Speaker 1

Unit One Strategy Welcome to Unit 1. Throughout this unit, we will explore the
components comprising the CKE competency strategy. Strategy includes the cluster
of competencies related to the ability to act strategically at the organizational,
business, and the HR function levels As we make our way through Unit 1, we will
look at strategy from an HR perspective, understanding corporate and business
strategy, and understanding the kind of HR programs and policies you can put in
place as you develop those strategies. Naturally, while you may not be totally
involved in the development of the HR strategy or a corporate or business strategy
It is nevertheless important that you have an understanding of what strategy is and
how to apply it from an HR perspective This unit is designed to help prepare you to
answer questions in the strategy section of the CKE exam. In this unit, we will
identify the environmental factors that influence strategy and focus on formulating
HR strategies within the organization that are informed by those factors. We will
touch on the importance of maintaining awareness of broad economic, societal,
technological, political, global, and demographic trends And formulating strategies
that take these into consideration. Executing HR strategies that enhance the value
of HR resources within the organization and directing HR activities towards the
implementation of a business plan. Similarly, we will explore concepts regarding
Establishing and maintaining your understanding of the organization's mission,
vision, values, and goals, the application of sound business practices in carrying out
the HR function, Participating with other business leaders in the development of an
organizational strategy, directing the HR function towards realizing the
organization's vision and goals. and gaining a comprehensive understanding of the
organization's strategic plan Then, we will assess variances between the current HR
practices and those required to achieve the organization's strategic plan. We will
cover how to develop potential tactics to achieve those desired HR practices
Establish a work plan that prioritizes the most effective steps to achieve the HR
practices, and manage your HR Practices work plan. Ensuring that the strategic
goals of the organization form the benchmark for success. In addition, we will also
examine the consideration of governance in the development of HR strategies So
let's begin. Module 1. In this first module, we will attempt to answer the following
important HR questions. What is strategy and what is HR's role in developing it? Is
HR really a strategic partner? How does an HR professional shape corporate and
business strategies? Does HR really lead change? How can HR programs and
policies be aligned with the business? As we move forward in this unit, it is
important to note that every company has a different definition of strategy based on
its goals and objectives. What one organization may hold true about strategy may
not necessarily hold true for another company. Even within the same industry. Let's
begin with a definition of strategy. Strategy is an organization's declaration of
intent. It includes the formulation of organizational missions, goals, objectives, and
action plans for achievement that explicitly recognizes And that's important,
explicitly recognizes the competition and the impact of external and internal
environmental forces. For example, if we looked at two competing organizations in
the manufacturing sector, one might have a strategy to compete on price and to
grow through acquisition. while the other may compete on customer service and
might look to grow by expanding geographically or by adding related products and
services In establishing these strategies, they may engage in an environmental
scan that takes into consideration a variety of external factors like the strength of
its competitors, trade barriers, the availability of technology, domestic and global
economies, and or environmental cultural and societal factors that may influence
the demand for their products and services, or the methods used to produce them.
They may have also taken into consideration internal factors, such as their current
structure, financial sustainability, and the capability of their people. The outcome of
their environmental scan will ultimately impact how the organization moves
forward. You can imagine how competing on price versus quality might influence
your organization's culture and or the kind of skills required of its people. This in
turn will impact a variety of HR practices, such as recruitment and selection.
performance management, and possibly even job and organization design. For
example, performance metrics and core competencies would likely be very different
in these two organizations. Similarly, growing through acquisition, as opposed to
expansion of products and services, will also impact the HR department's plans and
priorities, not to mention the organization's culture. The key, once again, is the
importance that is placed on being cognizant of both external and internal factors
that impact the organization, the strategy it adopts, and the way in which HR is
delivered. There are a number of people andor groups that have a vested interest in
the organization's strategy. They are called key stakeholders. The top of the list
includes the owners or the organization shareholders, as it is their investment that
has enabled the company to exist. It also includes the board of directors, who are
responsible for the high-level oversight of the organization. The board concerns
itself with the workforce implications of different strategies. including outsourcing,
restructuring, and mergers and acquisitions of other organizations. They are also
concerned with the Senior Leader Succession Plan The organization's leaders and
managers are responsible for executing strategy and for the organization's overall
effectiveness. They are likely interested in such things as workforce planning and
performance management. Supervisors are also key stakeholders As they are
charged with ensuring that the right people are recruited, selected, trained, and
compensated Employees have an obvious vested interest because the
organization's strategy will shape their career opportunities and will also determine
the kinds of HR programs, compensation, and benefits that they are to be provided
with. An organization's strategy will influence a candidate's decision to join the
company. Unions may be a key stakeholder if, of course, the organization is
unionized For example, an organization strategy will impact the clauses it
negotiates into a collective agreement. It is equally possible that Simply being
unionized could, in and of itself, impact the organization's strategy as well. For
example Organizations may find it to be advantageous to be unionized when trying
to secure government contracts In addition to these primary stakeholders,
suppliers, customers, and the community have vested interests in the organization's
strategy, as the strategy will impact the nature of their interactions and
relationships with the company. We are now going to consider a couple of important
terms and definitions. The first is strategy formulation. Strategy formulation is the
process of conceptualizing the organization's mission, identifying its strategy, and
developing long-range organizational performance goals. Strategy implementation,
on the other hand, refers to those activities that employees, managers, and you, as
an HR manager, undertake to enact the strategic plan in order to achieve its
performance goals. In effect, strategy formulation is the process. It's the act and
acts of creating long, mid- and short-range plans. Mid-range plans could span five
years. Long-range plans could be eight years. Short-range plans could be one to two
years.

It all depends on what the organization wants to accomplish and over what periods
of time. Similarly, strategy implementation could be termed the doing. Here, you
are enacting the plans you developed during the strategy formulation process and
are launching the projects, creating the work teams. in taking the actual steps
towards what you hope will be the realization of the organization's goals. There are
obvious benefits to strategy formulation and planning, but it is important that we
examine them specifically from an HR function perspective. First, it is important that
the strategy has clarity of purpose. This will help define what the organization wants
to achieve, where it is going, and how it is going to get there. This information will
be used to run the business, but it can also be used to create the organization's
employment brand. It will help define the kind of people you need as well as the
kind of HR programs that are needed to support their engagement. Strategy
formulation also ensures coordination across the various parts of the organization. It
will influence the responsibilities and accountabilities within each department and
most likely Shape the organization's structure. After all, the purpose of an
organization's structure is to coordinate workflow. This then leads to organizational
efficiency. But here too, everyone's definition of efficiency is different. So, you may
need to develop metrics to define what efficiency means at your organization. For
example, from an HR perspective, what would be an efficient recruitment process
Would it depend on the number of candidates interviewed prior to selection, or
perhaps the number of interviews each candidate must pass before being made an
offer? The metrics defining efficiency in this case would be quite different for a
seasonal organization hiring low skill temporary labor compared to an academic
institute seeking faculty members. When an organization has clear strategies, the
achievement of those strategies can also be tied to incentives. This ensures that
when the right things are being accomplished, they are being rewarded, and
therefore successful performance is being reinforced. This will impact the content
and nature of the organization's total reward system, and, depending on the
situation, may also impact the timing of the performance evaluation. Strategy
formulation can also be used to help identify the need to change. For example, if
the number of widgets produced per production hour is not sufficient to fill an ever
increasing number of orders, The organization may seek to introduce additional
work shifts, or it may perhaps consider introducing new technology that will further
require new training It could increase staff or it might seek to recruit employees
with new expertise. And finally When everyone knows the organization's strategy, it
is much easier for employees to contribute towards its achievement and in the
process develop their own careers. When creating strategy, it is important that
organizations keep in mind that there are three types of resources or inputs that
they can use to produce goods and services They are land, capital, and labor. Well,
the bottom line is always an important consideration for any company. The
combination of land, capital, and labor will shape where and how the organization
operates. In a capital-intensive industry, For example, machinery might replace
labor in order to maximize productivity and profitability. So How does the HR
professional facilitate the alignment of HR practices with the organization strategy?
There are three approaches. The first is to create HR strategy in support of the
organization's strategy. In this approach, the HR strategy is formulated after the
organization's strategy. with input from all areas of the organization. The second
approach is the opposite of the first In the second approach, it is the dynamics of
the labor force that actually shape the organization's strategy. For example Many
years ago, when I worked in a major oil company, it was quickly realized that there
was not enough engineers in Canada for the organization to achieve its then twenty-
year strategic plan As a result, the organization shifted its strategy. It partnered
itself with the Canadian universities and lobbied the government to increase skilled
immigration all with the hope of increasing the potential supply of engineers. This
approach to developing an HR strategy is used when the numbers or types of
employees available have a major impact on the organization's strategy, Location
andor future direction. The third approach recognizes that there is an
interdependency between an organization's business and human resource strategy
This is particularly true in industries where human capital has a high value.
Organizations that adopt this approach use an iterative approach to creating their
business and HR strategies as each influence the other. It is referred to as a
reciprocal relationship. This takes us to HR's role in creating and implementing
strategy. Is HR a strategic partner, or is HR only an administrative support
department? For HR professionals to have significant impact within their
organizations, they and their departments Need to be seen as strategic partners
who can align HR priorities with business strategy. That requires the ability to
engage in concurrent strategy formulation. Or in other words, the ability to
anticipate and analyze situations and develop strategy at the same time issues are
occurring. Moving forward, no matter what the business strategy is, ideally HR must
be a partner in the organization's strategic plan. It is also important that HR be seen
as having a flawless execution of the basics, including HR administration, as this
also impacts the department's credibility. To be a strategic partner, HR must also be
able to speak the language of all aspects of the business and develop strategic
metrics to show that HR is of value to the organization. Finally, it is very important
that HR professionals be able to understand risk, how to measure it, and how to
mitigate it. HR-related risk comes in many forms, from creating raised employee
expectations to ensuring legal and ethical compliance. By definition, employees are
dissatisfied if their expectations are not met. Therefore It is important to carefully
manage expectations and the communication concerning business and HR strategy.
Similarly, given the dynamic world we live in, successful business strategies must
also be dynamic. This leads to change and, if not managed properly, change can
lead to decreased employee morale. To that end, when managing change, it is
important to ensure some level of flexibility. Organizations that become overly
focused on pursuing their strategy can become inflexible and unable to respond to
the changing world around them. Complacency with outdated practices may also
result in holding on to practices that no longer serve the organization's strategic
direction. And finally, as mentioned earlier, compliance with legal requirements and
ethical practices must always be ensured. HR professionals and leaders become
valuable team players when they can accomplish, manage, measure, and report on
all these things. Which means supporting the business strategy even when they
may not fully agree. They become effective collaborators with other organization
leaders by influencing the business strategy. and allowing it to also influence the HR
strategy. And they become important change agents who contribute to the ongoing
success and evolution of their organizations.