Sunday, 10 June 2012

BCG - HR Matrix

BCG – HR Matrix

“He is very faithful to his boss” commented a colleague…  Now that’s called corridor gossiping. I said “ Is he a dog ?” because whenever one says faithful only one word comes to my mind i.e. “dog” and I personally believe that one should be faithful to the organisation not to the boss and trust me both are not same..I mean being faithful to the boss and being faithful to the organisation are 2 different perspective…… oops !! I think I am digressing from the topic.

I am sure we all have seen the below matrix called “ BCG matrix”. Boston Consulting Group analysis, portfolio diagram is a chart that had been created by Bruce Henderson for the Boston Consulting Group in 1968 to help corporations with analyzing their business units or product lines. This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis. Well Well Well !! what’s new in this ?? we all have studied and sometimes used as well in professional life but what we have not yet done is drawing the below matrix with respect to employees !!

Sudarshan Banerjee ex COO Hutchison Essar says “Most CEOs busy meeting shareholder expectations, tend to neglect People Excellence and end up creating a "we they" organization instead of working towards a " we " type, in today's knowledge economy, people are the biggest assets.”

Many world leaders agree that people are the biggest assets. So what we do in terms of asset management of our respective organizations ?. I am sure most of the people in HR would answer “ we compensate people well, Some will say we train them and let them choose their bosses ( LOL !!)

Have we ever tried mapping the people on above matrix……There will be few employees who contribute to higher growth of the company and contribute the most in the overall profit of the organization and they can be termed as “stars” of the company.  How do these people become “stars” ?

How do people lend competitive advantage ? There are several ways. First , people offer skills capabilities, systems, practices, speed, language, bonding and behaviors, which help execute firms strategy. There also will be “Cash Cows” in the organization, whose compensation would be highest in the organization and contribute highest in company’s profit. In my view stars are any day more effective than cash cows. Dogs are the ones who are being paid highest but contribution is nil. They are also called “bosses puppies”.  “Question Marks” are the ones whose compensations are low anf they contribute lowest to company’s profit. They can also be termed as “ Laggards”

Once we have defined or mapped each employee on the above matrix, it will become easy for us to move and train people to move from one quadrant to another. Dogs to be moved to cash cows and then to stars…..

Appraisal is the medium through which one can measure employees and fit them in the above matrix and then start working along with employees to move them from one quadrant to another. Objective of HR personnel to be able to make employees reach to the highest quadrant “ Star”.

How we can shift employees from one quadrant to another….Lets take example of one organization. Google promotes innovation in an unique way. It makes its work force adhere to 70/20/10 rule. An employee in Google is expected to spend 70 percent his or her time on own job, 20 percent on “continuous innovation” and 10 percent on “discontinuous innovation” in any area he or she deems productive.

HR function seeks to convert an adverse situation into an opportunity. HR often gets trapped in a policy role, mediating employee grievances, monitoring compliance with employment laws and enforcing code of conduct. What is more, the function often has seen its mission as one of helping workers overcome deficiencies and obstacles that hinder their performances. Without ignoring these tasks the new HR concentrates on the positive. How can firm enhance its revenue by doing more for its employees? Instead of trying to fix chronic employee weakness, how can firm tailor a role that matches and capitalizes on strengths? For instance after performance review rather than dwell on a talented marketing executives lack of knowledge in finance, a firm can seek to leverage executives creative talents   in broader marketing role – one that helps company expand in key overseas market.

The organisation designs do not remain static over a period of time. Environmental changes compel organisations redesign their structures. Along with changes in designs, organizations adopt uncertainty avoidance mechanisms, differentiation mechanisms and integrating mechanisms to cope with the compensation of environmental changes. These changes in the organisation designs need to be reinforced by innovative HRM strategies.

Finally HR executive role is not limited to distributing salary slips or structuring salary, its more than that and hence we can say that HR executive is becoming an effective change agent. Change management is very critical for any organisation and differentiates between the winning and losing organisation. While winning organisation adopts and prepare themselves to adapt and assimilate the change, losing organisations are overtaken by events, ruminate over the events and are left behind.     

Its entirely on the organisation and the important stakeholders of the organisation to make their babies ( employees) winning or losing one. Its time to smell the coffee and react to the situation rather than waiting for “boiling frog” syndrome.  It is important to remember that linking strategy and HRM effectively requires more than selection from series of practice choices. The challenge is to develop a configuration of HR practice choices that help implement the organisations strategy and enhance its competitiveness. A well designed strategy can fail if sufficient attention is not paid to the HR dimension. Hence we can conclude that in today’s environment HRM is strategically managed unit rather than supporting unit.

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  1. "Finally HR executive role is not limited to distributing salary slips or structuring salary, its more than that and hence we can say that HR executive is becoming an effective change agent."

    I could not agree more. HR moving beyond compliance activities to looking at a whole picture of a healthy organization would be revolutionary.

  2. Completely agree. Function of human resource department is not only to recruit best of brain but also to engage develop resources for filling the position of leadership. All this can only be achieved by having HR strategy as part of core strategy of organization.