Summary
The current models of organizational management such as strategic planning, the balanced scorecard, knowledge management, talent management, quality management, skills management and intellectual capital present a common denominator: they all seek alignment between human resources and organizational management, each managing their own approaches, objectives and strategies.
This common denominator is reflecting that the need to achieve this alignment has become a key factor that the organization seeks to achieve success both in its internal management and in its external negotiations.
Abstract
The standing models of organizational management like the strategic planning, the balance scorecard, the knowledge management, talent management, quality managment, competencies management, intellectual capital present a comun denominator: all of them try to find alignment between human resources and organizational management, each of them with its own focussing, objectives and strategies.
This comun denominator is reflecting that the need to reach this alignment has been converted in a critical factor that the organization search to become success in its internal management as well as in its external negotiations.
What can we understand by strategic alignment?
They are the organizational management actions that allow us to direct human resources as a unified set of strategic objectives that the organization wants to achieve. In a single word, they are intended to have unidirectionality towards the strategic objective.
According to Colmenarejo, A (2003) in the interview with Expomanagement 2003, a management appointment held in Madrid:
- The essence of the strategy is that all employees work in the same direction. To be effective, you must communicate. It used to be kept secret, but this is wrong.
Any professional in the company must understand the basic strategy. Communicating it is a critical role for the CEO. The best CEOs are teachers.
They teach strategy, talk about what the company stands for, and help employees, suppliers, and others relate their actions to it.
This unidirectionality that both companies and consultancies want to manage and achieve is based on various assumptions of benefit.
The most important of all and from which the others practically come off is that people are the only ones capable of generating value for the organization.
Human resources as a generator of value is a concept that has prevailed in practically the entire management process since Michael Porter formulated his concepts of strategy and value generation in the early 1980s.
According to the consultant Javier Uriz, (2003) «with the available technologies, the value contribution of each person can be measured.
For this, criteria must be established, but at the moment there are no clear indicators because top management does not know what are the differentiating elements of value creation. ”
This means then that we are at the point that organizations already consider that the alignment of human resources to the strategy is essential for the generation of value, but the contribution of value they generate cannot yet be specifically measured.
It is still not possible to calculate what the organization achieves in financial quantification or simply measurement figures when the human resource provides knowledge, a job well done, valuable information, a decision well made or a problem solved.
Worse still many times there is no idea how or through which actions value can be generated and how much value is being generated with them.
Although these aspects are not yet completely resolved, we can say that we are on the right track, because we have already managed to discover that the organization's strategy is only fulfilled if all human resources know and understand it and that this process of aligning ourselves together in the direction of the strategy is key to organizational success.
As a consequence, the issue of commitment to strategic values has also become important, which is nothing other than understanding, valuing and putting into practice the best practices through which the organization achieves its strategic objective.
This new management approach with strategic alignment practically covers all aspects of the business, which means that human resources as a whole are the fundamental actors that create and implement the planning of business objectives and work processes, leading them to obtain favorable results for all: shareholders, clients, collaborators, market, etc.
Thus, the current management models that we have named bring us closer and closer to relating human resources to business strategy more successfully through plans, processes and results consciously carried out so that they also address the generation of financial and non-financial value to the organization.
How can strategic alignment be made through management models?
In order to understand the management of the subject and its importance, it is necessary to first specify what each model proposes to allow us to carry out alignment, sustainability and competitiveness in organizational management.
The following table will facilitate this analysis:
| Model | Management objective | Focus | Input | Benefits |
| 1.Strategic planning | Plan organizational actions in alignment with your vision and mission | Plan | Organizational planning | Have a planning that allows achieving strategic objectives |
| 2. Dashboard | Carry out a balanced strategic management | Plan, Process, Result | Effective managerial leadership | Improve financial results based on balanced management |
| 3.Knowledge Management | Optimize resources and add innovation to processes and results | Plan, Process, Result | Knowledge spiral generation | Converting knowledge into value |
| 4. Talent Management | Leading the market | Plan, Process, result | Attracting and retaining the best talent | Generate creativity and innovation |
| 5. Competency management | Lead the organization to success | Plan, Process, Result | Achieve greater organizational competitiveness | Guide to organizational success |
| 6. Quality Management: Malcolm Baldridge Award | Competing in global markets | Process | Carry out management processes based on standards of excellence | Achieve global competitiveness |
| 7. Intellectual Capital Management | Accounting for and capitalizing on the prospects for human capital, customers, etc. | Outcome | Expand the asset base with intangibles | Increase the financial value of the organization |
Own elaboration (2002)
How does each model develop strategic alignment?
Strategic planning
Smith Cavalie (2000) of the Center for Social Economic and Technological Research CYNSEYT belonging to the Honrad Adenauer Foundation tells us that strategic planning is a set of formal activities aimed at producing a strategic formulation…
When a strategic planning system is established, there is an incremental demand for information that must be supplied by the various operational areas of the organization… in fact, one of the tasks is to establish specific goals for each unit of the organization, which if met management knows that the company is moving in the desired direction…
As a consequence, the establishment of a formal strategic planning system lowers strategic concern at all levels of the organization.
Therefore, everyone is involved in the general strategy since they have been part of its formulation and will be part of its implementation, which will lead the company to fulfill the objectives set for a given period. In turn, these stated objectives are strategic insofar as they will produce a sustainable competitive advantage for the organization.
Control panel
Kaplan (1997) the creator of the dashboard tells us how to achieve strategic alignment: from top to bottom:
- The development of the scorecard must begin with the executive team.
The construction and commitment of the executive team are an essential part to obtain benefits from the scorecard.
But they are only the first step. To get the most benefit, the executive team must share its vision and strategy with the entire organization and with key external agents.
By communicating the strategy and linking it to personal goals, the scorecard creates an understanding and shared commitment among all participants in the organization.
- When everyone understands the long-term goals of the business unit, as well as the strategy to achieve these goals, all the efforts and initiatives of the organization can be aligned with the necessary transformation processes. Individuals can see how their particular actions contribute to achieving the goals of the business unit.
The alignment of an organization with a shared vision and a common direction is a complex process and three different mechanisms must be used: communication and training programs, goal setting programs and linking of the incentive system.
Knowledge Management
The Nonaka-Takeuchi Model (1999) is currently the most complete to carry out knowledge management.
They propose - a new style of administration, which they call center-up-down administration, that is more suitable for creating organizational knowledge than traditional models.
In the new model, middle-level executives play the central role in managing the knowledge creation process, taking the initiative to engage executives who are “up” on the organizational scale, as well as top-tier employees. line found "down" in the organization.
Although they recognize that with new organizational designs, middle-level executives are the ones that are most diluted or disappear as a proper level in the organization, the knowledge approach is not based on formulating its proposal, either in the position in the organizational structure or in the status as rather in the role they play.
They say that: -the conceptual framework developed by mid-level executives is considerably different from that developed by senior managers, who provide the direction in which the company should go.
In the bottom-up-center model, managers generate a vision or a dream, while mid-level managers develop more concrete concepts that front-line employees can understand and apply.
Mid-level managers try to resolve the contradiction between what senior managers want to create and what exists in the real world.
In other words, the role of senior managers is to create a great theory, while mid-level managers look for a mid-range theory that interprets it and that they can empirically test inside the company with frontline employees. -.
For them, therefore, achieving alignment will consist of the three groups reconciling their positions, but since this process can be complicated, they have designed a knowledge management model that allows strategies to be proposed and worked together, disseminated throughout the organization and achieve it becomes both personal and organizational knowledge.
Talent management
Talent Management according to the Consultancy Hay Group, Spain (2001) -is a strategic management approach whose objective is to obtain maximum value creation for the shareholder, the client, the professional and society.
Talent management is carried out according to the consultant, capturing, developing and retaining individual talent and organizational talent.
This talent is the one that is aligned putting itself at the service of the strategy, the clients, the market and the environment.
It is carried out through a set of actions aimed at having at all times the level of capabilities, commitments and action in obtaining the necessary results to be competitive in the current and future environment.
The recruitment or retention of talent will depend on the strategy of each company and can be measured through unwanted turnover and the contribution of value by professionals.
In addition to the company providing a clear strategy so that individual talent can bring value to it, it is necessary that the company also provide a series of facilitators that allow this talent to be recognized, commit and effectively address the strategy.
These facilitators will also allow individual talent to become organizational talent. If this does not happen, talent loses motivation and commitment and goes to another company where it can be deployed.
Among these facilitators for the attraction and retention of talent are: The organization's climate, organizational leadership, culture, management systems, relationship systems and remuneration.
Competency management
Mark Scott (1999) in his revisited core competencies work tells us that - the companies that will thrive in the next decade will be those that focus their resources most decisively on activities that drive value creation.
To make this happen in practice, everyone in the company must clearly understand how they contribute to creating shareholder value. The coordination of all the functions of the company and the recognition of its fundamental competences will allow offering sustainable benefits for the shareholder even in the most competitive sectors.-
In his book, the process of creating value in the company, he offers a useful tool to ensure that managers at each and every level fully understand how the organization creates value and how they can influence that process. Scott also emphasizes the need for managers to have a good understanding of the company's core capabilities and competencies before deciding whether or not the markets in which they compete are attractive.
According to Pablo Cardona and Mª Nuria Chinchilla (1999) -management skills are an essential tool to ensure the competitiveness of companies in the new global economy.
Each company must define the competencies it deems necessary to develop its distinctive competence and fulfill its mission. Once the competencies have been defined, the company must design a system for evaluating them that allows detecting the shortcomings and development needs of its managers.
The competency development process is made up of external and internal elements, which dynamically interact and require an appropriate context. Companies that have learned to evaluate and develop the skills of their managers will be better able to face the continuous challenges that the environment presents.
They classify managerial competencies into three groups: strategic competencies that refer to the ability of a manager to relate to the external environment of the company.
These include business insight, problem solving, resource management, customer focus, effective network relationships, and negotiation.
Intra-strategic competences are related to managing the internal environment of the organization and among them are communication, organization, empathy, delegation, coaching and teamwork.
Finally, personal efficacy competences that refer to the habits of a person with his environment, among which are proactivity, self-government, personal management and personal development.
As Mitrani (1992) points out, the fact that an organization has developed and differentiating competencies in its personnel constitutes the only guarantee that the company achieves organizational competitiveness.
Quality management. Version of the Malcolm Baldridge Excellence Award
This model of excellence intends that the organization's processes are oriented towards the organizational strategic objective.
The organizational result depends on the alignment of your processes. In summary, an organization has excellent management if:
- It manages all its processes: leadership, clients, people, planning, etc. in an efficient and effective way. These processes must be aligned with the organizational objectives. It is capable of generating results comprehensively (financial, customers, people, shareholders, etc., based on the application of efficient methods to manage the organization's processes.
Management excellence models seek to assess the quality of an organization's processes and the results achieved with those processes. The model uses seven criteria to assess excellence in management. These criteria must be accompanied by data and facts. If there are no quantitative and qualitative data, the evaluation in the criterion would be zero.
These criteria are: Leadership, Strategic Planning, Customer and Market Orientation, Information and Analysis, Personnel Orientation, process and results management. To qualify for the award, companies must submit to a criteria evaluation table whose maximum score is 1000.
In the personnel orientation criterion, the award examines the way the organization manages:
- The development and utilization of the potential of the staff The work environment The support to the worker The excellence in the performance The participation.
It even assigns people a central role in generating results in the organization, mentioning that it is the people in each of the processes in which they carry out their activities that generate these results.
Intellectual Capital Management
Skandia is the pioneer company in the world in managing intellectual capital.
Skandia had been studying intellectual capital for almost four years, under the leadership of Leif Edvinsson.
At the base of Skandia's model (1994) was according to Edvinsson the idea that the true value of a company's performance lies in its ability to create sustainable value by pursuing a business vision and its resulting strategy.
Based on this strategy, certain success factors can be determined that must be maximized. These factors in turn can be grouped into four different focus areas:
- FinancialClientsProcessRenovation and development the same as in a fifth area that is common to all the others. Human.
Finally, within each of these five areas, many key indicators can be identified to measure performance.
Edvinsson (1997) assures that we are already in the second era of intellectual capital, that of application and capitalization.
Application, because for the rest of this decade, and thereafter, hundreds of thousands of companies around the world, large and small, will adopt this new way of measuring, visualizing, and presenting the true value of their businesses.
They will do so because intellectual capital accounting is the only one that recognizes what counts in the modern economy of corporations that are fast-moving and knowledge-intensive.
- Strong and long-lasting business relationships within networked societies Durable customer loyalty The role of key employees, whose knowledge and competence lies the future of the company The commitment of the company and its employees to learn and renew themselves over time.And more than all the character and values of a company, a crucial tool for investors and executives when studying mergers, acquisitions, alliances, staffing and partnerships. The Skandia Navigator, and the book value scheme of the components of capital Intellectual underpinning is the first systematic effort to discover these factors and set the key indicators for establishing your metric system. Others will follow, says Leif Edvinsson.
Bibliography
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