I get many questions about what the main HR Strategies are and how they differ from each other. So, I thought it would be helpful to share the main points from materials I use when conducting HR Strategy reviews in companies or in keynotes on HR excellence. So here are four HR Strategies in a nutshell:
HR strategy unplugged
1. "Best fit" between strategy and organisational capability
- Stage 1: understand environment, customers and internal capability
- Stage 2: develop performance vision
- Stage 3: define strategy and change agenda
- Stage 4: design and implement
The Best Fit approach may take longer than item 2 below, but it offers the best chance of success.
2. Install “best practice” elements e.g.
- Careful recruitment and selection
- Extensive use of communications
- Teamwork with flexible job design
- Strong emphasis on training
- Involvement in decision-making with responsibility
- Performance appraisal with links to pay if appropriate
- Fluid and adaptive organisational structure
- High quality staff and internal practices to achieve high quality products
- Optimal employee commitment to enterprise goals
The best practice approach assumes that you can effectively ‘plug and play’ HR practices from company to company. The Public Sector in particular is fond of the approach. Yet plug and play HR rarely works without some consideration of the culture and structure into which best practice is to be installed.
3. To exploit organisational core competencies, which exhibit the following characteristics:
- Provide access to a wide variety of markets
- Make a significant contribution to the perceived customer benefits of end products
- Are difficult for competitors to imitate
Effectively an inside-out strategy – making the most of what you have.
4. To create an adaptive or learning company
- The essence of strategy lies in creating tomorrow’s competitive advantage faster than the competitors mimic yours.
- The company’s capacity to improve existing skills and learn new ones is the most defensible competitive advantage.
- The company’s greatest vulnerability is its belief in accepted practice – its success recipes.
- There is a lot of interest in becoming adaptive, nimble and fast. In practice the challenge to becoming a learning company is in forgetting or ‘unlearning’ out of date success receipes
These approaches are not mutually exclusive and many companies would opt to focus on more than one approach. This is rather different than flitting from fad to fad on a regular basis.
We’ll be exploring the theory and practice of becoming a learning company at the Chartered Management Institute in Bedford on Tuesday November 13 evening.