[Music] thank you hello I'm Paul michaelman from Harvard Business publishing and I'm delighted to be joined today by dick Beatty dick is a professor of human resource management in the School of Management and Labor Relations at Rutgers University and he consults extensively with organizations around the world along with co-authors Brian Becker and Mark Houston dick is the author of The differentiated Workforce dick thanks for joining the program today glad to be here with you Paul thank you dick our mission today is to introduce our audience to the Core Concepts of the differentiated Workforce and to help them understand how to manage their talent more like a portfolio so to begin what does the differentiated Workforce well Paul all firms differentiate on the outside strategy is all about differentiation what firms try to do is to be different in ways that add value to customers and once they've done that they try to differentiate internally with all the resources that are required to make that happen they differentiate with Financial Resources material resources information time and yet firms don't necessarily do a very good job in differentiating with their most expensive resource the workforce knowing and understanding how an organization creates wealth and creates value and knowing who and where that's done inside the organization is much of the challenge that I think we're trying to address with this book all of those other resources have systems to manage the allocation management measurement decision making and provision of consequences about all those other resources firms don't necessarily have good information about their Workforce and how it adds value in the marketplace this has been a perennial kind of Challenge and the workforce almost has looked at as a commodity in many firms but differentiating knowing and understanding where who and how wealth is created how customer value is created first enabling the creation of wealth is an important understanding for organizations and we believe we have designed a way a process a system whereby organizations can better understand how this evolves and the impact it can make is this about the people in the organization or the roles in the organization or both well it all begins with strategy knowing and understanding the markets you know ask yourself how are you going to grow this business where are you going to play how are you going to win and how are you going to be different once we understand that then we can come back and really talk about the implication for the Total Resource package that managers have our focus is upon the workforce and so we begin by saying you need to understand what your business strategy is and then secondly you need to understand what your Workforce strategy is first of all what kind of culture do you really need you know there are very different organizations with very different ways of winning and different strategies require different cultures if you're an organization that's trying to win by driving all costs out of the business so you can pass that on to your customers then you want to Workforce that really can live in a very rigid kind of environment and there's only sort of one way to do some things but if you work in an organization that's trying to be really Innovative and creative and come up with new products new offerings it's a very different culture in addition what we need to understand is what are those capabilities that firms need to do to differentiate themselves if you look at Walmart it's Logistics distribution Information Systems it's purchasing trying to drive down all costs it is real estate locating the right place to locate a store but if you look at in the same industry whether Nordstrom or Neiman Marcus you have very different capabilities capabilities really involving things such as the buy you know knowing what the fashion trends are having the right merchandise in the right place at the right time having the right kind of marketing having consumer Insight you know think about the things that really differentiate and then beginning to think about what are those positions that really make a difference you know I think all employers should ask who and where in the workforce creates customer and economic value as I said creates customer Value First that can later be translated into the economic way not all positions have that impact so we begin to look at this as a process where we understand business strategy then begin to ask what kind of a Workforce strategies do we need what kind of culture do we need and then begin to ask what are those capabilities what are those three four five things we must do extraordinarily well then ask within those capabilities what are those positions that really make a difference obviously some positions have a profound impact Upon A firm's competitive advantage and how it differentiates itself in the marketplace and then ask the people question who do we have in those roles that are really top talent and extraordinary performers who do we have that really delivers our value proposition that creates value much of this is based upon the assumption that performance varies we have top performers we have middle performers and we have people that aren't doing so well in some of those roles that makes a huge difference in those roles that make a difference so our system our process our approach is trying to align and understand business strategy and the profound Workforce implications that it can have this also has implications for how firms manage their HR functions in many respects HR has sort of been looking for ways to add value what we think we do and provide the HR Market is a way that they can score on the scorecard of the business the whole issue is how do we leverage leverage those positions that make a difference so once we've identified what those positions are then we can begin to talk about what HR is going to do different so we need to do different for the workforce that makes a difference what are we going to do different in selection development measurement rewards communication the design of work traditional HR kinds of things such that we can have this profound impact upon the value creating processes of an organization let's dig into an example if we might to kind of bring this bring this to life I think Nordstrom presents a really interesting case study sure so it is a retailer known for its Frontline customer service right it's the experience that customers have with sales associates that distinguishes the Nordstrom Nordstrom brand at least among other things yet sales associates are not traditionally particularly highly paid employees nor is that necessarily considered to be a desirable position for very capable people can you really bring the right type of person into that position can you take somebody out of what would seem to be a more glamorous management position and and and convince them to move into a sales associate role because that's where the value is created well I don't know if you can convince them to do that but I can guarantee you floor people in Walmart are different than floor people in Nordstrom four people in Walmart are much more concerned about stock outs availability of merchandise and so forth in Nordstrom's it's a solution cell you know what I think the people in Nordstroms or with the young chairman of Nordstrom wants to do is to be able to outfit me to make me look the very best I can for some major event in my life a reunion a wedding you know a baptism or whatever else and when I enter the store I'm looking for somebody that can help me do that that's a whole different kind of thing and of course there are different requirements for those people doing those kinds of things people that know fashion people that can help you look your very best and are interested in the cell yes but more interested in basically the service because the message is we're selling a service here we're selling a fashion solution so that you can look the very best at whatever event that you are asked to appear in so again sticking with Nordstrom for just a moment because I find it to be an interesting example where might they look for the kind of talent to put in those front line roles clearly you're not going to look to Walmart and a sales associate they were frankly to sales associate in most social Associates in most retail environments I mean would they go to service organizations kind of Consulting organizations and look to that type of of Salesforce well I think there's two things one I think whatever you do it's just like uh the cultural issue I mentioned before I don't think you ever want to hire anybody who's looking for a job you want to hire somebody who loves what you do and is involved with what you do I think you have to have people who are interested in fashion understand fashion are concerned about how they appear themselves and would be concerned about how you would appear and really understand the venue in which you're going to appear and what is the match to make that happen in doing that I think is a valuable service and a service that I'm willing to pay for because I certainly need to look a lot better than I would normally and I think others would do the same sort of thing and so people that enter that like doing that I think they like helping people they think they like fashion and of course they are incented for doing a good job and doing those things so that doesn't fit everybody you know it would be a different slice of the workforce that would do that and of course there's real variability there some people will be great at that some people are okay at that and some people won't be so good at that and the challenge for nurse I'm like many firms is to really restrict the range of top performers in those positions so you don't want that variance you want narrowing of that variance on the top end of performance for those people therefore what we say is you need a players in those a-rolls dick Beatty thank you very much thank you