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Friday, December 18, 2015

Operational Strategy and HRM: Inseparable twins.

Steering an organization through the current scenario of the globalized economy for its sustainability calls for ‘strategic thinking’ and ‘strategic planning’ afresh and neither is adequate without the other (Loizos Heracleous, 2003). The ‘strategic thinking’ across the organization can lead to a phenomenon of discovering novel, imaginative strategies which can rewrite the rules of the competitive game and make the potential future significantly different from the present one. The strategy emerging from such a creative thinking makes sense only when it is operationalized.

At the operational level, successful innovation calls for hard work from the employees to accept the ‘strategic thinking’ chosen and translate the thought process into viable product concepts and deliver them to the customer with finesse. It is only when strategic thinking and strategic planning run side-by-side that tangible results can be achieved. The implementation of this new dialectic approach calls for a new leadership in addition to a re-orientation in the attitudes of the work force across the organization. In this entire game plan the CEO and his HR have a linchpin role in making the organization ‘ready’ to implement the strategy in the chosen new ‘format’. Let us now explore this relationship in detail.

Relationship between OS and HRM

HRM is today seen in a totally metamorphosed format: as a replacement of the old adversarial system between the management and the labour with a set of ‘commitment-building’ best practices (Boxall, 1993). Current style is working towards minimizing the urge of employees for organizing into unions by practicing commitment-building policies such as providing employees with more stimulating work, competency building programs, and enlarged scope for participation in decision making etc. This shift is considered potential-enough to ultimately substitute the management with the unions. Such a move is sure to release the potential capabilities of the work force that were otherwise hidden under the traditional ‘personal administration system’. It simply paves the way for competitive advantage in the fierce market battle.

A series of policy choices comprising human resource flow, employee influence, reward systems, and work systems are being made available today to every unit head to accomplish that best-fit between OS and HR. In one stroke this move has annihilated the principle of separation of HRM from other segments of management practiced under the earlier paradigm. This model prescribes that the HRM policies and systems must make it possible for managers at all levels of the organization to attract, select, promote, reward, motivate, utilize, develop, and keep and/or terminate employees in accordance with the business requirements, employee needs, and standards of fairness. (Beer, Spector, Lawrence, Mills, and Walton 1985). The need to align HRM with the proposed organizational strategy to ensure its implementation without any problem, is being increasingly realized by the corporates.

The current line of thinking in HRM views HR managers as strategic partners both in the formulation and implementation of strategies in such areas as recruitment, training, performance appraisal, rewards, etc. Secondly, the environment in which firms operate being dynamic, it constantly impacts the HR practices and hence organizations are required to constantly evaluate their strategies vis-à-vis external factors such as technological, political, and social factors; economic challenges, local and governmental issues, work force diversity, employers’ demands and internal factors such as organizations mission, policies and organizational culture. To be effective in such a complex and dynamic web of market forces, HR has to reinvent itself quite often to be always in a state of ‘best-fit’ for becoming a partner in implementing the organizational strategy.

Why this sudden interest in making HR a partner in OS implementation?

All jobs right from driver of the CEO’s car to the office messenger, stenographer, and accounts officer to the HR Vice President are important to the organization, else they should have not been hired and paid to perform the job. It is also true that unless the contribution from all these employees is bettered, no improvement in organizational performance can be accomplished. However, there would be some jobs which have much greater impact on strategy implementation than others and it is for HR to identify such critical jobs that matter in the success or otherwise of strategy implementation. Once, such ‘strategic job families’ are identified, HR should prescribe the set of competencies needed to perform those jobs and then work for filling those gaps, either by fresh recruitment or by training the existing personnel and develop them to man those positions effectively.

Successful execution of internal processes identified under an organization’s strategy, invariably calls for change in the way the businesses are being carried out. The emerging criticality is therefore: “how well the company can mobilize and sustain organizational change required under the proposed strategy?”  For instance, if the chosen strategy of a bank involves installation of ATM machines across the branch network in metro and urban centers, obviously, its implementation demands: assess the readiness of organization to implement the strategy in terms of —
  • Awareness of employees about the proposed strategic goals
  • Shift, if any required in the focus on customer-centric service delivery,
  • resulting redeployment of surplus cashiers,
  • whether the leadership at every operating unit level besides the corporate office has the required skills to foster such cultural shift in the organization, etc.
As successful implementation of changed organizational strategy calls for two basic changes: One, the way the business is conducted and two, employees must cultivate new attitudes and behavior. Similarly, when companies change their strategies, they need to change their very style of leadership right from corporate office to gross root level unit so that they could motivate and guide employees towards new ways of doing business.  Leadership should also work for generating ‘collaborative spirit’ among various teams working for the ultimate good of the company irrespective of geographic boundaries. Leadership should also strive to tell the ‘truth’ and share the information with peers, managers and subordinates.

In the final analysis what matters most is: change in the job profile of leadership across the system and that is where HR has to play a crucial role in building necessary support systems that facilitate transformation of the leadership at the shortest possible time.


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