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Linking corporate strategy with hr strategy

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Linking corporate strategy with hr strategy

  1. 1. LINKING CORPORATE STRATEGY AND HR STRATEGY Presentation Authors: Mr. Smit Dave Mr. Vishal Acharya Mr. Avdhesh Kaushik
  2. 2. Main Course Menu• Corporate and Business Strategy• Business Strategy and HR Strategy – Nucor – Lincoln Electric Company – McKinsey & Company• Changes in Business Strategy & HR Strategy – TCS – Harley-Davidson
  3. 3. Main Course MenuCorporate Strategy and HR Strategy Aditya Birla Group RPG Group Tatas Infosys Cisco
  4. 4. Starter Course• Businesses have become more knowledge- and technology-driven• The importance of people to organizational success• Importance of the “individualized corporation” - Sumantra Ghosal and Christopher A Bartlett, William Heinemann, London, 1999
  5. 5. Corporate and Business Strategy• Business strategy – 2 generic routes (Low cost & Differentiation) – 4 generic building blocks (Efficiency? Quality? Customer Loyalty? Innovation)• Distinctive competencies – Resources: Tangible & Intangible – Capabilities: Skills, Routines, operations, etc Can a competency be Core or Single in number??
  6. 6. How?? & What??• Corporate Strategy – Business Portfolio• Business Strategy – Competitive Advantage• There is nothing like core competence – 7 P’s model – People• Building on them is ongoing & functional process (Here comes imp of Learning & Dev & their tools)• Cost leadership involves focus on volumes & efficiency with close relationship between producing more & earning more• We shall now see examples where org was able to align their Corporate/Business Strategy with HR strategy
  7. 7. - Cost Leadership• Focus on volumes & efficiency• Well focused recruitment criterion - RFT• Workers bind by team – Managers bind by org as a whole• Promotes integrity & cooperation @ middle levels• Flat org structure – Reduce costs – Promotes transparency• Cost consciousness & utilization of internal capabilities• Efficiency? Quality? Customer Loyalty? Innovation? – Focus on these constructs organizational culture Is it only about products/services?? Lets see !!!!
  8. 8. • Focused on Compensation Structure• Wages for work & Bonus for performance• Pay for performance – Reducing costs – Cost leadership• Company profits distributed end of the year based on an individual merits: − Output − Ideas and cooperation − Dependability and quality• Asking for performance? Did prepare them for performance? Lincoln says YES !!!
  9. 9. Cost Leadership Strategy v/sDifferentiation Strategy
  10. 10. • Premium management consulting• International presence• Differentiation Strategy• People are really at the core of the value proposition• hires the best people out of the top business schools• “Up or out”
  11. 11. • Rough Patch in 1980’s initiated major organizational transformation• Ownership• Involvement• Decision Making• A culture of openness & Transparency
  12. 12. Corporate Strategy and HR Strategy• Aditya-Birla Group – Professionalism – Decision Making – Transparency in performance measurement• TATAS – Recognized early – XLRI link – Graduate Engineering Training Scheme• Infosys - Challenges in world of M & A
  13. 13. Changes in Business Strategy & HR Strategy• Business Strategy & HR strategy go hand in hand• TCS – Good training programmes – Employee Retention, a challenge – From merely a passport to USA to top the BT-Indicus survey of Indias Best Companies to Work for
  14. 14. How to link both effectively ?Ownership Empowerment Involvement
  15. 15. Linking HR Strategies and Practices to Strategic Requirements: 5-Point Agenda for HR Professionals
  16. 16. SPEND MORE TIME AND EFFORT UNDERSTANDING- HR professionals must spend more time and effort understanding the business environment and the key strategic issues faced by the company- Anticipation is the key – Be prepared- Understand and explain the external and internal environment to management and people within- Adapt with changing environment
  17. 17. Get involved• HR professionals must get more involved in the nitty-gritty’s of the business, i.e., in operational details and issues• Thin line of demarcation between HR and operations• Line managers taking up HR responsibilities Need of the hour - vice versa• Get into operations to understand requirements and provide service accordingly and effectively
  18. 18. Approach towards integration• HR professionals must move towards taking an integrated look at the people in the organisation, bridging the gap between HR and IR (Industrial Relations)- Operational boundaries going away- More compact now, lot of over lap- Multi tasking and multi skilled approach- Opportunity to bring single perspective of HR for all- Great opportunity for acceptance from all
  19. 19. Knowledge management• HR professionals must see themselves as knowledge workers and facilitators of knowledge flows within the organisation- Knowledge is the asset of the organisation- Most important to keep and increase competitiveness- Need to reflect in all HR processes- HR should not be excluded from Knowledge creation, management and absorption- Change in mindset required
  20. 20. Value Creation• HR professionals need to change from a support paradigm to a value creation paradigm- Add value to organisation- Measurement of right parameters- Not only HR but also strategic, operational measurement points
  21. 21. Solutions• Created Maitree, an organisation within HR. Its employees plus their spouses.• Conduct an annual survey called Pulse, which goes across the globe and supports 4-5 languages and these inputs are collected• Recognition even in slow down period
  22. 22. Solutions• Nominations of star in projects• Gems points to trade points for products• Best healthcare benefits in the industry• Understanding cultural nuances
  23. 23. Solutions• Created Maitree, an organisation within HR. Its employees plus their spouses.• Conduct an annual survey called Pulse, which goes across the globe and supports 4-5 languages and these inputs are collected• Recognition even in slow down period
  24. 24. Impact• 43600 offers from August to December (largest ever in TCS ) as compared to 38000 in last year• Gross hiring plan of 66000• Attrition rate reduced from 13 % to 12.8 &
  25. 25. AimCreate partners and not workers
  26. 26. SEVEN FORMS OF CAPITAL Representative Representative Examples Elements  Tangible Articulations  Respect for Nature, Architecture, Music, Language, Cultural  Norms  Range of Acceptable Behaviors  Mental Models  Trust, Wealth Creation Attitudes, Long-term Thinking  Health and Population  Nutrition, Medical & Mental Health Human  Education and Training  Primary & Secondary, Technical  Attitudes and Motivation  Self-responsibility, action-orientation  Qualitative, Quantitative Data  Statistics, Opinions, Records Knowledge Social  Frameworks and Concepts  Theories, Processes, Procedures  Knowledge Generation  Universities, R&D, Market Learning  “Good, Clean Governance”  Transparency, No Hidden Costs, Accountability Institutional  Justice System  Property Protection, Predictable Regulations  Connective Organizations  Chambers of Commerce, Unions  Financial Systems  Banks, Stock Markets Financial  Private Wealth  Bank Deposits  Public Wealth  Bank Reserves, Taxes, Duties, Macroeconomic Stability  Transportation, Communication  Roads, Ports, Telephone Systems Man-Made Physical  Power  Electric Grids, Generation Capacity  Water and Sewerage  Pipelines, Pumping Stations Natural   Ecosystem Services Raw Materials   Clean Air, Water, Protected Ecosystems Agricultural, Mineral, Petroleum Endowments  Climate and Location  Proximity to MarketsSource: Based on Wolfensohn framework and Cluster Pulse experience.