1. LINKING CORPORATE STRATEGY
AND HR STRATEGY
Presentation Authors:
Mr. Smit Dave
Mr. Vishal Acharya
Mr. Avdhesh Kaushik

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. Main Course Menu
Corporate Strategy and HR Strategy

Aditya Birla Group

RPG Group

Tatas

Infosys

Cisco

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. 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. 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. - 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 !!!!

10. •
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 !!!

12. Cost Leadership Strategy
v/s
Differentiation Strategy

13. •
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”

14. •
Rough Patch in 1980’s initiated major organizational transformation
•
Ownership
•
Involvement
•
Decision Making
•
A culture of openness & Transparency

15. 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

16. 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 'India's Best
Companies to Work for'

17. How to link both effectively ?
Ownership Empowerment Involvement

18. Linking HR Strategies and Practices to Strategic
Requirements:
5-Point Agenda for HR Professionals

19. 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

20. 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

21. 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

22. 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

23. 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

24. Solutions
•
Created 'Maitree', an organisation within HR. It's 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

25. Solutions
•
Nominations of star in projects
•
Gems points to trade points for products
•
Best healthcare benefits in the industry
•
Understanding cultural nuances

26. Solutions
•
Created 'Maitree', an organisation within HR. It's 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

27. 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 &

28. Aim
Create partners and not workers

29. 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 Markets
Source: Based on Wolfensohn framework and Cluster Pulse experience.