HR Management & Compliance, Recruiting

Special from #SHRM2018: the HR Challenges of Competitive Abundance, Differentiation Decay

We’re in an age of “competitive abundance,” says Rusty Lindquist, Vice President of Strategic HR Insights at BambooHR, exacerbated by “differentiation decay.” Lindquist offered his thoughts at SHRM’s Annual Conference and Exposition, held recently in Chicago.

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Differentiation Decay

Once your organization finds a meaningful differentiation from your competitors, your advantage soon suffers from “differentiation decay.” At the beginning, companies succeed based on the perception that their differentiation is “remarkable,” Lindquist says, but over time the perceived value decreases to “expected.”

Competitive Abundance

And it’s harder and harder to delay the decay, says Lindquist. Think of the changes impacting competition:

  • Globalization has shrunk the world
  • Technology has leveled the playing field
  • Low entry barrier has increased startups
  • Ease of replication shortens product life cycle.

Love the Solution, Not the Problem

Because the decay can happen so quickly, Lindquist says, “Don’t fall in love with a solution—fall in love with a problem.” This is easy to remember, he says, by thinking about the oft-quoted statement of Ted Levitt, Harvard Business School marketing professor:

HR’s ‘Crisis of Credibility’

In Conference Board surveys, the top CEO “Critical Issue” the last three years in a row has been “human capital.” And HR owns it. Unfortunately, Lindquist says, HR is facing a “crisis of credibility.” He cites Harvard Business Review headlines:

  • It’s time to blow up HR and build something new
  • Rethinking HR
  • Why we love to hate HR
  • What will it take to fix HR
  • It’s time to split HR
  • HR faces a crisis of credibility in the boardroom
  • HR is our “favorite corporate punching bag”

More About Who You Are

Fight the crisis by making HR less about what you do and more about who you are, Lindquist says. Focus on people and culture:

  • People—Relentlessly attracting, inspiring, and empowering great people.
  • Culture—Creating a great place to work, so great work can take place.

That focus allows you to generate organizational velocity—the ability to create value at speed. Organizations that focus on people and culture to create value at speed are the organizations that will win, says Lindquist.

Another reason to focus on your people? Your customer experience will never be any better than your employee experience, Lindquist says.

HR Hierarchy of Business Value

HR spends less than 15% of its time on the high value outcomes, and spends most of its time dealing with the implementation and administration of HR policies and practices, says Lindquist, quoting Edward E. Lawyer III, writing in Forbes.

But when HR is involved, organizations function better, and are much more successful.

HR needs to be less optimized around processes, policies, and procedures, and more around people, productivity, and performance, Lindquist says. Here is his hierarchy: