I’ve finished my discussion on the three schools of competitive strategy in my arrow model but wanted to note a couple of other things before moving on.
Firstly, all three schools of thought about strategy rest on differentiation (and cost leadership.) In the capability world, what matters isn’t the best talent but the right talent.
Porter’s concept of trade offs can be useful here too. The concept originates in competitive positioning where Porter suggests that to identify the things we’re going to do especially well within a particular positioning the best question we can ask is what we’re not going to do, ie what we’re not going to worry about. If we don’t identify these too we won’t have the space or the spare capacity to focus on the things we are going to do particularly well. This idea works well for capabilities too.
For example you can compare Microsoft and Cisco. Microsoft puts a lot of effort into recruiting (and sometimes laying off) amazing IT engineering talent, so they scout the world’s best universities looking for this talent. They compete on having the best talent - it’s their organisational capability. Cisco doesn’t play in this space - it takes slightly less amazing talent (stilll very good - A- rather than A perhaps?) but sticthes this talent together into A+ teams. It competes on collaboration - that’s its organisational capability.
Again, strategic HR isn’t about the best people but the right people, but you can only really identify what’s right through the use of organisational capabilities.
Strategic HR is also about differentiating your approach, of the activities you use. And I’ve already referred to this as one of the benefits of focusing on outcomes in the organisation value chain. Once you’ve identified the right differentiation in terms of your people and culture you can then look at what activities will deliver these particular outcomes.
If you do this, you’ll end up very naturally identifying not best practices but best fit approaches which will be right for your particular business but may make very little sense elsewhere.
Finally, remember that there’s also the cost leadership option - there will always be organisations which treat their people badly in order to save costs - at least as long as there are people prepared to work for them.
Firstly, all three schools of thought about strategy rest on differentiation (and cost leadership.) In the capability world, what matters isn’t the best talent but the right talent.
Porter’s concept of trade offs can be useful here too. The concept originates in competitive positioning where Porter suggests that to identify the things we’re going to do especially well within a particular positioning the best question we can ask is what we’re not going to do, ie what we’re not going to worry about. If we don’t identify these too we won’t have the space or the spare capacity to focus on the things we are going to do particularly well. This idea works well for capabilities too.
For example you can compare Microsoft and Cisco. Microsoft puts a lot of effort into recruiting (and sometimes laying off) amazing IT engineering talent, so they scout the world’s best universities looking for this talent. They compete on having the best talent - it’s their organisational capability. Cisco doesn’t play in this space - it takes slightly less amazing talent (stilll very good - A- rather than A perhaps?) but sticthes this talent together into A+ teams. It competes on collaboration - that’s its organisational capability.
Again, strategic HR isn’t about the best people but the right people, but you can only really identify what’s right through the use of organisational capabilities.
Strategic HR is also about differentiating your approach, of the activities you use. And I’ve already referred to this as one of the benefits of focusing on outcomes in the organisation value chain. Once you’ve identified the right differentiation in terms of your people and culture you can then look at what activities will deliver these particular outcomes.
If you do this, you’ll end up very naturally identifying not best practices but best fit approaches which will be right for your particular business but may make very little sense elsewhere.
Finally, remember that there’s also the cost leadership option - there will always be organisations which treat their people badly in order to save costs - at least as long as there are people prepared to work for them.
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