Building competitive advantage during bad times | Sunday Observer

Building competitive advantage during bad times

28 November, 2021

Covid-19 and its negative consequences on business have driven the business professionals crazy. The supply chain network has been crippled, some industries have significantly declined, and costs have skyrocketed, freight and transport costs are at its peak. Where are we heading?

What is the solution - Solution lies in people. We need the best people performing at their best to navigate these humongous challenges. Human Resource is asked to do more with less when the operating environment gets tougher.

In today’s increasingly challenging markets the number one challenge for all HR management teams is pushing for performance, managing people related costs, growing capacity and retaining talent by rewarding – ‘grow people to grow business’. No longer can one function of the business operate in isolation; all functions must work cohesively on complex business issues. People drive competitive advantage in good times and bad times. People create change when changes are needed – complementary and radical.

Change requires an organisational culture willing to proactively embrace change quickly enough and adjust. Knowing that organisational success is about ‘performance driven culture’ then it goes without saying that Human Resources is one of the most important functions of any company’s future achievements.

The question is: Do HR professionals understand, embrace and perform proactively this leading role independently and effectively? Do HR professionals take a long-term view and shape the thinking of the functional managers to promote sustainable HR strategy as opposed to playing tactics based on whims and fancies of other managers?

Most HR managers have a tendency to oblige the functional managers and be respected for fast responses to the issues as identified, understood and interpreted by them. This is not strategic HR management. An HR manager’s job is to take a more holistic view on issues and work on a long-term plan to build a high performing team with the right capabilities and competencies, pay them a market competitive compensation package, get the right return out of the employees through continuous development and motivation through a process of; setting the right expectations, performance management and rewards and recognition.

Building a high performing team is also about weeding out the poor performers and unless both ends are managed equally well the poor performers will continue to drag performance of the entire team down.

Motivation is not just about recognising the better performers but also being seen taking action against the poor performers who have consistently failed – this differentiation is something the high performers look for which naturally motivates them to achieve greater heights.

Unbiased recognition vital

Managing people’s mind-set demands a lot of wisdom and skills by HR managers. Some functional managers have no sense of human behaviour due to lack of experience and exposure managing people. Good HR managers are people who have studied modern human behaviors and they should be miniature psychologist and communication experts.

As human behaviour changes with external factors, HR managers should evolve their thinking. Bad economic times bring a high degree of uncertainty to people and to their families and communicating to the staff on how the company is coping with the current circumstances and what management needs from all employees to weather this storm will give comfort to those who are “willing and able”. Employees need to know that their performance is directly related to the company’s results and, in turn, the ongoing viability of their employer.

Accountability philosophy

HR managers together with the functional heads should create a higher level of accountability and make the employees obligated for results as their primary delivery of job expectations.

Delivery of Job expectation is non-negotiable - that’s the employees accountability for having the job. HR managers and functional managers sometimes make the mistake of creating a psyche that for delivery of minimum job expectations is excellence and should be recognised and rewarded.

Yes, I agree that anyone delivering minimum expectations is good but the concept of recognition and reward programs is to motivate people to go beyond their basic expectations.

The moment you recognise average performance you naturally set a bad precedence and allow mediocracy to set in and there are dangers attached.

There is a price paid for regular job performance. If the concept of recognition is to really work on a sustainable basis, then it should be over and above that ‘basic transaction’. Recognising people for basic delivery with incentive programs is suicidal and has major long term negative consequences.

Realise how important HR management is in these difficult times – think, think and think and do it right.