Business Week Case

the information in the first handout.  Respond to the following two
questions which follow the Business Week case near the end of the

1. Which functions of human resources management are described in
this case? Which are missing? In what ways, if any, are the missing
functions relevant to building competitive advantage, too?

2. The writer and people interviewed talk about competitive
advantage coming from the qualities of a company’s top executives. To
what extent do these principles apply to middle managers, supervisors,
and non-management employees?

TEXT of the Business Week Case follows: (for those who could not locate it)

Business Week Case: Rebuilding Competitive Advantage

As the U.S. economy moves from recession to recovery, businesses are
obsessively focused on risk management, cost containment, supply-chain
sustainability, resource efficiency, and maintaining their competitive

Yet a company’s success—or lack thereof—in any or all of these areas
will be moot unless it recognizes and deals with its vulnerabilities
related to retention and succession. Business results will be predicated
by an organization’s approach to executive talent management.

Bill Conaty, who spent four decades in human resources leadership
roles at General Electric (GE), effectively synthesized this agenda. He
stated that gaining a decided advantage over the competition starts with
attracting the right talent to the organization.

He added that companies must also invest in executive talent
development, assessment, and retention because they’re just as critical
to business performance. The market leaders in any industry recognize
that attracting and developing the best executive talent is a continual,
institutional priority, no matter what the economic environment, Conaty
said. He pointed out that development needs—even for people at the most
senior level—are not fatal flaws for a corporation or an individual
unless they go unaddressed.

Claudio Fernández-Aráoz of Egon Zehnder International says that
despite [today’s high] unemployment numbers, companies still need to
focus on attracting superior executives because demographics already
indicate that the number of managers in the right age bracket for
leadership roles will drop by 30 percent in just six years.

“Companies need to beef up their ability to attract great leaders,”
Fernández-Aráoz contends. “While over the long run companies should
focus on becoming more attractive by developing the type of culture,
environment and team that outstanding executives want to join, they also
need to immediately focus on winning the coming fight for executive
talent one leader at a time.” And that’s not just about money.

Companies can attract superior talent by demonstrating active support
for the candidate’s interests, describing the role realistically, and
involving the hiring manager (not just HR) in closing the deal, he adds.
Further, by enlisting the involvement of C-level executives while
recruiting for top positions and ensuring that compensation for a new
recruit is fair to current employees, companies can more effectively
integrate new leaders.

When it comes to assessing executive talent, Sumner Redstone,
majority owner and chairman of the board of his family controlled
National Amusements, Inc., and majority owner of CBS Corp. and Viacom,
told me recently during an exclusive interview that it all comes down to
his “Three C’s.”

“I insist that anyone I’ll hire, particularly an executive, bring
what I call the ‘Three C’s.’ That’s competence, commitment, and the most
important one, character,” Red-stone said. “Without character, I’m not
interested in their competence or commitment.”

The final piece of building, rebuilding, or maintaining a company’s
prized management advantage over the com-petition is retaining the best

Former Medtronic CEO Bill George offers his own advice. To keep your
top business leaders onboard, George says you have to challenge them.
“Put them in tough jobs. Make them responsible for something. Promote
young people; flatten the organization; and give people opportunities to
lead right now and they’ll stay with you and be true to you.”

Exceptional companies, he believes, must reward business leaders for
their performance and not simply reward their decision to stay with the

SOURCE: Excerpted from Joseph Daniel McCool, “How Companies Rebuild
Competitive Advantage,” BusinessWeek, February 24, 2010, http://www. .