The ACE Advantage

How Smart Companies Unleash Talent for Optimal Performance


In the broad sweep of business history, the topic of human resources has risen and fallen in importance. Problems associated with employees rise up, more attention is paid to solving those problems, and once we figure out how to address them, they decline again in importance.

The period following the early 1980s saw a decline in concerns associated with human resources. Especially in the US, unions lost power, relatively lean economic times meant hiring was less of a concern, and downsizing created a supply of talent on the outside market that made it easy to hire for whatever skill needs employers had. The traditional model of internal development of talent, picking candidates in advance and developing them for future jobs, seemed to work fine for those employers whose needs were unique to them or who otherwise were inclined to grow from within.

This relatively benign period has begun to recede, however. One reason is that enough employers have backed away from developing their own talent so that, particularly for management jobs, the pool of qualified candidates who can step in from outside to fill vacancies elsewhere is now very limited. Another factor is the rapid change in business strategies and associated restructuring that has made it difficult to rely on established practices and procedures to run operations. Instead, managers and executives must step in and create new ways of getting work done more or less on the fly. Finally, employers are becoming increasingly aware of the varying contributions that individuals make in these new working arrangements: The very best of whom appear to be many times more effective than the average. The one-time increases in performance that came about from longer hours and more effort, especially for white collar workers, have hit their limits.

This is the context for "The ACE Advantage: How Smart Companies Unleash Talent for Optimal Performance." Bill Schiemann documents prominent cases from around the globe where business plans fail because of shortfalls of skill or abilities. The lost opportunities that come from having a workforce that is not Aligned, Capable and Engaged—the ACE model that Bill advances in the pages that follow—become very costly, and the ability to tap this People Equity becomes arguably the biggest source of long-term comparative advantage.

The case that Bill makes for avoiding those problems begins with the notion that one-size-fits-all strategies don't make sense. The historical paradigm on which we managed employees and tried to meet talent needs no longer works because of the challenges raised by this new context above and more fundamentally because becoming effective at managing talent issues requires making choices. The most important choice is to align approaches to people management with the unique business needs and business strategies for competing that every organization has. Into that framework, he mixes the traditional concern about engaging the hearts and minds of employees and developing the competencies the organizations need to meet those unique business challenges.

Fundamental to the book's approach is the notion at the heart of all good management, and that is the need to make choices. There are quite often trade-offs between goals and priorities. Choosing those trade-offs appropriately, in the context of the specific needs of each organization, is what makes sense.

The idea that human resources is its own world of professional, best practices is surely in decline, especially as we look around the world and see different models succeeding in different ways. The path forward for businesses surely begins by starting with the business imperative, and The ACE Advantage offers the road map to do it.

Peter Cappelli
Professor of Management and
Director of Center for Human Resources
The Wharton School

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