The essence of a business strategy is value creation for all stakeholders. The main focus is on delivering superior value to customers and building superior relationships with suppliers and distributors. Yet there is a disturbing disconnect in organizational management. While on one hand, research and experience increasingly point to a direct relationship between organizational effectiveness and people management skills, on the other hand, trends in management practices are not in tune with the research evidence. We propose to look into various dimensions of linking business strategy to people.
Businesses across the globe are operating in an increasingly pressurized environment today. We are living in a knowledge-based economy that is characterized by speed, innovation, short cycle times, and sharper and continuous learning curves that highlight the importance of intangible assets such as brand value innovation and particularly, human capital. The last century witnessed industrial economies where competitiveness was based on the optimization of tangible assets.
The key challenge in the knowledge-based economy is to create business strategies that are capable of ensuring long-term value. "People are our number one asset" might sound clichéd, but they truly are the lifeblood of business organizations. The one consistent underlying principle behind the success of many of today's organizations is the competence and commitment of the workforce. Ultimately, people make or break businesses.
In the fiercely competitive business scenario, firms find it tough to maintain the competitive edge. It is impossible to earn exceptional economic returns by doing what every one else does. Put differently, one cannot be "normal" and expect "abnormal" returns and long-term sustainable value creation. A number of studies provide evidence that the "conventional wisdom" of business is simply wrong. Such conventional wisdom tells us that a dominant market share is the key to success; the road to riches is paved with technological edge; and the product or service that precludes ready imitation will enjoy market monopoly. |
