For your organisation to thrive in the face of disruption, bold realignment will be necessary, writes Saïd Business School’s Jonathan Trevor.
Out of the disruption stemming from the global COVID-19 pandemic comes a rare opportunity for established businesses: to change the fundamentals of their enterprise for the better, and in ways that might not ordinarily be possible or palatable. Whether your organisation is a commercial, public-sector or social enterprise (or a hybrid of all three), the question to ask is “what should be different (potentially radically) about it and its talent to ensure it is equipped to succeed in the long term?”
All leaders should adopt a strategic approach to aligning their organisation over the short and long term. Strategic alignment is where all elements of an enterprise – including its business strategy and its people – are arranged (and rearranged) in such a way as to support the fulfilment of its purpose.
These and other elements form an enterprise value chain, which is only as strong as its weakest link. While a business’s purpose is its enduring ‘north star’, other links in the value chain are dynamic and should change in step with the external environment, especially in times of disruption.
Misalignment between an enterprise’s business strategy and its talent limits its performance
Considerations for talent leaders
There is no universal, one-size-fits-all prescription for effective talent management. When realigning their organisation for the long term, talent leaders should be guided by their unique circumstances, plus the two fundamental principles of vertical and horizontal alignment.
1.Vertical alignment. Vertical alignment refers to the degree to which the enterprise’s valuable organisational resources and functions, including talent management, support its business strategy. For instance, what are the talent requirements (in the form of employee behaviour, skills and knowledge) of your business strategy over the next five to 10 years?
Strategies maximising economies of scale (selling as much product as possible at the least possible cost of operation) require very different employee attributes to, for example, a strategy emphasising customer responsiveness and customisation (even personalisation) of products and services.
Efficiency-based strategies typically require high levels of routine, close teamwork, intense productivity and error-reducing behaviour. By contrast, customer-centric strategies require people who are nimble enough to respond to different or changing customer preferences, who show a tolerance for ambiguity and who are self-starters, able to show initiative. Misalignment between an enterprise’s business strategy and its talent limits its performance. How are you trying to respond to the demands of customers and stand apart from competitors? What is the ideal form and function of your talent?
2.Horizontal alignment. Horizontal alignment refers to the degree to which an organisation’s talent – its core human capital – is integrated with other valuable resources. For instance, how well is your talent strategy integrated with your technology strategy?
Beyond the automation of routine tasks, advanced artificial intelligence will be used, increasingly, to augment complex non- routine and cognitive tasks that were previously solely performed by humans. Different functional strategies and capabilities – from HR (human capital) to real estate (physical capital) and operations (organisational capital) to informational technology (technological capital) should complement each other as much as possible. Together, they support the development of a business’s core capabilities, allowing it to implement its strategy effectively.
However, in reality, functional strategies often collide due to fragmented working, cross-functional ‘turf wars’, competing assumptions and the absence of shared strategic direction. The result is to introduce harmful misalignment into the engine room of your enterprise. How well aligned are your corporate functions? How well does your talent strategy support your organisation’s technology strategy and vice versa?
Be bold
Of course, diversified enterprises with multiple lines of business may require more than one talent strategy. Each needs to be vertically and horizontally aligned to be fit for purpose. Talent leaders should segment their human capital – their talent – to the same degree as their colleagues in marketing segment their customers.
Times of upheaval often result in significant change and in new ways of doing things. Some organisations will always emerge from severe disruption stronger than others; some will even emerge stronger than they were previously. Where they do, it will be because their leaders have embraced change and envisioned how to realign their enterprise to enable it to thrive in the future.
Originally published in Catalyst Magazine The 'Dexterity' Issue.
