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 / Second Quarter 1997 / Issue 7(originally published by Booz & Company)


The Triumph of People Power and the New Economy

Make no mistake, implementing the New People Partnership is no easy assignment. The concepts are relatively straightforward, but executing them in a coherent and consistent manner that fits one's own company is very difficult. It requires a clear link between the business strategy, the people strategy and measures and rewards. This means a fundamental transformation in many companies. To accomplish it requires:

determining the business imperatives that mandate a New People Partnership.

developing a people strategy that is clearly linked to the business strategy.

defining the principles that will guide the partnership.

designing or redesigning human resource processes.

establishing quantifiable measures and a process for tracking implementation.

Understanding the business imperatives that require a New People Partnership is all about developing the business case for change. It is about understanding how employee well-being and employee satisfaction affect organization performance (the first principle of the New People Partnership). To underscore the point, it is worth repeating that an organization needs to make a real and quantifiable business case for change. This forms the basis for everything that follows. In the absence of a well-understood case for change, the organization runs the risk that this is a "flavor of the month" initiative, one that will fade away before having any measurable impact.

Once the imperatives for change are understood, it is time to deploy a well-honed strategy for satisfying the organization's long-term people needs. What is required is a structured, analytical approach to identifying anticipated gaps and imbalances in people resources, staffing levels, skills and anticipated movements. Specific human resource action plans are needed as well as a corporate-wide agenda.

Business requirements in turn shape the desired type of organization and people. Once grounded in the business realities, the principles guiding a New People Partnership can be articulated in a way that meets the needs of the company, the employees and the outside community.

It probably goes without saying that in order to make the New People Partnership a reality, companies need new people processes. The disconnect between the stated value of people to the organization and the actions that result is most often a reflection of people systems and processes that are out of date and way out of sync with the needs of the business. The gaps can be significant. For example:

Recruiting and staffing -- an imbalance in internal movement, inadequate in some areas and excessive in others; the wrong skill mix in terms of future needs; long hiring cycle times and high costs per hire; burdensome succession planning.

Employee development -- process out of sync with current career paths; development planning a paper exercise with no accountability for implementation.

Performance management -- too many objectives to keep employees focused on top priorities; objectives not linked to desired changes in behavior and skills; marginal performers continue to thrive.

Rewards -- tied to promotions that are increasingly unavailable; compensation not aligned with new organizations (e.g., team based); compensation structure does not provide for true sharing of risks or returns.

Separation -- best people leave; other employees not prepared for transitions; cost of packages spiraling upward.

Addressing these gaps and making the New People Partnership really work means delving into the details of all these processes. If the day-to-day handling of people-related issues does not fully reflect and reinforce the partnership, success will be difficult. At the highest level, an organization must focus on five imperatives to drive the partnership:

Create recruiting and staffing processes that place exceptional diversified talent at all levels and career stages, while allowing employees to pursue opportunities without restriction.

Place accountability for career development with the individual, while renewing commitment and resources devoted to training and development.

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