Platt Perspective on Business and Technology

Human Resources and adaptation to change 7: in the context of lean and agile businesses

Posted in HR and personnel by Timothy Platt on February 28, 2013

This is my seventh installment to a series on business and marketplace change and on the impact of this on Human Resources as a department. And as a crucial part of that I also seek to delve into how an effective HR department and its functionalities in turn help to shape the business and its operational planning and strategy (see HR and Personnel, postings 137 and loosely following for Parts 1-6.)

I began this series by developing a baseline, standard model of a business and how Human Resources would connect into and support it (see particularly Posting 2 and Posting 3 of this series.) I then delved into a succession of complicating perturbations from that where a business might have to:

• Competitively operate in a very rapidly changing innovative industry and marketplace (Part 4),
• Operationally accommodate significant and even extreme shifts in headcount requirements (Part 5), or
• Meet due diligence requirements that arise when operating in several or even many national contexts, each with their own legal frameworks governing employee rights and other business law issues (Part 6.)

My goal for this posting is to at least begin a discussion of how a lean and agile business and its staffing and operational requirements affect Human Resources and how HR connects into such a business. As basic background material on lean and agile businesses per se, I begin this by citing:

• My 10 part series: Virtualizing and Outsourcing Infrastructure (at Business Strategy and Operations, postings 127 and loosely following),
Developing a Business to be Both Lean and Competitive, and Some Thoughts on What That Means, and
Strategic Planning and the Process of Strategy 7: keeping a business strategically young and agile.

For purpose of this discussion, I focus on lean and agile as structurally and operationally small and simple, and with anything that is not essential to directly maintaining core competitive strength, either outsourced or done without. In an extreme case, lean and agile can mean outsourcing essentially all HR functions, which obviously deviates from the model presented for baseline comparison in my stable business in a static marketplace model of Posting 3. Here, I assume that at least some core HR processes and recordkeeping capabilities are effectively maintained in-house, even if that means storing personnel and related records in the cloud but with direct in-house access-control and oversight.

• Then the primary question that I would start this type of systems analysis with is that of determining precisely which HR and personnel functions and operations would be considered core and kept in-house, which would be maintained but through outsourced service providers, and which might simply be dispensed with,
• And how would this balance change as the business grows and evolves, and according to what strategic considerations?

I have already been discussing prioritization as to what to keep in-house and what to outsource in HR functionality in general, in my series: When and If it Might Make Sense to Outsource Human Resources (see HR and Personnel, postings 134 and loosely following.) My focus here, is that whatever the balance of functions to in fact keep in-house, outsource or dispense with, this has to be considered as a significant part of overall business strategy and planning, and in ways that support both ongoing prioritization of tasks and goals, and the business model in place. And this is a type of consideration that can and will change with time, and in accordance with basic due diligence needs. So in the lean and agile business, Human Resources has to show a systematic flexibility that would not be needed in a more settled business.

I am going to continue this series in a next installment, there considering the across the board perturbations and differences from the normal and baseline that change management requirements bring – in how they impact upon Human Resources policies and practices and decisions made, and on how HR in turn influences overall policy, strategy and business execution. Meanwhile, you can find this and related postings at HR and Personnel.

An addendum to Part 6 of this series:
As a final thought here in this posting, I want to go back to Part 6 and its discussion of HR in the multinational setting, to add an addendum. When I wrote that series installment I focused on worker’s rights and related due diligence issues where across the board consistency and uniformly demonstrable fairness are of paramount importance. While writing that, however, I kept thinking about a second type of issue too where diversity and systematic protection and even encouragement of differences are equally crucial. When a business has offices and staff dispersed across a range of countries, each with its own languages, cultures and customs it is important to both allow for and support this diversity. This is more than just permitting differences in dress code, or acknowledging differences in when legal holidays would be observed – as important as those points can become and certainly if they are not allowed for. This is also about differences in the way employees traditionally and by cultural orientation approach their managers and how their managers in turn lead and manage. This is about communications styles and approaches and how what works and well in one place and for employees from one culture might fail and badly if forced into the wrong context. So if the operational and strategic goal is that operationally and strategically important tasks be performed and priorities met, then allowance for differences in the How of employee and manager performance have to be allowed for and supported too. And this also provides a rich source of potential examples as to how Human Resources would differ in this setting than from the HR of the baseline model businesses of my earlier postings. Both sides of this coin, in maintaining overall consistency and supporting ongoing diversity and differences are equally important and the trick in this, that has to be strategically and operationally established as ongoing business practice, is in knowing which is which and which should be which.

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