This document discusses linking corporate strategy and HR strategy. It provides examples of companies like Nucor, Lincoln Electric, and McKinsey that have effectively aligned their business and HR strategies. Specifically for Nucor and Lincoln Electric, their cost leadership strategies were supported by HR practices focused on performance-based compensation. McKinsey's differentiation strategy is enabled by recruiting and developing top talent. The document also discusses how companies like TCS and Harley-Davidson have adapted their HR strategies in response to changes in business strategy.

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.