Maintaining a Competitive Advantage
Any competitive advantage enjoyed by an organization tends to be short lived because other companies are likely to imitate it. This is as true for HR advantages as for technological and marketing advantages. For example, many high-tech firms have “borrowed” reward programs for key scientists and engineers from other successful high-tech firms. The challenge from an HR perspective is to develop strategies that offer the firm a sustained competitive advantage.
For instance, a company may develop programs that maximize present employees’ potential through carefully developed career ladders while at the same time reward them generously with company stock with strings attached, for example, a provision that they will forfeit the stock if they quit before a certain date.
Reinforcing Overall Business Strategy
Developing HR strategies to support the firm’s overall business strategy is a challenge for several reasons.
First, top management may not always enunciate (set something out clearly and precisely) the firm’s overall business strategy.
Second, there may be much uncertainty or disagreement concerning which HR strategies should be used to support the overall business strategy. In other words, it is seldom obvious how particular HR strategies will contribute to the achievement of the organizational strategies.
Third, large corporations may have different business units, each with its own business strategies. Ideally each unit should be able to formulate the HR strategy that fits its business strategies.
Avoiding Excessive Concentration on Day-to-Day Problems
It takes considerable effort to detach oneself from current events and past history and trace a master plan for the organization’s future direction. This is particularly true in many small companies, whose staff are always so absorbed in growing the business today that they seldom pause to look at the big picture for tomorrow.
Alan Blazar, president of Blazing Graphics (a small graphics production company in Cranston Rhode Island) believes that crafting a mission statement is a very helpful. Process in that it makes you sit back and focus on things outside the day-to-day filling-the-order kind of mentality.
Developing HR Strategies and Unique Organizational Features
No two firms are exactly alike. Firms differ in history, culture, leadership style, technology and so on. The chances are high that any ambitious HR strategies or programs that are not molded to organizational characteristics will fail.
Here lies one of the central challenges in formulating and developing HR strategies: creating a vision of the organization of the future that does not provoke a destructive clash with the organization of the present.
Coping with the Environment
A major challenge in developing HR strategies is crafting strategies that will work in the firm’s unique environment to give it a sustainable competitive advantage.
- Fashion Designing
- Food Processing
- Medical Providers
Securing Management Commitment
HR strategies that originate in the HR department will have little chance of succeeding unless managers at all levels including top executives to support them completely. To ensure managers’ commitment, HR professionals must work closely with them when formulating policies.
Translating the Strategic Plan into Action
Cynicism regarding the strategic plan is practically when a firm experiences frequent turnover at the top, with each new wave of high-level managers introducing their own freshly minted strategic plan. Perhaps, the greatest challenge in strategic HR planning lies not in the formulation of strategy, but rather in the development of an appropriate set of programs that will make the strategy work.
Combining Intended and Emergent Strategies
When based on a rigorous analysis of where the organization is and where it wishes to go, intended strategies can provide a sense of purpose and a guide for the allocation of resources. Intended strategies are also useful for recognizing environmental opportunities and threats and mobilizing top management to respond appropriately. On the downside intended strategies may lead to a top-down strategic approach that squashes creativity and widespread involvement.
Strategic HR plans must be flexible enough to accommodate change. A firm with an inflexible strategic plan may find itself unable to respond to changes quickly because it is so committed to aparticular course of action. This may lead the organization to continue devoting resources to an activity of a questionable value simply because so much has been invested in it already.