Business strategy
The business strategy aims for business excellence, which is a combination of horizontal and vertical teams providing strategy and planning and aiming for the ultimate goal of achieving the vision, mission and goals of the organisation. Human resource management planning is important in providing a strategy for an effective business plan. Business excellence can be achieved through a combination of human resource strategy and effective strategic planning. This is provided in the Kanji model, as described in figure 1.
Business strategy originated from war ideas. The original meaning and reference of strategy are about winning a war when it was first quoted from the Chinese philosopher Sun Tzu on the art of warfare (Wittmann & Reuter 2008). Now, the strategy is about winning the hearts and minds of the customers. The strategy is about business ideas, theories, and implementation of these theories – to sell a product or idea, earn profits and be successful in business. The new business concept is meeting the needs and wants of customers. This is as simple as providing a product that customers need and want to as complicated as going to the whole cycle of supply chain and determining how a product can safely reach the hands of the customers.
The main topic for this essay is the service-oriented business of recruitment and how this fragmented industry is able to serve its customers, in particular the UK customers. Few know how this business operates and how it has survived all through these past decades, except a handful of resilient and tenacious business-minded individuals who know how to sell, persuade, argue and close deals. HR and HRM and its strategic fit have been a problem for this growing industry.
Theoretical framework
The Kanji model to attain business excellence provides 4 foundational premises. First, various best practice models have to be emphasised in aiming for business excellence. Best practice can follow total quality management (TQM) principles. Quality management does not necessarily mean implementing ISO standards but in giving importance to the concept and context of quality according to the organisation’s definition of quality.
Second, attaining business excellence is a very important aspect of fulfilling the company’s vision and goals. Third, the process of attaining business excellence gives the management the chance to examine the organisation holistically, with a primary focus on the whole organisation and the project team. Finally, members of the team will try to do their tasks well, such as recruiting the best candidate for the job (Briggs & Keogh 1999). Organisations have to answer the demands of the times while working in a challenging internal and external environment.
Human resource management
Managers of high-performing firms believe that they can only decide HR’s main concerns if they do have a deeper understanding of the relationship between business strategy, the company and employees. Put it another way, managers who are certain that they can decide the HR programme of a company wholly in the context of the HR function will not succeed in adding value to the company they work for (Eigenhuis & Dijk 2007).
Top management and human resource manager must have an effective communication channel and must form a natural partnership so that the two can provide balance in providing success to the core functions of the organisation, and in reducing, or eliminating, the less important functions. They should provide new perspectives and innovations and in building new frontiers for the organisation (Bordum 2010).
SOURCE: Briggs & Keogh (1999)
In the context of GCS, this is not being done. GCS’s strategy can be considered entrepreneurship with a one-man policy, that of Chris, who passes this on to his assistant, newly appointed David Bloxham. GCS does not even have an effective HR manager, nor somebody to handle human resource. The employees and staff are focused on getting a deal with clients and candidates.
GCS survived because of Chris’ skill and those of his consultants. Chris has not applied ideal strategic management that should be implemented by an effective HRM, with an HR manager and team. GCS has applied simple strategies which are individualistic in nature. Monetary rewards are motivational factors, but motivational factors are ‘a dime a dozen,’ which means there are many ways to motivate employees other than monetary rewards.
Strategic fit
On strategic fit, the single-contingency approach practice can only be effective in the short term. Chris is the content of having the ‘high-risk high-return’ business model which does not suit to the recruitment industry, considering the many demands from clients and even candidates. This is a complicated business, new to the rest of the world but decades-old for the UK. Miller (1992 as cited in Garlichs, 2011, p. 42) suggests that managers have to choose which fit, external or internal. Both strategy- and structure-fit suffer in GCS contexts. It was partially successful in the one-man policy, but as mentioned, that is only for the time being. It must have effective HR policies with a well-organised HRM. Structure fit is also focused on the vertical management, which is not in accordance with the diagram in figure 1 – the vertical and horizontal teams have to be a part of the structure to provide the fit (Lindow 2013).
GCS’s use of the one-spot business model allows it to have a competitive advantage among its rivals in the highly-fragmented recruitment industry. It is a risky model, but it provides the company high return, and this is what Chris, the CEO, has been aiming for. This risk, which allows GCS not to have exclusive deals on clients, can bring the company into more hazards. A company might change its mind not to hire, which is a waste of time and resources for GCS. It can lead to bankruptcy. GCS’s competitive advantage for having a high-return approach is not sustainable. The model cannot bring the company to greater heights. For the past decades, GCS has created only one double-millionaire in the person of Kevin Brown.
Sustainable competitive advantage
GCS should focus on fulfilling the vision and goals of the company in the long term and not in the short term only. This will motivate the employees for higher positions. Sustainable competitive advantage creates a mindset of working for the organisation and not for the individualist goal of acquiring monetary reward or dinner with Chris in a high-class restaurant.
A framework that could produce a sustainable competitive advantage for a firm was provided by Professors Patrick Wright and Jay Barney in their VRIO concept which stands for ‘value, rareness, imitability and organisation’ (Kandula 2003, p. 13). Sustainable competitive advantage comes from the organisational knowledge of the firm. GCS’s strategy and organisational knowledge stem from how Chris Bartlett started and introduced it, but some of these strategies need to be refined, modified and improved.
Moreover, the sustainable advantage did not originate from general skills of the organisation; it simply came from what is termed as firm-specific. Specific skills, or specialist skills, of recruitment consultants of GCS are very important to attaining the organisational skills.
Sustainable competitive advantage is something attained through teamwork and not from individual members of the team. In this sense, we can examine the nature of Kevin Brown, whom Chris wants to ‘clone’. Brown is indeed an extra-ordinary talent, but he comes from an organisational culture that is used to being individualistic and not team-oriented. If GCS employees were team-oriented, Brown could not be the only double-millionnaire GCS had.
The stars in the industry
So-called stars in the industry are highly-paid because of the kind of job that they work for. HR experts should start studying this class of stars. Groysberg, Nanda, and Nohria (2004) studied the performance of accomplished CEOs, researchers and professionals in organisations specialising in investment banking, management consulting, and other specialised skills. The researchers found that instead of being stars, they were like comets who plunged in their achievements. First, they attained successes but their stars faded when they left one company and transferred to another firm. Groysberg and colleagues (2004, p. 94) defined a star as ‘any analyst who was ranked by Institutional Investor magazine as one of the best in the industry’.
The findings of the study revealed that the star’s achievement goes down because he/she is new to the organisational knowledge of the new firm that hires him/her. Stars do not stay long in one organisation even if they achieve big salaries. Competitive advantage is not attained by hiring stars but organisations should concentrate on growing talent within the organisation.
GCS can do this, grow talents and use its organisational knowledge to grow more Kevin Browns who must be working in teams. GCS must also be aware of this phenomenon and warn its clients, thereby attaining a trust and strong relationship with its clients. GCS must not be surprised why it has produced only one Kevin Brown; it is because Kevin Brown works alone. It is time that GCS change this strategy.
The HR philosophies of firms dictate how they are successful in developing stars. In the study of Groysberg and colleagues (2004), they found that between 1988 and 1996, the company Sanford Bernstein made a ‘star out of one in five analysts; Merrill Lynch’s rate was one in 30’ (p. 100). GCS should grow stars and not look and hire them. GCS can focus on growing stars and make them permanent employees to serve their clients. It should also start forming and working in teams.
GCS will continue motivating the members of the team which must now be composed of the telecanvasser, resourcer, researcher, account manager and recruitment consultant. There can be an endless number of teams, each with the same functions, but which will be under the guidance of the HR manager and the CEO.
The manager can check the performance of the teams through a checklist titled ‘The New Business HR Agenda,’ which was acually used by Unilever in its hundredds of branches worldwide. An HR team would visit any of their global operations and use the checklist as a way of checking the performance of the branches. This is also a tool that provides a holistic picture of the operations, on what were not done and what remain to be done. The different teams checking the branches must compare notes and take into account the similarity of the contents. The contents of this checklist are:
- Does the team have strategic concerns which are obvious, allied, and reliable?
- Is the team properly managed?
- Is the team knowledgeable in HR policies to pursue its tasks in accordance with the firm’s priorities?
- Is the team well motivated and have a good record of providing quality service and strong accomplishments?
The teams (or GCS branches worldwide) can use the checklist for self-assessment. The teams can also use this as a framework and can refine it for a more detailed self-assessment.
Recommendations
Strategic HRM supports an organisation’s quest for sustainable competitive advantage. An organisation should effectively manage its HR in order to achieve competitive advantage in the short term- and long-run. GCS consultants and staff supply the company with their knowledge and skill to attain competitive advantage (Matlay 2005, p. 220).
To maintain this, GCS must be able to evaluate the knowledge base of the consultants and provide a mechanism so that this knowledge will spread throughout the firm. Chris should stop the company practice of dinners to individual consultants who have achieved their quotas; rather, GCS should start rewarding teams who can achieve high-paying marks.
Identifying the company vision and mission will outline GCS’s decision-making. The consultants are focused on individual goals. No wonder, only Brown has attained the double-millionaire status.
GCS’s vision, goals and mission must be articulated to the staff and consultants and the entire organisation as a whole in order to acquire commitment and awareness on the employees. Chris has not done this but has focused on giving monetary incentives. Monetary incentives can be effective temporarily. Employees or recruitment consultants will look for other fulfilling careers and a job that can give them a work-life balance, or a happy life between work and home even without monetary rewards. GCS’s focus and vision should be over and above monetary rewards.
Teamwork and teams are important in an organisation, in particular, GCS whose tasks rely on effective management of teams. Most of the tasks used by GCS consultants can be performed successfully by teams, for example, the head-hunter approach. If this approach is done by a team, GCS could have recruited many of the so-called ‘stars in the industry,’ although GCS should be careful about it. GCS should grow stars in the company, instead of finding them in other companies to provide them the stars they wanted.
If Chris was able to recruit the likes of Kevin Brown who has provided the double million for GCS, he can also find other Kevin Browns, who might be called ‘star’ in the industry. This is however like finding a needle in a haystack. GCS must consider using both methods, i.e. search and selection and the one-spot model. Then, he can look for other consultants to handle the search and selection, but the one-spot model can continue.
References
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Briggs, S & Keogh, W 1999, ‘Integrating human resource strategy and strategic planning to achieve business excellence’, Total Quality Management, vol. 10, nos. 4&5. Web.
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Groysberg, B, Nanda, A, & Nohria, N 2004, ‘The risky business of hiring stars’, Harvard Business Review, vol. 1. Web.
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