Building Competitive Advantage Through People

This is an MIT Sloan Management Review article. Forget capital; it's relatively easy to obtain nowadays. Today's scarce, sought-after strategic resource is expertise, which comes in the form of employees. Although organizations have changed mightily from the days of hierarchical, top-down management, they still have a long way to go. In addition to issues of company structure and who should be involved in strategic decision making, there are questions of how the value that companies create should be distributed, now that employees, as well as shareholders, control a scarce resource. And then there are the intangible yet crucial changes that must occur in senior managers' ways of thinking--and in the atmosphere and culture of the company. Reorienting old-school senior managers away from capital and toward knowledgeable employees will be difficult, but Christopher Bartlett of Harvard Business School and Sumantra Ghoshal of London Business School have several recommendations for human resources professionals, who, Bartlett and Ghoshal maintain, will be key players in the design, development, and delivery of strategy. Their task is threefold: build up the company by acquiring and retaining highly skilled employees; find a way to embed individual-based knowledge in the company, making it accessible and useful not just to one unit or one function, but to the entire organization--that is the linking task; and create an engaging, motivating, and bonding culture to attract and keep talented employees--the bonding task.

• Competitive advantage
• Leadership
• Hiring and recruitment