Chapter 2: Aligning Training with Strategy

Goal: To better understand how to align training with strategy

1: Understand the strategic planning process

 Strategic planning- process used to determine how to best purse the organization’s
mission while meeting the demands of the environment in the near (1-2 yrs) and long
term (5-10 yrs)
o Proactive strategy- focuses on longer term and is more formalized, typically
involving sophisticated analytical and decision-making tools
 Uses best guess about future
o Reactive strategy- (typically used to respond to short-term business conditions)
less formal analysis and planning; attention focused on immediate future
 Addresses how operations confront what exists now and in next year or
two
o *both necessary for an organization to be effective
-Strategic planning should occur throughout org. (higher level provide direction to
lower level)
-Once developed, broken down into objectives given to each organization unit (then
units develop own strategies to achieve own objectives)
 organizational strategy- provides the direction for HR’s strategic objectives (HR unit’s
perspective)
o *plans to implement organization strategy are developed and coordinated
throughout organization

-sometimes will leave responsibility of what employees learn to employees themselves (decide
what training they want)

HRD should be involved in strategic planning at the following levels: organizational strategy, HR
strategy (tactics), HRD strategy (more tactics)

Organizational Mission
 Strategies created to achieve organizational mission
  Good mission statement= good explanation of what company seeks to accomplish (goal)

Strategic Choices
 Strategies reflect choice organization makes to pursue mission
 Implications for how/where HRD focus its resources
 Competitive strategy- refers to the positioning of the company’s products and services
in the marketplace; involves internal and external choices to improve or retain
competitive position
o 2 types
 market leader- prospectors, innovators; find and exploit new
product/market opportunities; success= capacity to survey a wide range
of environmental conditions, trends, events and move quickly into
window of opportunity
 cost leader- “defender strategy” be low cost provider in industry;
success= pricing competitiveness and having a product acceptable (*not
necessarily best) in market and producing a standardized product/service
efficiently using economics of scale, low cost labor, and introducing
innovative production methods
 some organization with different products may have different strategies
for each
 *many ways to pursue single strategy
 ex. for HRD looking for outside training, can choose between
group of contractors or single contractor who guarantees low
price
External Environment
 elements outside organization that influence organization’s ability to achieve its mission
 Ex. competitors, laws and regulations, suppliers, technological innovation
 Determine threats/opportunities in external environment and incorporate into strategy
 Environmental uncertainty- determined by 2 factors: complexity and stability
o Environmental complexity- number of factors in environment and degree to
which they are interrelated
o Environmental stability- rate at which key factors in environment change
  Certain environments= getting it right and sticking to it; centralized decision making
(cost leader strategy) *environment may be more hostile but slow rate of change
 Uncertain environments- strategies using more decentralized decision making; must be
flexible and adaptable (market leader strategy)

Internal Alignment with Strategy

Internal strategy- provides direction for internal systems (as opposed to competitive strategy=
external)
 2 factors: organization’s core technology (how principal products/services are created)
and its structure (policies, procedures, etc.)

Technology- how the work is done in an organization (each unit in org. uses technology to
accomplish tasks)
 Routine technology- applied to tasks with outcomes that are highly predictable,
demonstrate few problems, and use well-structured and well-defined solutions when
problems do occur (ex. high volume assembly lines)
o Highly specialized tasks, well-defined rules; decision top-down and highly
formalized
o Usually in cost leader strategy
o Expensive infrastructure but low production cost per unit
 Non-routine technology- results that are difficult to predict, problems occur
unexpectedly, and solutions are not readily available and need to be developed on a
case-by-case basis
o Management needs to provide lower levels with more decision-making authority
to meet encountered challenges; task-interdependence
o Usually in market leader strategy
o Initial high cost but new product command high prices
Core technology- main activities associated with producing the organization’s principal
products and services

Organizational structure- how a firm is organized in addition to the rules, policies, and
procedures used for making decisions and coordinating it various activities; defines how
internal operations interact with external environment
 Organizational design- number and formality of rules, policies, and procedures created
to direct employee behavior
o Ranges from mechanistic to organic
 Mechanistic design- organization with highly defined tasks, rigid and
detailed procedures, high reliance on authority, vertical communication
channels
 Focus on technical and financial systems and resources
 Interpersonal skills and behaviors are prescribed
 For routine technologies
  Organic design- flexibility in rules and procedure, loosely defined tasks,
high reliance on expertise, horizontal communication channels
 focus on KSAs
 skills and behaviors evolve to supplement/complement
technology
 for non-routine technologies
 *few operate on extremes; most orgs lean towards one
 Decision autonomy- amount of authority given to employee in deciding how to
complete a task and degree to which they are able to influence goals and strategies for
their work unit
o Function of whether decisions are centralized (cost efficiencies; cost leader
strategy) or decentralized (flexibility/adaptability; market leader strategy)
 Division of labor- the way in which work of an organization is divided among the units
o line (working w/ core technology) and staff (everyone else)
o divide by products, customers, geography, functional areas, processes in core
technology, etc.
o focus on degree to which duties are specialized-> more specialized= more
centralized decision making and more mechanistic
 why? Need to closely oversee and coordinate activities of employees

-cost leader= more beneficial to strategically plan, but strategic planning important for all orgs.

Aligning HR with Strategy

 Must invest in developing strategic HR management capability
o Companies that do so perform at a higher level
o Firms that do so will significantly increase market values
 *Must align HR w/ firm’s strategic goals and invest in HR achieving operational
excellence
 *HRD- successful implementation of central employee competencies

Aligning HRD with Strategy

 HRD is part of HR unit; provides assessment of employee strengths and weaknesses
relating to competitive strategy
  Competencies are imported through recruitment and hiring
 HRD develops training to focus on critical competencies needed for strategic
performance objectives and delivers training

Stages HRD goes through to align training with strategic plan:

1. Determine the strategic plan then determine which jobs would be most affected and
identify KSAs and competencies required to achieve strategic plan
2. Align training and development resources to strategic plan; determine competencies
and KSAs of employees in targeted jobs (this helps determine what learning is needed)
3. Get buy-in for the training; make sure everyone is clear about how training supports
strategic plan and know how changes will affect them (MUST make sure CEO/high ups
are supporting training)
4. Actual training takes place; critical to have top management involved

2. Understand factors of concern to organizations

-Rate of environmental change has been steadily increasing; organization must constantly
change to survive

Globalization
 Organizations operate in global economy and must compete globally (even if only sells
to local market)
 Must be aware of environment and current trends

Technology
 Must be aware of new technologies and make decisions on whether to adopt or not
 Employees must have aptitude to receive required training to utilize technology
effectively

Internet
 Innovate and adapt to meet and conduct transactions with customers through web and
apps
 Hire engineers, developers, designers, etc.
 Customers can post opinions- companies must put customer first and delivery high-
quality items/experiences

Labor Market
 Lack of talent- talent shortages in skilled labor, and overall
 Organizations can create their own talent- requires employees to have aptitude for
learning the change

Increase in Diversity
 Blessing or curse; more likely to find talent but friction between diverse groups
Race and Ethnicity
 By mid-century, whites expected to no longer make up the majority
 Increasing number of majorities in workplace (may be because of equal employment
law?); makes sense for social responsibility and need for talent
 Turmoil- some employees slow in accepting other cultures

Gender
 Women moving into senior positions, but still only old a small share of leadership roles-
might be hidden talent
 Need to be aware of discrimination and sexual harassment- lawsuits and damage to
reputation

Implications:
-leaders need to constantly scan environment and prepare for changes with strategic planning
-must align training with strategy

3. Understand Change Management

 Often called “organizational development”
o Management of performance
 CM and strategic plan go hand in hand
o Planning and implantation of strategy involves change (way organization
interacts with external environment and manages internal operations)

CM and Strategy
 Must resolve 3 core issues in developing and implementing strategy:
1. Technical design issues- arise in relation to how product/service will be determined,
created, or delivered
2. Cultural/ideological issues- shared beliefs and values that employees need to hold for
the strategy to be implemented effectively
3. Political issues- result of shifting power and resources within organization as strategy is
pursued

CM- provide techniques for change to occur in objective, goal-oriented manner; uses open-
system, planning changed process

Approach:
1. Establish need for change; occurs in in strategic planning during environmental
scanning phase; identify threats/opportunities and when gap exists between what
organization and what the external environment requires, need to change
2. Business objective are set
3. Current strengths and weaknesses are analyzed to determine what internal changes
are needed
4-9. Development of tactical activities to achieve strategic objectives
Levels of Change and Resistance
1. The organization itself- how labor is divided and what rules/procedures govern; ensure
work is allocated appropriately
2. Group and their interrelationships- the way work is performance and how outputs are
related; design of jobs within units and how they connect
3. Individuals within groups- employee changes in performance and mechanisms (facilities,
machines, equipment, KSAs) put in place to get desired performance

*resistance to change= common

 Must have sufficient motivation to change
 Those with status quo can create resistance to derail change effort
 Change process MUST address all three levels of change

Training and CM
CM= strategic; executives usually clients
 Challenge assumption underlying org. practices
 “analysis paralysis”
Trainers= tactical; clients are lower
 Take org. practices as givens and try to make people more effective within practices
 “doers”
*collaboration (conflict) between CM and Trainers has not improved over the years; would
benefit working closely with each other because one’s weakness is the other’s strength

Why Trainers Need CM Competencies

 CM- places emphasis on participative approaches to problem-solving-> training is better
when trainees are active (less likely to resist)
o Opens communication, higher levels of motivation during program, ties line
managers directly to program (make sure transfer training to job)

Force-field analysis- a CM technique; any situation can be explained by sets of

counterbalancing forces that hold it in place
 Identify all forces that affect a situation, determine if each factor is exerting force
toward (drivers) or against (restrainers) change
 If have more restraining forces, this would create a resistance to change
 To change, must have larger forces for change than restraining forces

Why CM Professionals Need Training Competencies

 Organizational change based on strategic initiatives does not have a great success rate
 CM intervention- groups of employees in structured activities (planning, problem-
solving, intergroup conflict)
o Employees need to:
 Have common KSA base in these areas
 Understand group dynamics and be skilled working in groups
  Understand and be skilled at using a common problem-solving method
-If CM not skilled in designing/implementing training programs, collaborate with trainers;
helpful when involves internal training resources and CM consultant familiar with good training
practices from outside org.

Key times for training:

1. When CM process is started, training is needed to provide education about changes
process and provide necessary KSAs
2. After process has been in place for a while, while retaining or upgrading of KSAs is
require to sustain process
3. As new employees enter org., they need understanding of process and KSAs
-not many orgs. Conduct follow-up training or modify training, most stop at initial training

4. Putting it all together

HRDs Relationship with Other HR Functions

 Intractably tied to other HR functions
 Ex. the Health and Safety unit require HRD to supply necessary training for assuring a safe
work environment
 Lots of training for first-line supervisors to assure positive labor relations

Developing an HRD Strategy

 Organizational and HR Strategy
o Market leader org.- HRD must adopt a strategy that builds on already high level of
competency brought into the org.
o Cost leader org.- training focused on management due to high structure imposed
on job tasks at lower level
 Integrating HRD and CM Activities
o Reason for division between HRD and CM (despite being intimately connected)-
companies usually organized around diff function areas and CRM and HRD
departments are often separated
 Solution? House together (structural change to align organization’s
internal structure with strategic direction)
 Some Strategic Training Alternatives
o Internal Provider Strategy- usually for big companies in stable environment,
training needs don’t change often; HRD function determine types of training
needs, development of programs, and evaluation of programs
 Most appropriate for cost leader companies (stable)
 Typically for larger companies (resource requirements)
o Outsourcing Strategy- HRD role is to select/manage training suppliers
 Full commitment= outside vendors control training process from needs to
evaluation
  Appropriate for larger org. whose training needs vary dramatically over
short periods of time
 Good for small businesses->no training function
 Flexible
 Decentralized HRD structure- involved in budgeting process, monitoring
processes
 Diff operating units (ex. divisions) can select their own vendors (in
centralized, HRD would pick and manage vendor for each location)
 Must screen and evaluate potential vendors
 Cost and will they meet employees’ needs?
 Reduces costs (don’t have to spend on HRD salaries, benefits)
 No layoffs/relocations; once contract is over, it’s done
 Train-the-trainer approach- train manager(s) to workshop and then spread
training at best convenience/ can modify program prior
o Mixed Strategy
 Ex. conduct ongoing training internally and use external vendors for new
training
 Environmental change-> new training
 Outside training may be less directly relevant and might need more
resources
 If want to make training ongoing, need agreement between
internal and external
o Other approach: develop all new training internally then
contract out ongoing training
 Reduce staff balance with increased development costs
 Appropriate for companies with extremely diverse training needs
from one sector to another
-HR should work with outside vendors- better/expected outcomes

5. Focus on small businesses

 NEED strategic planning to succeed, even if small business
o Will be more competitive and be able to reach to change better
 *not many engage in strategic planning- not enough time, unfamiliarity,
lack of skills, lack of trust
 Encourage planning: educate about advantages, use less formal process
(formalized produces no better results), need to establish relationships in
“good times”
 Implementing plan is easier in small businesses