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,ScottA.SnellCornellUniversity393IvesHallIthaca,NY14853,CompetingthroughKnowledge:TheHumanCapitalArchitecture,IBM,“Youcangetcapitalanderectbuildings,butittakespeopletobuildabusiness.”ThomasJ.Watson,IBM,DidIBMforget?$168billion(TobinsQ=2.1)Hardware,software,andservicesNobelprize-winningscientists3,768patents(1993-1995),WhatsHappeningToday?,IndustryChangesGlobalizationInformationtechnology,NeedforOrganizationalagilitySpeedInnovationCost,Knowledge-basedstrategiesCorecompetenciesInnovationExternalpartnerships,Leadingto,NewBusinessEquation,CoreCompetence,isabundleofskillsandtechnologiesthatenablesacompanytoprovideaparticularbenefittocustomers.HamelandPrahalad,1994,SONYMiniaturizationPocketabilityFEDERALEXPRESSLogisticsOn-timedeliveryHONDAEnginedesign/mfg.ReliableperformanceMOTOROLAWirelesstechnologyUntetheredcomm.,CoreBenefittoCompetenceCustomer,Knowledge,Technologies,Processes,Relationships,CRITERIAvaluableuniqueextendablelearning,BenefitsVALUE=-Costs,UNIQUE=(socialcomplexity+causalambiguity),LEARNING=(experiencexchallenge),CompetingThroughPeopleIdentify&developcoreskillsIntegratediverseactivitiesRespondwithagility&speedEmpoweractionInnovate,CoreCompetence,isabundleofskillsandtechnologiesthatenablesacompanytoprovideaparticularbenefittocustomers.-HamelandPrahalad,KNOWLEDGE-customer-technology-operations-managing,PROCESSES-customersegmentation-just-in-time(hrs)-masscustomization-buildtoorder(AIM)-ROICmetrics-experimentation,TECHNOLOGY-Premierpages-softwareinstallation-TPMtriggers(parts,service)-customerpurchasingsystems,RELATIONSHIPS-customerintimacy(Boeing)-Platinumcouncils-supplierpartnerships(Sony)-employeeinvolvement-thirdpartyservicemaintainers(TPMs)-distributionagreements(UPS,Airbourne),“VirtualIntegration”,Leadingto,ValueUniquenessLearning,“Alow-valueproductcanbemadebyanyoneanywhere.Whenyouhaveknowledgenooneelsehasaccessto-thatsdynamite.Weguardourintellectualassetsevenmorecarefullythanourfinancialassets.”-RoyVagelos,formerCEOMerck,KNOWLEDGE-customer-technology-operations-managing,PROCESSES-customersegmentation-just-in-time(hrs)-masscustomization-buildtoorder(AIM)-ROICmetrics-experimentation,TECHNOLOGY-Premierpages-softwareinstallation-TPMtriggers(parts,service)-customerpurchasingsystems,RELATIONSHIPS-customerintimacy(Boeing)-Platinumcouncils-supplierpartnerships(Sony)-employeeinvolvement-thirdpartyservicemaintainers(TPMs)-distributionagreements(UPS,Airbourne),“PositivelyOutrageousService”,SouthwestAirlines,KNOWLEDGE-microbiology-biochemistry-microbiology-imunodiagnostics(antibodies/conjugates),PROCESSES-R&D/Mfg.-bioconjugation-antibodypurification-PCRamplification-DNAhybridization-TQM-commercialization,TECHNOLOGY-immunoassays-ELISA(serum/blood)-rapiddiagnostics-DNAbased,RELATIONSHIPS-CRC-DT,CDC-U.S.Army-WorldHealthOrg.-universities-distributionnetwork-employee(science/mkt),C2=“RapidLearning”,Leadingto,Anorganizationatthefrontierofitsintellectualfieldismorelikelytostayatthefrontier.Itcanattractandchallengemoreandbetterintellectthanitscompetitors.Bysolvingmoreadvancedproblems,ithasmorecapacitytosolveothers.Andsoon.”-JBQuinn,ValueUniquenessLearning,BIOTECHINC.,Benefits=-Costs,Combinationofpeopleandsystemsleadsto.,HumanCapital,SocialCapital,OrganizationalCapital,BioTech,Inc.:Intellectualcapital,People,Systems,KNOWLEDGE-microbiology-biochemistry-bioconjugation-imunodiagnostics,PROCESSES-R&D/Mfg.-bioconjugation-antibodypurification-PCRamplification-DNAhybridization-TQM-commercialization,TECHNOLOGIES-immunoassays-ELISA(serum/blood)-rapiddiagnostics-DNAbaseddetection,RELATIONSHIPS-CRC-DT,CDC-U.S.Army-WorldHealthOrg.-universities-distributionnetwork-employee(science/mkt),C2=“RapidLearning”,PEOPLE,SYSTEMS,CoreCompetence,Howdoeshumancapitalcontributetothecorecompetence?,ValueUnique,Resourcesneedtobe:,BenefitsVALUE=-Costs,DrivesinnovationRespondstocustomerdemandsProvidesexcellentcustomerserviceAchieveshighestqualityInstrumentalinprocessimprovementsDevelopsnewbusinessopportunitiesDirectlyaffectsefficiencyandproductivityMinimizescostsofproduction,service,delivery,NotwidelyavailableinthemarketCannotbeboughtorappropriatedDifficulttoimitateorduplicateSpecializedKSAsDifficulttoreplaceCustomizedtoourfirmDevelopedthroughon-the-jobexperiencesDistinguishesusfromourcompetitors,R&D,Manufacturing/Operations,Distribution,Sales,Sales,TMT,CustServ,HR,R&D,Rapids,Fin,CustomerService,Mfg,R&D,R&DPartners,CoreKnowledge,LowVALUEhigh,LowUNIQUEhigh,BIOTECH,INC:MappingHumanCapital,KEYFinanceHRTMTMISMfg/OperationsMarket/SalesR&DQualityBiologicalsCust.ServiceRapidDiag.Legal/Reg.Distribution,Rapids,ScottA.Snell,CornellUniversity,C2=RapidLearning,HR,Legal,MIS,Biologicals,Fin,Quality,TMT,CompulsoryKnowledge,IdiosyncraticKnowledge,AncillaryKnowledge,HighValue,LowValue,Generic,Core,Idiosyncratic,Ancillary,Compulsory,Unique,HumanCapitalArchitecture,HumanCapitaluniquevalue,HRMSystem,EmployMode,CoreHumanCapitalHighValue:DirectlinktocorecompetenceHighUniqueness:Firm-specificknowledgeandskills,EmploymentMode:knowledgeworkEmploymentRelationship:organization-focusedExamples:softwaredevelopers(Microsoft)drugresearchers(Merck)fundmanagers(Fidelity)“gold-collar”workers,HighValue,HighValue,LowValue,LowValue,Unique,Generic,Generic,Idiosyncratic,Idiosyncratic,Ancillary,Ancillary,Compulsory,Compulsory,HumanCapitalArchitecture,Core,HighValue,HighValue,LowValue,LowValue,Unique,Generic,Generic,Core,Core,Idiosyncratic,Idiosyncratic,Ancillary,Ancillary,HumanCapitalArchitecture,HumanCapitalArchitecture,Compulsory,EmploymentMode:traditionaljobEmploymentRelationship:job-focusedExamples:staffaccountants(Andersen)salespeople(Sears)truckdrivers(UPS),HighValue:DirectlinktostrategyHighUniqueness:Genericknowledgeandskills,CompulsoryHumanCapitalHighValue:DirectlinktocorecompetenceLowUniqueness:Genericknowledgeandskills,EmploymentMode:contractworkEmploymentRelationship:transactionalExamples:assemblers(Nike)clericalworkers(Halliburton)payroll(Continental)catering(ARAMARK),HighValue,HighValue,LowValue,LowValue,Unique,Generic,Generic,Core,Core,Idiosyncratic,Idiosyncratic,Compulsory,Compulsory,HumanCapitalArchitecture,HumanCapitalArchitecture,Ancillary,Ancillary,AncillaryHumanCapitalLowStrategicValue:OperationalroleLowUniqueness:Genericknowledgeandskills,EmploymentMode:partnershipEmploymentRelationship:collaborativeExamples:“wildducks”(IBM)designengineers(w/Boeing)trainers(Merck/Forum)authors(McGraw-Hill),HighValue,HighValue,LowValue,LowValue,Unique,Generic,Generic,Core,Core,Idiosyncratic,Idiosyncratic,Ancillary,Ancillary,Compulsory,Compulsory,HumanCapitalArchitecture,HumanCapitalArchitecture,IdiosyncraticHumanCapitalLowStrategicValue:IntermittentlinktocompetenceHighUniqueness:Specializedknowledgeandskills,TRADITIONALJOB-BASEDEMPLOYMENT,ALLIANCE/PARTNER,CONTRACTWORK,KNOWLEDGEWORK,S-specificjob,T&D-short-term,T&D-currentjob,T&D-external,$-internalequity,S-immediateperform,$-group,Job-narrow/simple,$-short-term,PA-quality,Job-customized,$-bonus,$-performance,$-industryexperience,S-strategycontribute,$-salary,Job-rotation,S-solveproblems,S-best,Job-security,$-high,Job-empower,PA-strategycontribute,T&D-investment,PA-workw/others,T&D-OJT,T&D-team,T&D-continuous,S-potential,S-promotew/in,PA-develop,Job-dynamic,Job-standardized,$-hourly,KEYJobdesignStaffingTrainingAppraisalCompensation,LowVALUEhigh,LowUNIQUEhigh,PlottingHRPractices,STUDY:152multi-productfirms200employeesCEO,VPHR,lineexecs,Lepak&Snell,2001,Rewards,Appraisal,Development,Staffing,JobDesign,enriched&empoweredcustomized,aptitude(abletolearn)promotefromwithin,continuouson-the-jobfirm-specific,focusonstrategiccontributiondevelopmental,externalequity(highwages)payforknowledge,experience,seniorityownershipandperks,COMMITMENT-BASEDHRMSYSTEM,CoreHumanCapital,EmploymentMode:knowledgeworkEmploymentRelationship:organization-focused,Rewards,Appraisal,Development,Staffing,JobDesign,clearlydefinedmoderatelyempowered,externalrecruitmentachievement,limitedtofirm-specificshort-termfocus,developmentalfocusonperformance,externalequity(marketrate)payforperformance,PRODUCTIVTY-BASEDHRMSYSTEM,EmploymentMode:traditionaljobEmploymentRelationship:jobfocused,CompulsoryHumanCapital,Rewards,Appraisal,Development,Staffing,JobDesign,well-definedlimitedscope,outsourced(perhaps)contractforaspecifictask,limitedtorules&procedures,administrative,hourlyorcontract-contingent,COMPLIANCE-BASEDHRMSYSTEM,EmploymentMode:contractworkEmploymentRelationship:transactional,AncillaryHumanCapital,Rewards,Appraisal,Development,Staffing,JobDesign,team-basedenriched&autonomous,abilitytocollaborateachievement,continuouson-the-jobfirm-specific,team-orientedgoalaccomplishment,group-basedincentivescontract,salary,pay-for-knowledge,COLLABORATIVEHRMSYSTEM,EmploymentMode:partnershipEmploymentRelationship:collaborative,IdiosyncraticHumanCapital,HumanCapitalArchitecture,lowUniquenesshigh,lowStrategicValuehigh,HumanCapitaluniquevalue,HRMSystem,EmployMode,RelationalExchange,Transactional,Internalization,Externalization,IdiosyncraticHCMode:PartnershipHR:Collaborative-selectonpastexperience-developtherelationship-evolvingscope-rewardsforideas,CoreHCMode:KnowledgeworkHR:Commitment-based-staffbasedonpotential-develop(firm-specific)-extensivepay&benefits-autonomy/self-direction-mistakesareimportant,CompulsoryHCMode:TraditionaljobHR:Productivity-based-staffbasedoncurrentskill-lessdevelopment-marketwage-focusonSTperformance-mistakesabovethewaterline,AncillaryHCMode:ContractworkHR:Compliance-based-standardize/simple(outsource)-focusonrules&procedures-narrowscope-erroravoiding-hourlypay,Oneflawinknowledgemanagementisthatitoftenneglectstoaskwhatknowledgetomanageandtowardwhatend.Knowledgeshouldbemanagedwithinthecontextwherevalueiscreated.-TomStewart,LinkBackToCoreCompetence.,LowVALUEhigh,LowUNIQUEhigh,BIOTECHINC:MappingSocialCapital,TMT,Rapids&Ext.Partner,R&D&Government,QualityTeam,Production&TMT,Marketing&Sales,FOCUSON:GovernanceTMTCultureValueChainTaskEnvironmentStakeholdersRemoteEnvironment,Production&RawMatSup,R&D&Suppliers,R&D&Production,TechSupport&Customer,R&D&Customer,R&D&Quality,TMT/R&D&U.S.Regulatory,Cust.Service&Customer,Culture(TMT),TMT&U.S.R&D*,TMT&U.S.R&D*,TMT/R&D&U.S.Mfg.,TMT&U.S.R&D,TMT&Customer,R&D&ExternalR&D,Governance,Marketing&Customer,R&DTeam,Production&Sales,MIS&R&D,ProductionTeam,Production&Quality,R&D&Sales,Sales/TMT&Distributors,ScottA.Snell,CornellUniversity,PATTERNS:Explicit-TacitTransactional-RelationalEffectiveness-Efficiency,LowVALUEhigh,LowUNIQUEhigh,MappingOrganizationalCapital,FOCUSON:DatabasesPatentsProcessesSystemsManuals,LN:Feelings,LN:Sexions(Suggestions),LN:GenNews,LN:ContactDatabase,LN:Resear
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