A few weeks ago I had the opportunity to participate in a round table, organized by ABG Personas within the HR Int’l Meeting, discussing about “The impact of the current CONTEX on the ORGANIZATIONAL MODELS used to manage INTERNATIONAL business. And the role of HR”
I was very glad for the invitation and excited for the topic. It seemed very suitable and a real hot topic to me, because it was:
An invitation to re-consider ORGANIZATION as a KEY area of Competence and Responsibility for the HR function. If HR really wants to get out of that hiding place in the Back Office, with its transactional activities for functional support to management (very important, but just administrative), must be placed squarely into the discussion about Business and Organization.
An invitation to CONTEXTUALIZE. Today more than ever, one organizational form-fits-all-context does not exist anymore. But, we have to be aware that, by doing this, if on one hand it makes us more effective and more impactful, yet on the other it raises the complexity of management more and more.
An invitation to consider the MULTI-Country management model, as opposed to the International, Global or Multinational one. And this pushes us to rescue the concept of GLOCALIZATION, developed in the 80s by Japanese multinational companies and applied initially, and only, to marketing and commercial strategies. But it also leads us to rescue the theory of TRANSNATIONAL ORGANIZATIONS, in contrast to the Multinational, Global or International Organizational models. I consider this model, as we will see later on, very appropriate and useful as a frame to operate in the PLATFORM Economy.
Implications of COVID-19 on HR Management
I’d like to avoid any reference to the impact of COVID-19, but it would be weird.
Until roughly a year ago any conversation would have begun with “How is Digital Transformation impacting on ……” Today, and for a while, everything starts with “The Implications of COVID-19 on….” and in this case, on Human Resources Management”.
We have read and we will be reading a lot about this, therefore, I am not going too much detail in this subject.
What I invite you here is to give a glance to some IMPLICATIONS that this GARTNER study shows us (graph 1).
And from this study I’ve highlighted the implications that will allow us to create a link with the 3 CONCEPTS to reflect on:
The Importance of CONTEXT
The relevance of the PURPOSE
The centrality of the ORGANIZATIONAL FORMS in the deployment of the new Business Models.
The importance of CONTEXT is linked to the ever-greater role of Companies acting as “social protection”, understanding the personal circumstances of their employees. Know them, empathize with them, in short, HUMANIZING.
HOW the Companies have behaved, or how they have reacted to the crisis has brought to light HOW they REALLY ARE. Has defined them in their PURPOSE of being. And this is impacting on if and how they could be considered as anEmployer of Choice or as entities in which to invest.
The New Business Models are driving us to re-think the ORGANIZATIONof work, not only in its soft skills – behaviors, methods and cultures – but also in its hard competences – Organization, Structure, Processes, Roles and Responsibilities -.
From Human Resources, to
PEOPLE CULTURE and ORGANIZATION
I would suggest to re-define HR as PEOPLE, CULTURE and ORGANIZATION (PCO).
And I would summarize its mission in the following way:
Contribute to the deployment of the Company Purpose providing it with the most appropriate Organizational Capabilities to activate its Business Model, in each Context.
Between all the Competencies required for the PCO Area, here, I would briefly highlight 3 of them, and go deeper into one.
3 KEY COMPETENCES (among others) for the Area of People, Culture and Organization(graph 2):
PURPOSE based Management
CONTEXT based Management
ORGANIZATION based Management
1 PURPOSE based Management
Companies with a Strong and Authentic PURPOSE have (according to different researches):
b. Easier access to talent
Higher retention and engagement ratios
Higher contributions or performance of their team members
Greater loyalty from customers and suppliers
Better and sustainable financial results
But only the 62% of companies say they have a Clear Purpose and their employees think that only in 42% of cases it generates a certain impact. Forgetting that PURPOSE MAKES THE DIFFERENCE.
Is here where HR can and has to make a difference, by contributing to having the Organizational Capabilities that contributes to Activate the Purpose generating the Expected impact for all its Stakeholders.
2 CONTEXT base Management
If the Company Purpose is an aspirational framework to be considered as the North Star for the entire organization, its ACTIVATION and IMPACT must be leveraged and to be adapted to the CONTEXT (considered in all its components and all its complexity-graph 3)
Nowadays one-Strategy & Structure-fits-all contexts does not work anymore.
For International Human Resources Management,it is essential to rely on a network or platform of localized resources, in the different Countries / Regions, with a high degree of Commitment, Responsibility, Autonomy and Coordination to be able to locally optimize the activation of the Purpose using the with the most appropriate strategy and organization according to each context.
From an organizational stand point we will see more details here below.
But, in order to guarantee the connection of the company with each reference context its importance is pretty clear.
3 ORGANIZATION base Management
Back to the GARTNER report, presented here above, it shows us how today’s CONTEXT is accelerating the evolution or transformation of ORGANIZATIONAL Structures in order to better respond to the new level of COPLEXITY, to current challenges.
Beyond going into the detail of these new Organizational designs, there are some evidences to be highlighted:
A. When redesigning the responsibilities, priorities and knowledge for HR/PCO, we should regard Organizational Design as a key competence. And, beside the soft skills related to organization methodologies (agile, lean, etc.) and behaviors (new styles of leadership, etc.) we have to equip HR’s teams with the hard skills – Organization, Structure and Processes design.
This is why it would be appropriate to add to the profiles we traditionally have in HR, others with STEM background. I would love to see, right now, Engineers within the HR department. But I guess, it still be a long way to get there.
B. The high level of Organizational COMPLEXITY is not just due to the External CONTEXT; it also comes from within. Today 4 different generations, with different Habits and Behaviors are living under the same roof. From the Baby Boomers to the Generation Z (graph 4).
This is driving us to create Organizational environments that brings everyone together and takes advantage of this diversity. Therefore, we can confirm that one-organizational design-fits-all it does not work anymore. A Company will have an Organizational framework where different organizational structures and different management styles will have to co-exist..
C. And, we can dare to say that this common frame of reference is the PLATFORM ORGANIZATION. Because, if something is clear, is that: Economy is all DIGITAL and All of the Economy operates under PLATFORM structures (graph 5)
So, it is under this frame that we have to design our Organizations, always keeping in mind the idiosyncrasies of the different businesses and the management context.
What does this mean?
That within a Company we will have to manage, at the same time, conflicting organizational designs and styles of leadership.
TRANSNATIONAL ORGANIZATIONS: a conceptual digression
When we speak of International management, we often use International, global, multinational, transnational as synonyms.
It would be interesting to recall the main differences between these concepts. Because, they are not synonyms. And it becomes crystal clear when we look at their CONTROL systems and STYLE of MANAGEMENT(graph 6)
TRANSNACIONAL MODEL and PLATFORMS ORGANITATION
Distributed, specialized and interdependent resources and capabilities.
Large flows of components, products, resources, people, and information among independent units
Complex process of coordination and cooperation in an environment of shares decision making
But more than their differences, what catches my attention is how the TRANSNATIONAL Structures and PLATFORM ORGANIZATIONS have many common characteristics.
With a fundamental difference.
The relationship between all the parties involved is not of organizational control (employees) or shareholding control (subsidiaries), it is a collaborative contractual relationship based on the knowledge and services provided.
5 main PILLARS
TRUST: without trust, a meaningful relationship, conversation or interaction will not be possible.
The ORGANIZATION, in itself it is no longer seen or measured by its CONTROL system, rather it is like an orchestra where we create and manage interactions.
Its RELATIONSHIP system (interactions) in / out / partners is its main features. Company INTERATIONS are its visible structure.
Platforms allow us to access to COLLECTIVE KNOWLEDGE, a differential lever for innovation and business success
Last but not least, when we talk about PLATFORM we always mention TECHNOLOGIES. But from an organizational point of view, Platforms are an architecture of COLLABORATION CONTRACTS between all the parties involved.
2 fundamental CARACHTERISTICS
1 . They must have a CLEAR GOVERNANCE SYSTEM , in terms of: who is responsible for what, who decides what, who does what and, above all, WHO HAS THE VISION OF THE WHOLE and acts as the director of the ORCHESTRA.
2. And, they must always be endowed with DIFFERENTIAL and KEY CAPABILITIES. They do not rely on ROLES; they rely on Knowledge and Skills. That is why they are organic and adaptive structures that are molded and disassemble according to the resources needed to manage the different processes at all times.
ORGANIZATIONAL DESIGN is once again relevant and under the spotlight as one of the main enabler for the activation of the NEW VALUE CREATION MODELS based on PLATFORMS. HR has to seriously ask itself if it wants to be equipped with these critical Organizational Competences and so, be relevant!
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