CAN HUMAN CAPITAL BECOME STRATEGIC AND PROACTIVE?
INDUSTRY
4.0 has a new business paradigm – characterized by speed, innovation, short
cycle time, quality and customer satisfaction. The torrential winds of change brought about by Industry 4.0 are both a
challenge and opportunity for the HCM profession. Cynics may speak of the decline of the HCM function; yet the champions of HCM see a vibrant rejuvenated version to match
the challenges of Industry 4.0.
HCM is an upstream
of corporate strategy but aligning it to the corporate planning process is a
delicate and complex process.
·
Drawing the terms of reference where the HCM function makes a strategic
shift
·
Outlining a role for HCM in the gamut of corporate planning and execution
The people
management function over the years has seen four phases of deliverables:
Ø OPERATIONALLY REACTIVE
(administrative efficiency the mentality of an office administrator )
Ø OPERATIONALLY PROACTIVE (functional excellence to “toe
the line” aiming at problem prevention ).
Ø STRATEGIC HCM
(where systems and best practices are rolled out with a
trial and error approach )
Ø BUSINESS CENTRIC HCM (where the realities of the
marketplace decide our agenda.) In the
fourth phase of maturity the prime
issues are:
·
Does HCM respond proactively to the early warning
signals of the business environment?
·
How does our execution excellence at its best to benchmark
with the competitors or industry members’?
·
Does
HCM add to the talent inventory organization capabilities to go ahead of the competition?
Michael Porter the Guru of
Competitive Strategy says “… Highly successful organizations are those that conceptualize how to differentiate
themselves from competitors, not just replicate best practices…”The
primary source of production in our economy has shifted from physical to
intellectual capital. So technology in the form of machinery and equipment is not the
differentiating factor. Ability to use
it effectively is.
One of the ways
surely could be leveraging human capital
by the superior quality of people and work culture. HCM champions
may loudly claim that the quality of
people is the cutting edge of the company’s competitive strategy. . Various
studies show that up to 85 percent
of a corporation’s value is based on intangible assets. Strategic assets in the new age
economy are a set of capabilities and
resources intrinsic to an organization ; which
create a lasting competitive
advantage difficult to imitate HUMAN CAPITAL IS THE
FOUNDATION OF ALL BUSINESS VALUE CREATION
Research reports say hi-performance
companies adopt progressive people management practices very quickly as
different from low performance companies with archaic people management systems. Winning companies who embrace the
HCM 4.0 Model devote considerably more resources to HCM strategic agenda. Indeed, the most
striking difference is the vision of leaders to make the system comprehensive and not a patchwork quick-fix
job.
DRAFTING
AN ACTION PLAN
HCM
4.0 is system embedded within the larger
system of the firm’s strategy implementation. Hence managing and measuring
the relationship between these two systems is the crux of performance
excellence. This new paradigm can mark the beginning of a golden age of HCM.
The reality is organization at times thunderstruck by unprecedented challenges.
Special HCM capabilities are needed to face
the dire challenges of rapid growth; expansion across geographies ; turmoil by
mergers, acquisitions, or joint ventures to integrate different organizations’
work systems. There is scarcity of talent in mission critical positions. These
organization problems are the
very opportunity for HCM to prove it
worth!!!
Human
capital management perceived two decades ago as a strategic initiative has now
got to be ingrained in strategic
business processes. HCM 4.0 must
be more engrossed with longer-term people issues and macro-concerns about
structure, quality, culture, values, commitment and matching resources to
future need. The CHRO must consider those HCM attributes that are crucial
to the implementation of your firm’s competitive strategy.
So HCM 4.0 is not merely the adoption of appropriate HR
policies and practices but also the way in which these practices are deployed. Thus HCM 4.0 secret
formula is…. work processes and capabilities which cannot
be duplicated or copied by rival firms. The reality is the quality of
people differentiates the winners from the losers in the business- technology
can be copied but the processes of implementation is the real cutting edge of
competitiveness. The HCM 4.0 stellar
role is to combine the talents of
employees like an orchestra conductor and be agile to use it to glean market
opportunity with maximum efficiency.
FINAL WORD
HCM as a function has the privilege of being one of
the only functions to touch every part of an organization, from the highest
authorities in the board to people on the shop floor. Every change is achievable only through a
proper planning followed by execution with respect to the organizational needs
and objectives. The HCM 4.0 new
role requires active involvement in all pre-planning work, which includes how
they are being executed, the impact they will have on the business, what is the
expected outcome and how can those successes be measured.
ith best wishes
Dr Wilfred Monteiro
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