1. (CHAP 7: HR VALUE PROPOSITION) SUPREET KAUR SAURABH PANDEY BUILDING AN HR STRATEGY

2. What is an HR strategy? Schuler and Walker (1990) define Human Resource Strategy (HRS) as "a set of processes and activities jointly shared by human resources and line managers to solve business-related problems".

3. Motorola :A perfect example Motorola’s experience illustrates the logic & process for developing a powerful HR strategy. During 1990s, the world of consumer electronics changed tremendously & the competitive space also became more crowded. This mandated operating efficiencies. This forced its HR leadership team to create a more powerful strategy to position it as a more effective competitor, link HR practices to stakeholders’ requirements & make its cultural capabilities consistent with it brand identity.

5. It defines the way people behave and determines what information people will accept, interpret accurately and adopt a useful knowledge. A firm whose culture cannot accurately perceive & interpret its environment & effectively translates those into employee behaviors will have great difficulty in staying in business. According to the HR competency study, the HR agenda with the greatest impact on business performance is a culture-based HR strategy.

6. FRAMEWORK FOR A CULTURE-CAPABILITY BASED HR STRATEGY TRENDS IN BUSINESS ENVIRONMENT BUSINESS STRATEGY CULTURE CAPABILITIES HR PRACTICES, POLICIES AND PROCESSES

7. HR STRATEGY DEVELOPMENT PROCESS The process involves 6 steps : Identify the organizational unit and organize the workshop. Prioritize the trends in the business environment. Specify the sources of competitive advantage and the measurement for each of them. Define the desired cultural competencies together with their behavioral expressions. Identify the HR practices that will have greatest influence on creating and sustaining the desired culture. Develop an overall implementation plan.

8. Step 1 :Identifying the organizational unit and organize the workshop Step 1 : Select the organizational unit for which the HR strategy is being developed. Step 2 : It should be the same that is target for Strategic Business Development. Step 3 :Send invitations for the workshop to the people who have an immediate interest in the results. Step 4 : Form groups of 12-24 people involving both HR professionals & line managers.

9. Step 5 : Ask the participants to gather the relevant information such as : Read 4 analysts’ reports about the company. Read 4 analysts’ reports about the major competitors. Read an article or two about high value-added HR practices. Tell the HR professionals to interview 2 or 3 line executives about the major competitive challenges facing the co. & the company’s weaknesses.

10. Step 2 :Prioritize the trends in the business environment. Have workshop participants address the following questions: What is going on in the economy? What is the demand for your products or services? What are your customers’ buying criteria? What is the nature of your relationship with your suppliers? How much competition do you face? What is the nature of your technology: product, process & information? How fast is the technology in your industry changing? What is your relationship with your regulators? What are your owners’ expectations?

11. Workshop process Brainstorm the external environment trends that influence your SBU. Identify the top 3 or 4 trends. Allocate 100 points among the trends. Report results back to the plenary group.

12. Step 3 :Identifying sources of competitive advantage and relevant measures 12 general areas can provide sources of competitive advantage : Innovation On-time delivery Convenience First to market Quality Cost Relationships Mergers, acquisitions and alliances Synergy Branding Distribution Service

13. Step 4 :Defining desired cultural capabilities & behavioural expressions Defining culture: A firm is best off with no more than 2 or 3 cultural targets or pillars. Some examples of firms defining their cultural capabilities in more rigorous ways : Disciplined risk-taking(Deutsche bank) Restless creativity(Unilever) Teams’ passion about winning(AstraZeneca) Resourceful agility(BAE systems) Customer-focused instruments(Texas Instruments)

14. Workshop process: culture specification Rearrange the workshop into new groups, assigning each one of the identified sources of competitive advantage. Prepare a list of words that most reflect the cultural capabilities needed to support that advantage. Select the 6 cultural capabilities &consolidate into 2 or 3 sets. Report out to the plenary group. Divide into new sub-groups based on the selected capabilities and do a gap analysis.

15. Workshop process :Scenario building Ask workshop participants to consider this question : how do you want people to behave I the future so that you get better results than you today? Most effective process : “behavioral scenario building” Illustration