A useful way of thinking about a business’s organisational structure is to think of the business in terms of its vision, its strategy, and its tactics. Both strategy and tactics depend on the overall vision of the business: in short, what is the main selling point of your business; what does it offer that distinguishes it from your competitors?
For most owners of businesses, this will be easy to answer. Where owners and managers get confused is at the level of differentiating between business strategy and business tactics. The purpose of this blog is to clear up some of this confusion, and to suggest some of the ways in which your business’s HR activities can impact top-level, strategic business thinking.
Learn more: How to create a business-driven HR strategy
What is business strategy?
The word ‘strategy’ is derived from an Ancient Greek word meaning ‘office of general,’ and ‘command.’ The military root of the word gives a clue to what strategy might mean in a business context: just as an office of general commands an army, a business leader is responsible for commanding the overall operations of the business.
Both army generals and business leaders have goals that they make their target. In order to achieve their goal, an army general might, for instance, command their army to take one route over another because winter conditions make this route more hospitable (and therefore the army is less likely to suffer losses on the way!) than the alternative route.
In the same way, a business leader might decide to lead with a product or service that offers the same value as competitors but for less cost, making their business less likely to fail because of harsh competition. Alternatively, the business leader might decide to offer more value than their competitors, just like the army general might decide to arm their troops with more resources to successfully get through the less hospitable - but quicker - route to their target. Both of these are valid strategies for achieving the target goal.
What are business tactics?
Where business owners and managers often go wrong is in confusing strategy with tactics. Business tactics are the things done in order to achieve the strategic goal. If a business decides to pursue the strategy of offering more value than their competitors, they might do this by, say, adding a new feature to their product every time an opportunity is presented to do this (this is like the army general arranging for supplies to be delivered to their troops en route to their target).
If, on the other hand, a company owner or manager decided to pursue the business strategy of offering the same value as competitors but for less cost, a tactic might be outsourcing certain tasks to reduce costs on overhead.
How HR activities support the organisational strategy
How does HR activity fit into all this? HR intervention can help business owners and managers to achieve their strategic goals in several ways.
The strategic goal: Offer the same value as competitors but for less cost
How HR activities impact the goal:
If your business’s strategic goal is to keep costs to a minimum, HR - when done effectively - can help to save costs in areas that might otherwise be spent on time-consuming administrative tasks. Myhrtoolkit’s holiday management system, for instance, allows managers to process holiday requests in just a couple of clicks, saving costs in areas where previously this task might have been allocated to a staff member whose skills are more profitably focused elsewhere.
The strategic goal: Offer more value than competitors
How HR activities impact the goal:
If HR activities are performed effectively, more time is freed up to work on other projects such as developing new features. Effective HR can also assist in the development of new product or service features: myhrtoolkit’s document management library, for example, stores relevant documents in one place, and managers can see which members of the team have or haven’t read each document. This is especially time-saving when hiring somebody new or temporary to assist in the development of a new feature. HR tasks can then be mobilised in a way that contributes to efficiently developing new features.
By intervening at the level of business tactics, HR activities can be used by owners and managers of businesses in a way that supports their strategic, top-level business goals. In this way HR activities can be used in a way that supports the overall vision of your business.
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Written by Kate Taylor
Kate is a Content Marketing Executive for myhrtoolkit. She is interested in SaaS platforms, automation tools for making HR easier, and strategies for keeping employees engaged.