Unlocking the Human Potential

Management Guru, Michael Porter, states that for a competitive advantage to be sustainable, it should be inimitable and unsubstitutable. While this theory has gained wide acceptance, a peek into what it means for today’s rapidly changing competitive landscape is in order.

We are past the stage where a firm could compete on the strength of propriety technology alone. At one point of time, people thought that the strength and wide acceptance of Microsoft’s propriety software would allow it to reign unchallenged. However the emergence of competitors in the space of web-browsing tools, email and even office automation show that the propriety software is not a sustainable advantage after all.

Southwest Airlines has been the best low-cost American carrier for donkey’s years. Despite competitors trying to ape its success, they’ve never quite succeeded. Why? Because the strength of Southwest doesn’t lie in just its operational excellence but in its people.

These two examples bring us to this article’s central theme – in a world where every technology has a substitute and every strategy is liable to be imitated, it is only the people of a firm that could provide a firm with a truly sustainable competitive advantage. With the services industry contributing to 54% of India’s GDP, the importance of human resources cannot be stressed too much. Gone are the days when human resource management was just an administrative or clerical job. Management has wised up to the fact that the success of a firm’s strategic objectives is possible only by partnering with its people.

There are, however, truths that would sober attempts at quickly tapping this resource. The developed economies of Western Europe and Japan face an enormous challenge in the form of a shrinking population. Other developed economies, including USA and China, face the prospect of a rapidly ageing population. Countries not facing either of these problems, like India, still have a shortage of talent. Yet all these countries also suffer from significant unemployment.

It is therefore clear that the problem isn’t one of human resource shortage – it is the failure to tap into the existing human potential. The HR Summit, part of Horizons’07 – the annual management conclave of the Indian Institute of Management Kozhikode – would initiate a dialogue that would seek to find out ways to unlock the human potential.

–Hitesh Sharma, 2^nd year PGDM, IIMK

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