By David Creelman

MIT professor Zeynep Ton’s The Good Jobs Strategy is an important book for HR people. She shows how careful recruiting, good pay, and investing in training can have a huge payoff for the bottom line. Reading the headlines about the book an HR leader might walk away thinking, “That’s what I’ve been saying all along.”

The clue that the book is much more than an ode to the importance of people comes from the fact that Dr. Ton isn’t an HR person at all; she’s an operations professor. Her research focuses on the retail industry and she sees it through the eyes of someone trained to understand efficient manufacturing. The “good jobs strategy” is about operations as much as it is about people.

How good operations lead to good results
In her research on successful retailers, Dr. Ton found several key operational principles. One was to keep the number of different items for sale (stock keeping units) small; reducing the number of different items simplifies everything and that creates efficiencies. Standardized processes were also important to high performance. Perhaps more surprising is her finding that it pays to operate with some slack (i.e. extra staff on the shop floor) because it allows for continual improvement. Reading the headlines an operations leader might walk away thinking, “That’s what I’ve been saying all along.”

Integrating operations and HR
Ton’s key insight is that investing in people won’t have much impact if the operations are not designed to take advantage of their capabilities, and well-designed operations won’t deliver results without the right people capabilities. To be successful it takes operations and HR practices that fit together; the work of the two functions has to be integrated.

A good example of how operations and HR mesh is cross-training. A cashier who just does cash is not nearly as valuable as one who can expertly handle many other activities in the store. An operations manager may design processes requiring people to do multiple jobs, but that depends on HR providing the right cross-training. Since training is expensive, and takes time, it means HR also has to be good at retention. For that, it becomes obvious HR needs to be good at recruiting the right staff and that attractive pay is an essential part of the overall plan.

Ton’s “Good Jobs Strategy” really is a whole strategy where all the pieces need to work together. It doesn’t matter if HR does a great job unless it meshes with what Operations is doing; the reverse is also true.

Implications for the HR profession
HR needs to know a lot about their particular business.It’s not enough to be a generic HR expert: you need to understand the operations and the strategy behind those operations. Similarly, operations needs to understand people and see them as an asset to be leveraged,not a cost to be minimized. Furthermore, it is not a matter of HR merely providing ‘good service’ to the operations. HR needs to be part of the conversation on operations strategy, since there can be no operations strategy without a people strategy.

We tend to spend too much time in our HR departments, going to HR conferences, and reading HR books. HR needs to see how deeply people factors are integrated into the overall strategy of how an organization works. Reading The Good Jobs Strategy is a great introduction to the kind of integrated thinking HR needs to embrace.

David Creelman is CEO of Creelman Research. He works with a variety of academics, think tanks, consultancies and HR vendors in the Americas, Asia and Europe. In 2015 he will be focused on helping companies understand HR analytics. He can be reached at dcreelman@creelmanresearch.com.