The value triangle defines the value that HR can provide building up from lower value at the base of the triangle to higher value towards the apex at the top. This build upwards is important - if HR does not provide basic value at the base of the triangle it is much more difficult to provide value at the top. However if HR only provides value at the bottom it has largely missed the point.
The bottom level is value for money. Value for money refers to basic, largely tangible value that may represent increased efficiency; incremental improvements in effectiveness; meeting compliance requirements or other basic standards. It is useful value but is not necessarily about meeting business objectives or providing customer satisfaction.
Adding value is about improving effectiveness and adding capabilities which will have a clear impact on business results, including operational processes, customer satisfaction and financial success. This level of value comes from focusing on the business; understanding the business; talking the language of business ie Finance (currently at least) and even being a business person first, HR person second (I'll have more to say on that later.)
The needs of the business can then be translated back up the value chain - creating outcomes which will support these impacts, and activities that will create the required outcomes.
Creating value is about finding new possibilities to help a business achieve more of its existing business objectives; new business goals or to transform the way the business works and to create new opportunities for competitive advantage. The principle of creating value is that continuous improvements are no longer enough - created value capabilities are needed to surprise competitors and change the nature of the competition.
Creating value comes from focusing on people and the culture - on the capabilities and engagement of the workforce which could help the business achieve even more, or on the potential of the workforce which could lead to new capabilities and then to helping the business achieve more. It rests on an understanding of people and culture and so the key skills come from psychology, sociology and anthropology.
So creating value is about reversing the causality in the organisation / HCM value chain. Adding value was about understanding the business needs and then aligning HR outcomes and activities back down the value chain with these needs. Creating value is about understanding the potential HR outcomes and then looking further down the value chain to add in the additional business opportunities these outcomes can provide.
The bottom level is value for money. Value for money refers to basic, largely tangible value that may represent increased efficiency; incremental improvements in effectiveness; meeting compliance requirements or other basic standards. It is useful value but is not necessarily about meeting business objectives or providing customer satisfaction.
Adding value is about improving effectiveness and adding capabilities which will have a clear impact on business results, including operational processes, customer satisfaction and financial success. This level of value comes from focusing on the business; understanding the business; talking the language of business ie Finance (currently at least) and even being a business person first, HR person second (I'll have more to say on that later.)
The needs of the business can then be translated back up the value chain - creating outcomes which will support these impacts, and activities that will create the required outcomes.
Creating value is about finding new possibilities to help a business achieve more of its existing business objectives; new business goals or to transform the way the business works and to create new opportunities for competitive advantage. The principle of creating value is that continuous improvements are no longer enough - created value capabilities are needed to surprise competitors and change the nature of the competition.
Creating value comes from focusing on people and the culture - on the capabilities and engagement of the workforce which could help the business achieve even more, or on the potential of the workforce which could lead to new capabilities and then to helping the business achieve more. It rests on an understanding of people and culture and so the key skills come from psychology, sociology and anthropology.
So creating value is about reversing the causality in the organisation / HCM value chain. Adding value was about understanding the business needs and then aligning HR outcomes and activities back down the value chain with these needs. Creating value is about understanding the potential HR outcomes and then looking further down the value chain to add in the additional business opportunities these outcomes can provide.
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