surveys can also be very helpful.

REALIZING THE BENEFITS

Early adopters of the New People Partnership have been unanimous in applauding its strategic, operational and financial benefits.

The strategic benefits include greater employee loyalty and commitment to business goals, a way to drive cultural and behavioral change, a stronger corporate image for key stakeholders, better access to labor markets and improved customer relationships.

The operating benefits include a reduction in unwanted attrition through the retention of key talent and the lowering of absenteeism.

And, not surprisingly, the financial benefits include higher revenues and profits, lower labor costs and more efficient use of resources to enhance overall productivity. Companies like Intel, 3Com and Southwest Airlines all fundamentally believe that their integrated people strategies have been critical drivers of their success.

As organizations begin to move toward the vision of the new business model, redefining the relationship between employer and employee will increasingly be the linchpin for succeeding in the marketplace. Indeed, success for the new business model will be driven by those in the marketplace, not by those at the top. That means having a skilled, knowledgeable and motivated work force at all levels. Without defining a New People Partnership, we don't believe it will be possible to get there.

There is no denying that it is hard to change and to adopt new philosophies that are truly meaningful. But we believe that the partnership is essential to the new business model and to a company's success in the 21st century. There is no choice for most corporations but to implement some form of it.

Reprint No. 97203


Authors
Bruce A. Pasternack, pasternack_bruce@bah.com
Bruce A. Pasternack is a senior vice president with Booz Allen Hamilton in San Francisco. He is the coauthor, with Albert J. Viscio, of The Centerless Corporation: A New Model for Transforming Your Organization for Growth and Profit (Simon & Shuster, 1998).

Shelley S. Keller, Shelley S. Keller is a principal of Booz-Allen, based in Chicago. She focuses on organization and people strategies and major change programs and is a member of the strategic leadership practice. Ms. Keller holds a master's degree in management from the J.L. Kellogg Graduate School of Management at Northwestern University.
Albert J. Viscio, Albert J. Viscio is vice president of Booz-Allen. He is co-founder of the company's Organization and Strategic Leadership Practice, which is concerned with top management, organization, business model transformation and leadership issues. Mr. Viscio holds a B.A. in economics from Holy Cross College and a Ph.D. in economics from New York University. Mr. Pasternack and Dr. Viscio are authors of "The Centerless Corporation" (Simon & Schuster, 1998).
 
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