Tuesday, August 08, 2006

HR Paradigm

Last few years has seen the great debate raging over the critical role which HR is going to play in the days to come. Business environment has become less predictable and the competitive value of the firm is decided by its unique and skilled workforce.

Organization strategy is not just driven by the technology they possess and the health of the balance sheet, the critical differentiator is the ability of the firm to scale up to the new growth trends. Growing market uncertainties has varied impact on the organizations future growth potential. Does this translate into an opportunity for the HR, to make its path breaking contribution in defining the Business Strategy of the firm?

Let’s imagine another situation in which marker trends are predictable and technological trends are going to remain stable over a period of time. In this situation do you see HR being considered as critical partner in firm strategy execution?

Chances are that HR will be delegated to do the regular predictable maintenance function and its true worth of leading from the front may remain a distant dream.

So does it means that this is best time for HR make its move from an enabler function to strategic decision maker in deciding the firm’s execution strategy.

Are we prepared to rise to the challenge?

A 2002 survey by the Society for Human Resource Management found that a dismal 34% of executives felt that HR was viewed as strategic business partner. However a careful examination of current trends which drive business decision making shows that HR is the only leading function which can play the most strategic role.

Top 3 drivers in today’s business environment are:

s Speed
s Technology
s Culture and Innovation


Speed: Business decision making is a factor of dynamic environment and speedy decision is key for effective results. Since the environmental variable continues to be ever changing the speed in execution is a function the healthy process and quality practices existing in the organization. Speed in decision making and execution is also characterized by the structure of the teams and units inside the organization. Organizations which have a flatter, nimble and decentralized decision making system in place are in a position to deliver solutions with speed.

Technology: After speed one of the greatest enabler in today’s business environment continues to be technology. Human Resource Functions has leveraged immensely by the effective use of technological tools. It has enabled the HR function to deliver consistent, effective and reliable solutions. Technology assists HR strategy and Business strategy in scaling up to great levels and organizations toady can’t conceive achieving its long term goals with out putting a healthy HR Technology in place.

Organizational Culture and Innovation: Innovations drives the future growth potential of organization and HR plays the most critical enabler in setting the context for a culture of Innovation.

Studies show that with competition getting intense, HR is a primary driving force behind organizational change and technical innovation. Innovations in organizations are function of the culture.

Deal and Kennedy (1982) argue that culture is the single most important factor accounting for success or failure in organizations. They identified four key dimensions of culture:


1. Values – the beliefs that lie at the heart of the corporate culture.

2. Heroes – the people who embody values.

3. Rites and rituals – routines of interaction that have strong symbolic qualities.

4. The culture network – the informal communication system or hidden hierarchy of power in the organization.

Human Resource functions and philosophy of an organization lay the foundation of the healthy and supportive culture. Innovation and organizational culture is the biggest differentiating factor when it comes to be flexibility of approach and responsive to the changing environment.

With this context one can assume that Human Resource functions is the most critical function which will play the most important role in ensuring that organizational not only stay ahead in the war for Talent but also play the strategic role in achieving the business objectives.

3 comments:

Bruce Lewin said...

I've often felt that the ability to bridge the gap between macro (values, processes, cultures, departments etc.) and micro (my immediate colleagues, my boss, the new team, what matters to me etc.) is key in terms of engagement and all related HR ideas. If expressed in terms of quantative or qualitative, such an approach is key to moving beyond parterning in my mind

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