The strategy literature often emphasizes firm-specific human capital as a source of competitive advantage based on the assumption that it constrains employee mobility. This paper first identifies three boundary conditions that limit the applicability of this logic. It then offers a more comprehensive framework of human capital-based advantage that explores both demand-and supply-side mobility constraints. The critical insight is that these mobility constraints have more explanatory power than the firm-specificity of human capital.

From the origins of resource-based theory, scholars have emphasized the importance of human capital as a source of sustained competitive advantage, and recently there has been great interest in gaining a better understanding of the micro-foundations of strategic capabilities. Along these lines, there is little doubt that heterogeneous human capital is often a critical underlying mechanism for capabilities. Here, the authors explore how individual-level phenomena underpin isolating mechanisms that sustain human capital-based advantages but also create management dilemmas that must be resolved in order to create value. The solutions to these challenges cannot be found purely in generic human resource policies that reflect best practices. These are not designed to mitigate idiosyncratic dilemmas that arise from the very attributes that hinder imitation (e.g., specificity, social complexity, and causal ambiguity). The authors drill down deeper to identify individual-and firm-level components that interact to grant some firms unique capabilities in attracting, retaining, and motivating human capital. This cospecialization of idiosyncratic individuals and organizational systems may be among the most powerful isolating mechanism. The authors conclude by outlining a research agenda for exploring cross-level components of human capital-based advantages.

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Recent years have shown an increased focus on workforce analytics and the importance of workforce analytics in helping HR professionals to be more useful business partners. This suggests that HR professionals may need to become more and more data savvy and develop better analytical abilities if they hope to perform well and contribute meaningfully in the future. Despite this emphasis, there has been no research explicitly connecting the individual level analytical abilities of HR professionals to their job performance. Using a proprietary sample of 360 feedback surveys from 1,117 HR professionals in 449 unique organizations we test this general relationship. We also test whether the relationship varies by industry‐, company‐, and job‐level factors. We find support for our main hypotheses that HR professionals with higher analytical abilities will also have higher perceived job performance. We also find that the strength of this relationship varies by some job roles. We explore and discuss these empirical results.

Research summary: Innovation requires inventors to have both new knowledge and the ability to combine and configure knowledge (i.e., combinatory knowledge), and such knowledge may flow through networks. We argue that both combinatory knowledge and new knowledge are accessed through collaboration networks, but that inventors' abilities to access such knowledge depends on its location in the network. Combinatory knowledge transfers from direct contacts, but not easily from indirect contacts. In contrast, new knowledge transfers from both direct and indirect contacts, but is far more likely to be new and useful when it comes from indirect contacts. Exploring knowledge flows in 69,476 patents and 89,930 unique inventors reveals evidence that combinatory knowledge from direct contacts and new knowledge from indirect contacts significantly affects innovative performance.Managerial summary: Inventors often combine ideas to create innovations. To do this, they need ideas to combine and they need the ability to combine those ideas. Inventors can get ideas to combine as well as the ability to combine ideas through prior co-workers. Prior co-workers can share ideas that may be relevant for the inventor's project and can tell the inventor about other things that other people are working on, especially people the inventor may not know. This can help inventors easily learn about ideas from friends-of-friends. The ability to combine ideas, however, is much harder to pass on. Prior co-workers must carefully work with the inventor to teach him or her the complex processes of combining ideas. This means that it is very hard to learn how to combine knowledge from a friend-of-a-friend, but it may be possible to learn from prior co-workers. We explore this phenomenon in the social relationships of software inventors.