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Nature’s Principles: Networks and their influence on HR Strategy

We are familiar with the fact that organizations are made of networks of relationships. What we rarely try to identify is what Fritjof Capra in his book  The Hidden Connection: A Science for Sustainable Living  calls “boundaries of identity and interaction” and how these can influence the success or failure of our HR initiatives.

So, what are these boundaries and how can we seek to unveil them within our organizations? Lets try to analyze them from the perspective of their effects. Have you ever been in a situation in which you had to reorganize, followed all the customary procedures to define who adds more value, who less, what positions you actually need and which seem superfluous? You then implement and suddenly find that the organization has lost some key component that had not been identified and things don’t quite work as expected. Giles Hutchins, in his book “The Nature of Business” says that:

“(…) in business, it is not always obvious which parts of the organization that are not overtly adding value are merely there for the ride, or are providing a subtle benefit unmeasured by the normal performance assessment process. Cutting dead wood from an organization in challenging times may be prudent, yet damaging a useful web of stakeholder relations in times when greater resilience is needed is not prudent.”

Understanding the subtle networks of relationships that exist within an organization can be an art. We also need to understand that these relationships are not static. Like Hutchins mentions in his book, “two organisms can have many different types of relationship over time, or even at the same time.”  Therefore our observation of the organization cannot be a one-time-only occurrence.

Social production as a new source of economic value creation

by Opensourceway

We need to establish our own networks and take every opportunity we have to observe and interact with as many people in the organization as possible and keep track of what we find. This will enable us to develop a map that overlays the organizational chart creating a picture that combines the formal and informal networks that exist. If someone moves from one position to another, that does not mean that the relationship they have with their former group ends, their influence is probably still there if there was a strong bond within the team.

Who are the people that employees mention when they are discussing examples of leadership? Who do they look to when they want to see what it takes to be successful? Who do they go to when they seek coaching? It is more frequent than not that these are not their direct managers unless they report into one of those great leaders that tend to be so few.

Who do employees identify with? Are there teams that have a strong sense of identity? What drives this cohesiveness? Is it the formal leader of the team or is there a team member that seems to be the driving force behind it? When there is a team that is viewed as a positive example, what we do to that team will also have an impact on the rest of the organization. If we eliminate it because the work they specifically do is not needed any more, what we are saying is that we do not value the principles on which this team operated. If, on the other hand, we figure out how to deploy the team to other work, we are reinforcing that this is the model we want people to immitate.

From the opposite perspective, are there teams that we have identified as being dysfunctional? What are the characteristics of the leader? What is the driver of the lack of identity? Can we identify a specific person that seems to be the disrupting factor? It has been my experience that most of dysfunctional teams lack good leaders. When I have been able to identify a team whose dynamics are negative, it normally correlates with managers that are “old school”, not on board with what the organization is now asking them to do, and frequently boycotting initiatives through sarcastic comments, or they are weak and unwilling to take charge and address the negative behavior of a team member.

A thorough knowledge of these networks, and the understanding of the organization dynamics that it provides, will provide us with vital information we need when we are developing our HR Strategy and programs. As I mentioned in “Why do HR Strategies Fail?”, we definitely also need to have a thorough understanding of the business strategy. Through our work to learn the business we can gain much of the knowledge we need and this will enable us to be attune to the subtle networks that influence what the organization can achieve.




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Why do HR Strategies Fail?

We put a lot of effort in designing what is supposed to be a great HR Strategy. A couple of years later we look back and have not achieved what we envisioned. What went wrong?

It is very frequent that we find ourselves implementing a great program (a new Talent Management process, a better Leadership Development program, an on-line Performance Appraisal system, etc.), we invest time and effort, and frequently a lot of money, and a few years later we find that we need to change it because it doesn’t work. Then we start looking for the next best program, we convince the organization that it is the perfect solution, we roll it out and a couple of years later we are again thinking of the next best thing. Where are we failing?

If we want to prove to the business that Human Resources can add value to the bottom line, we need to define a robust strategy that will strengthen the organization and help develop the engagement and talent that we will need to deliver the business strategy. Easy to say … but not so easy to do!

Gary Hamel: Open source is one of the greatest management innovations of the 21st century

By opensourceway

In my post “We need an HR Strategy – What about the Business Strategy?” I touched on the point that it was necessary to have all functions represented when defining the business strategy, including HR. If we are at the table with the business, we understand where the company is headed, what the challenges are and what will be required in order to achieve the business strategy, then we can start to work on our own strategy.

Are we growing? If so, how? Is it through mergers or acquisitions or is it through the introduction of new products or technologies? Is there a change in the business that will require different skill sets than what we have today? Are there economic threats that we need to prepare for? There is no specific set of questions, the only way to know what the gaps are is to be immersed in the business, know it in detail and work with your leaders to figure out the human aspects of what will be needed to sustain it.

We have to be careful not to fall into the trap of stating the HR Strategy as what it should not be. James W. Walker in his book Human Resource Strategy states the following:

“Some company statements of human resource issues are so broad that they could apply to any company and imply directional plans, challenges, or goals rather than the business-related issues. For example:

  • More effective utilization of our human resources
  • A more risk-oriented, high-performance organization
  • Managing a more diverse work force
  • Skills obsolescence”

He goes on to say that many times we define our “strategy” more like assumptions, and therefore miss the point which is to focus clearly on the issues that matter the most, the ones that will help drive the business strategy. 

In his book “The Nature of Business“, Giles Hutchins looks at the business of the future in the following terms:

“What could a firm of the future’s business vision look like? It could consist of the following aspects:

  • Strategic objectives where value and values are understood and interrelated.
  • Organizational culture rooted in well-being, diversity and clarity of purpose. One where individual and collective potential is encouraged through empowerment, local ownership and shared responsibility.
  • A business ecosystem where there is a sense of belonging to a community of stakeholders, each having clearly understood win-win synergistic relations within the diverse ecosystem.
  • Nature-inspired people, processes, products and places (infrastructure).
  • Reaching to attain positive holistic value (social, environmental and economic) for all stakeholders.”

I am not saying that all companies can relate to these, although more and more many organizations are including some of these aspects into their business strategy. If Human Resources is an active participant in the design of the business strategy, then we will be able to not only influence our leaders to think about these issues, but certainly it will be much easier to identify the components of our HR Strategy that will drive business results.

If you look at the list proposed by Hutchins, you can see that all of those are things that will help drive employee engagement. If we can develop the organization to think and act in those terms the only natural result will be a motivated and engaged workforce that will strive to achieve. And this can only deliver positive bottom line results.

So the key factor in ensuring that we develop a great HR Strategy is to carefully analyze the business strategy and extrapolate all the people aspects that we can influence. Then we need to assess where we are today and figure out the gaps. Only then are we in a good position to start defining what we will do to help drive the business.


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