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Business Strategy

HR practices that support your organization strategy

HR Practices That Support Organizational Strategy

By Business Strategy, Recruitment

When you think of purchasing something, do you go to the store with the lowest cost products or the one with the most unique ones? Or perhaps something in between? Looking for value and quality.

Each of the stores you chose has its own competitive edge. They have developed a strategy based on their competitive advantage and the market they want to serve. To succeed, these businesses must be clear on their strategy and hire people with the right skills to support their strategy.

Michael Porter's generic strategies .

Graph explaining the four generic strategies that Michael Porter* put forth.

Business and strategy guru Michael Porter categorized organizational strategies into groups.  These strategies work for all businesses irrespective of their size and nature of the operation: differentiation, cost, differentiation focus, and cost focus. Those competing in a broader market are leadership and those with a niche market are focused. They each serve very different customers and have different processes. To support this, they must hire and train the right skills to drive their success.

Differentiation Strategy:

Differentiation is about offering a unique product. A business that has a different product or service as its competitive edge develops a differentiation strategy. This business provides a product that is either not available in the market or has more to offer than what is available.

Such an organization has a culture of creativity and innovation. To be successful, this culture should be reflected in its people. Its people require a range of skill sets. They should be pro-active, self-driven, and empowered to work on their own.

The hiring strategy will focus on recruiting for diverse skill sets. They practice a flexible approach to talent recruitment and job definition, so they hire and nurture talented and creative people, empowering them to be innovative at work. The focus is more on skill sets such as creativity, innovation, being proactive, self-motivation, and risk-taking. With autonomy comes accountability. These organizations reward new ideas and provide support for the employees to implement their ideas. The individual contributions support the organizational differentiation strategy. Learn how to resolve conflicts to support strategy

Cost Leadership:

For organizations focused on cost leadership, their competitive edge is providing the products at the lowest cost. Customers buy their product or service knowing they are paying as little as possible. Here, the success mantra is to increase profits by reducing input costs and charging lower prices while betting on volumes. Such businesses need people with general skills, with the ability to work efficiently and follow instructions well.

To ensure efficiency and low cost, such organizations must build detailed processes and have specific job descriptions aligned with such processes. There is little room for creativity and deviation from the well-defined efficient processes. Investing in a strong recruitment process will reduce the overall cost and ensure a higher retention rate. Similar to other operational processes, HR processes are well defined and efficient in such organizations as well. Automation and technology-driven selection process would be a popular practice in such organizations.  The job descriptions are very clear, and candidates are hired based on exact specifications. This recruitment process is geared to speed up the hiring process, where people can be replaced quickly and easily while keeping the cost low. The focus on selection is process efficiency and productivity rather than creativity.

Focus strategy:

Focus strategy is applicable when an organization is focused on a niche market. This could be differentiations focus or cost focus.

An organization that uses focus strategy pursues a particular ‘niche’ market, by offering niche products and services. It could develop a differentiation focus strategy by offering exclusive products serving a market that values such exclusive products. Or it could develop a cost focus strategy by focusing on a niche customer base with low-cost products. They build good brand loyalty because they are focused on specific markets, serving specific customers.

These organizations must hire people who are observant of the market trends, industry, and matters that drive the business.

The recruitment practices will focus on a great understanding of the niche market they are concentrating on and must be flexible enough to get the right talent but robust enough to be able to manage the turnaround quickly, to keep high-quality customer service. The talent pool may be smaller for these organizations as understanding the market is more essential than an organization with a broad audience.

The recruitment process for a cost focus business will focus on getting people with a research bent of mind, who are budget-conscious who understand the value customers in the niche market are looking for. The focus is to increase loyalty and trust while working towards lowering the cost of supplies and operations.

People in a differentiated focus organization require skills to understand the needs of customers and be creative to meet their needs. The recruitment process will focus on getting people with excellent analysis and customer service skills, as well as those who are proactive and inventive to meet the niche market requirements. Learn about our conflict resolution training

There is no one-size-fits-all when it comes to recruitment and selection for different organizations. The strategy will impact the practices. However, most organizations do develop their talent and provide them with the right tools and knowledge through their customized training. To develop high-performing employees, it is essential for organizations to provide the right training to their employees enabling them to support the organization’s needs.

Employees are at the core of each organization, and they should be equipped to perform based on the business strategy for it to succeed. People can be aligned seamlessly when they have the right skills and competencies to work in alignment with the strategy.


Aligning people with business strategy.

By Business Strategy, Consulting, Education, People, Performance, Training

For a business to succeed, it first needs a vision. Then comes strategy, which articulates the vision and provides direction for growth and performance.

A good business strategy aligns people and processes to drive performance. Alignment of different functions of an organization are essential for its success. At the heart of it is the organizational most important asset: its people.

Let’s focus on aligning people to strategy as it is the foundation for success.

People are the most important resource for an organization to achieve its objective. For people to perform well they need to feel connected, valued and motivated by the organization. Having high level of job satisfaction and commitment will result in organizational high performance.

For an organization to attract, foster and retain the best employees, it needs to align all of its Human Resources practices with the organizational strategy. Depending on the culture of the organization, the requirements of the job and the overall organizational strategy different Human resources management practices are required.

Committed and motivated people mirror the values of a business and its success. This intricate connection provides the best reason for a business to do everything possible to keep their employees aligned with its strategy. And be aware that talent is agile and mobile. It is always looking for fulfillment, growth, and recognition. To retain it, nurture it.

Here’s is a checklist to see if your business strategy is aligned with your people:

  • Are you utilizing your employees potential in your organization?
  • Do you have long term employees who are excited to work for your organization?
  • Are your employees your brand ambassadors?
  • Do your employees demonstrate the highest standard of customer service?
  • Do your employees work well as a team?
  • Do your employees initiative change to improve your organizational performance
  • Do you have a high degree of employee satisfaction and commitment?

Aligning people and strategy is by no means an easy and quick job. It required alignment between many functions. To do so a thorough analysis of the organizational strategy, current practices and ideal practices is requires.

People alignment and business strategy are not two distinct elements. They are intricately woven and must work in tandem to succeed. Here are a few areas you need to consider for a successful alignment.

5 things to achieve alignment between people and strategy

Recruitment and Selection

After an organization identifies the talent gap, the first step is recruitment and selection to close that gap. Recruitment starts with identifying the need for a new talent and ends with receiving qualified applications. Once the applications are received the selection process starts to identify the most qualified candidate who will succeed in the role. This process is guided by the organizational strategy.

Rewards and Compensation:

Once the right candidate has been identified, your organization needs to make an offer with the appropriate compensation to attract the candidate. Understanding different dimensions of compensation and adjusting it based on each employee’s needs is an important part of attracting the right talent. Further the compensation should be aligned with organizational strategy to drive the right behavior.

Performance appraisal and feedback

After an employee starts to work in the organization, the need to receive feedback on their performance. Everyone needs that pat on the back and it is critical for an organization to have a process to recognize individuals contribution. Further there are may ways to set goas for employees and hold them accountable to perform. Individual’s performance must be aligned with organizational goals and objectives.

Training and Development

Although most employees have completed the training and education necessary to qualify for a job, learning is an ongoing journey. In early stages the organization must provide job specific training to support the new employees’ performance. There after it is the responsibility of the employee and the organization to establish developmental plan for the employee to acquire skills necessary for the next role. This process is driven by the organizational overall strategy and vision.

Mentoring and empowering

For employees to succeed and thrive they need organizational support. Having a mentor or even a ‘buddy’ provides a sense of security for employees. For the mentors, it is the sense of achievement, fulfillment. For the mentee, it provides reassuring support because they feel that they have someone who can guide them and steer them in the right course. Furthermore, employees need to be empowered to develop the leadership skills necessary to succeed. This program has to support the organization strategy. By having the right guide, right from the start, the new hires get to understand and work with the strategy.