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The science of human capital

Published on
Saturday, November 19, 2011
Written by
Nick Walker [1]

Challenging days lie ahead again. Who should worry the most? Many would say human resources (HR) managers and their bosses. In some respects, they have the most to gain and the most to lose. And this book is written for them, and anyone else with an informed interest in HR. Many deem the practice as both a science and an art, but in this thought-provoking work, it is presented as more of the former.  

If you want to give your company a fighting chance of not just surviving but also thriving, Transformative HR will likely pique your interest, despite its clunky kicker - How Great Companies Use Evidence-Based Change for Sustainable Advantage.

That said, I would not call the Royal Bank of Scotland (RBS) a great company, in light of its 21st century track record. Nor would I describe in the same salutary way the opaque Malaysian government player, Khazanah Nasional Berhad. But IBM and Coca-Cola are also here, to balance things out.

The ability to make well-conceived HR decisions is crucial to staying competitive in an unforgiving globalised marketplace, and this well-organised book provides a wealth of information and insight on how best to make these decisions, both strategically and tactically. To achieve this, it delivers evidence-based methodologies to show the reader the way.

Transformative HR shows how a number of organisations are redefining HR leadership - "by using evidence-based change to optimise efficiency, effectiveness, and strategic impact". The authors - John W. Boudreau and Ravin Jesuthasan - assert that organisations can achieve greater success and create a more engaging work environment by adopting their "five principles of evidence-based change" - logic-driven analytics, segmentation, risk leverage, synergy and integration, and optimisation.

Jesuthasan is the managing director and global practice leader for Towers Watson's talent management practice, while Boudreau is a professor of management and organisation at Marshall School of Business at the University of Southern California (USC), and research director at the attached Center for Effective Organizations.

The book contains thematic messages based on the experiences of a bizarre mix of outfits, such as the CME Group, RBS, Deutsche Telekom, and Shanda Interactive Entertainment. It also features case studies of six multinational corporations - Coca-Cola, Khazanah Nasional Berhad, IBM, Ameriprise Financial, Royal Bank of Canada, and, again, RBS.

The publisher claims that "Transformative HR gives leaders the information and tools they need to create superior organisational performance through synergistic human capital decisions and investments that span the employment life cycle and organisational design decisions." But there's a tad too much corporate jargon in this richly detailed tome. Certainly, this is not a book for laymen, rookies, or graduates just out of business school. Rather, Transformative HR is clearly written for middle- and higher management.

Reassuringly, there are no great leaps of faith in this sensible and timely book. "Our thinking behind evidence-based change was inspired partly by the evidence-based medicine movement, which encourages doctors to determine which treatment, based on the evidence, is most effective," says Jesuthasan.

"It hardly seems like a radical notion, but human nature is such that people, even doctors, do not always behave with scientific rationality, choosing instead to rely on instinct and what might have worked before," he continues. "By using evidence-based change, HR is better equipped to make decisions that are based on well- grounded evidence, rather than gut feel."



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