The theme for this month’s issue of Harvard Business Review is “Reinventing America – Why the World needs the U.S. to Bounce Back”. There is one article in particular which highlights the need for the U.S. to become more competitive. Here Michael E. Porter (ever hear of Porter’s Five Forces Model?) and Jan W. Rivkin discuss the need for America to repair some “cracks in the foundation” which from a macro perspective include:
- Sound monetary and fiscal policies (such as manageable government debt levels);
- Strong human development (good health care and strong K-12 education systems) and
- Effective political institutions (rule of law and effective law-making bodies)
The area that I found most critical is human development, particularly the lack of focus on our education systems and the training / development of our employees. There is a sister article in HBR entitled “A Jobs Compact for America’s Future” which really hones in on the human capital side of America’s challenges. In this article, author Thomas A. Kochan states “Without a well-trained, well-paid workforce the United States cannot compete with other nations effectively…” He observes that “Corporate leaders frequently say that people are their most important asset. Evidence suggests that many of them don’t believe a word of that claim.” Kochan also points out that not all U.S. firms have fallen behind the rest of the world. “Every industry includes firms that compete on innovation, product development and service quality. These companies invest heavily in human and social capital. In the HR literature, the approach is called a high-road strategy, accompanied by high-performance or knowledge-based work systems. The specific practices vary across industries, but there are some generic features:
- selection of employees with technical, problem-solving, and collaborative skills;
- significant investment in training and development;
- commitment to building trust and relying on employees to solve problems, coordinate operations, and drive innovation;
- compensation systems that align the firm’s and the employees’ interests;…“
“Two decades’ worth of research on high-road companies has documented their ability to achieve world-class productivity and service quality. If we define U.S. competitiveness as the capacity to be attractive to businesses and to simultaneously create a more widely prosperous society, then high-road strategies become critical.”
Mr. Kochan is not alone in his thinking or his research. There have been numerous articles written about how professionals (even those with advanced degrees) are leaving school with a lack of “soft skills” (we call them strategic competencies), which are the very skills (problem-solving, collaboration, communication) that are required for America to be competitive. MBA and Masters programs (particularly in Supply Chain) are listening to the complaints from corporate America and are adjusting their curricula accordingly. But many companies have not gotten the message and continue to cut training and development budgets entirely OR focus merely on technical training thereby cutting out all “soft skills” training. Those “soft skills” or strategic competencies are the backbone of high performance work systems (“HPWS”). HPWSs have been around for decades but seem to have gone through a resurgence as America scrambles for answers to our lack of global competitiveness.
If you think about it, the answer really isn’t all that hard. America needs to put its money where its mouth is and make the American workforce an asset for our country. Like any other asset it requires investment:
- strengthening early childhood education
- access to affordable post high school education
- university curricula that REQUIRE more emphasis on strategic competencies
- a significant investment in training and development within companies
If we can do all this, maybe America can be a global competitor once again.
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