Hi Tom Stewart,
I enjoyed your article in Jan 15 issue of Fortune about the future of HR.
It's provocative, but right on! I particularly enjoyed comparing it with
Drucker's chapter in "The Practice of Management" (1955!) entitled "Is
Personnel Management Bankrupt?".
Drucker wrote "A good deal of what passes today for management of the
human organization is mechanical in nature and might indeed be dispensed
by mail...The constant worry of all personnel administrators is their
inability to prove that they are making a contribution to the enterprise.
Their preoccupation is with the search for a 'gimmick' that will impress
their management associates. Their persistent complaint is that they lack
status. For personnel administration...is largely a collection of
incidental techniques without much internal cohesion. Some wit once said
that it puts together and calls 'personnel management' all those things
that do not deal with the work of people and that are not management."
So the reason HR activities can be subcontracted relatively easily is that
its skills are context-free - they do not require much tailoring for use
in different organizations. This means that there is unlikely to be any
competitive advantage to performing them in-house. So, as a manager, of
the three great systems of co-ordination and control - markets,
hierarchies (rules etc) and clans (communities) - one can get away with
using the market, the weakest and least time consuming control system.
This allows one to spend one's valuable time on skills which are
context-dependent but allow one to generate real competitive edge. These
include the 'soft' side of HR, activities which cannot be delegated to
staff specialists if they are to be seen as authentic.
Drucker concluded that personnel management was insolvent rather than
bankrupt, but the distinction doesn't change the fact that in HR nothing
has changed in 40 years!
-- Best wishes, David Hurst Speaker, Consultant and Writer on Management dhurst1046@aol.com