An organization has at least two levels of strategy: overall and functional.
Among the key functional strategies is the human capital strategy. It
is fundamental that functional strategies—human capital included—must
support the overall strategy. (See, F. David, Strategic Management, Prentice
Hall, 2001.) But, simplicity stops there, since there is little, if any,
guidance available regarding how to understand an overall organizational
strategy in human capital terms.
What are the key elements of an overall strategy from a human
capital perspective? Overall strategies must speak to an organization’s
differentiation in three key areas: financial, customer and cultural.
These represent the three key stakeholder groups—shareholders, customers
and employees—which cooperate to create the organization in the
first place. There must be strategies, even if not everyone is conscious
of them, which attract, retain and engage all three of these constituencies.
How can strategy in these three areas be understood in human
capital terms? Each strategic choice, when implemented, calls
for the organization to behave in a certain, special way. And, in behavior
is where the human capital strategy lies.
Using a management competency system (Competency and Behavior Systems
are discussed separately.), one can prioritize the top competencies for
each of the three strategic areas: financial, customer and cultural. For
an organization to succeed, typically, it must be good in many management
competencies, but it can competitively differentiate itself by being great
in the three most supportive of it overall strategy.
Are there any models available, matching organizational strategies
to management competencies? Yes, on the following page is the
“Business Strategy/Management Competency Vertical Alignment Matrix”
which matches ten business strategy choices to ten management competencies.
It enables organizations to follow a disciplined approach in prioritizing
strategic management competencies.
Once these competencies are identified, human capital processes can
be imbued with these strategy supporting behaviors. In other words, organizations’
recruiting, selection, training, evaluation and compensation processes
can be built to find, support and develop these behaviors. This alignment
of human capital processes is referred to as horizontal alignment. (Horizontal
Alignment is discussed separately.)
STARway Service uses a statistically studied competency and behavior
system, prioritized to an organization’s unique strategy, to create
employment selection and employee assessment processes.
To find out more, please send an e-mail to contact@starwayservice.com.
