It seems that every CEO shouts either, "People are our biggest asset!" or "What makes us different are our people!" But Edward E. Lawler III, author of Talent: Making People Your Competitive Advantage, has grown weary of these clichés and wants companies to start walking the talk. After all, he argues, a vast cross-section of companies derives competitive advantages not from offering the lowest price, the newest technology, or the fanciest product, but from being flexible and innovative. And those competitive advantages - true barriers to entry - come only from people.

It makes sense, then, that companies should dedicate themselves to managing those people and their talents. But Lawler's various surveys of Fortune 1000 companies demonstrate just how much companies undervalue talent management: only 39 percent of senior executives felt their HR departments were partners in developing corporate strategy, and the head of HR attended board meetings at only 19 percent of the surveyed companies. (Why bother? Only 23 percent of the CFOs said their boards took an active interest in human capital issues anyway, and more than half said their companies didn't even track employee turnover.)

Focus on the Family
The primary reason for this disconnect is that most organizations try to derive their competitive advantages from operating their structure efficiently rather than by harnessing talent from their human capital. Lawler contends that companies relying on the performance of their people for success need to be human-capital centric (HC-centric) instead. To do this effectively, he adds, they must organize themselves around supporting their people. That's why the likes of Google, Whole Foods, and Starbucks prosper, Lawler argues: These businesses are proof that companies don't succeed by having the right product or good financing, but by managing people well.

Companies must learn to translate the competencies and capabilities that create competitive advantage into specific, identifiable skills that mesh with their hiring and performance-appraisal processes, Lawler writes. He devotes a third of his book to helping readers develop the critical components of these processes for their companies.

Revving Up the HR Department
The bigger issue is giving the HR department a seat at the corporate-strategy table. This largely involves arming the department with more data and analysis. Accordingly, Lawler guides readers on how to build information systems for human capital, including advice on what data to gather, how to gather it, and with whom to share it.

Another part of Lawler's mission involves changing HR departments' day-to-day role. HR departments should add value by being an expert resource aimed at improving the performance of the vast majority of managers who have no actual organizational-management training. The problem here, however, is that many HR departments are staffed not with top-tier talent but rather with folks who are simply "good with people." That is the reason why Lawler devotes the back half of Talent to advice on staffing the HR department, how to get corporate boards invested in talent management, and how to get managers to make talent-management, decisions with the rigor usually reserved for financial decisions.

Ultimately, though, Talent is about the idea that many companies make their people their priority only when there is nothing more interesting going on. And, Lawler points out, that old habit will die hard. Some readers might take issue with a few of Lawler's assertions - for example, he writes that the HR department should be "the most important staff group" in an HC-centric organization - but there's no denying Talent's fundamental philosophy: You can either say you care about people, or you can do it.

Excerpted with permission. Copyright © 2008 by Soundview Executive Book Summaries. www.summary.com, 1 (800) SUMMARY, 1 (610) 558-9495.