125. Human Resources Management: Local to Global HR Department Models

15 important lessons from this lecture:

00:02:01 For small companies, you will likely have a few people who can be defined as “The Human Resources Department,” and they take care of everything “HR-ish.” But for larger companies, this structure is impossible, as there will be HR people spread throughout the organization’s headquarters, regional headquarters and subsidiaries.

When it comes to such an international Human Resources Department, the question becomes who does what. Internally, HR recruitment and internships for the same organization will function completely differently from Hong Kong and Barcelona, and anywhere else in the world.

00:05:12 Every organization has a headquarters based somewhere in the world, and there are historical, logisitical, branding, etc. reasons why companies choose to have their companies headquartered in a specific city.

Adidas  and Puma, founded by Adolph Dassler and Rudolf Dassler respectively, are both headquartered in their little home town of Herzogenaurach, Bavaria because, according to a Tuesday, August 13, 2011 article in Time.com, as the “…result of miscommunication. After an Allied bomb attack (during WWII), Adolf and his wife took cover in a bomb shelter already occupied by Rudolf and his family. ‘The dirty bastards are back again,’ Adolf said, apparently referring to the planes, but Rudolf thought the comment was an attack against his family.”

[EDITOR’S NOTE: In his lecture Human Behavioral Biology: Where Game Theory & Evolution Collide, Robert Sapolsky points out that one of the major factors of Darwinian evolution is kin selection ‘the idea that traits have a higher probability of making it into the next generation when relatives and family members cooperate with each other concerning reproduction.’ The overwhelming success of both Adidas and Puma are perhaps a smack in the face to kin selection.

For information about now NOT to ruin a deep family bond, consider reading the books The Gentle Art of Verbal Self-Defense by Suzette Haden Elgin and Perfect Phrases for Dealing with Difficult People by Susan F. Benjamin.]

00:11:49 Typically, a company starts out as an idea in a garage somewhere… and then grows: locally, regionally, nationally… Once you have one single, tiny customer in another country, at what point do you identify yourself as ‘international?’

You’re an international company as soon as you’ve begun doing business across borders.

[EDITOR’S NOTE: In his talk Integrated Product Design: Building A Generalist/Specialist Business, Dror Benshetrit admits that when he was just starting out with no clients and working alone, he referred to his company as ‘we’ rather than ‘I’ as a branding strategy to give his potential clients the idea that his company was, and would become, an internationally-minded company. Eventually, it did.

As an online business and/or application, your very first customer could make you an ‘international’ business. In my interview with Derek Banas of New Think Tank, Banas points out that at least 60% of his users and website traffic are from outside of the United States.

Lastly, in her talk Growing From Zero To Many Users, Adora Cheung explains that first and foremost you should identify all relevant customer segments and the products they are using and know what they all have in common that you can build your business on, but then also optimize your product for one specific customer segment so you can focus your marketing efforts on making that niche customer segment loyal before expanding.]

00:13:36 As a small but expanding business, even as you begin expanding internationally with subsidiaries, you still tend to be very headquarter-minded. But as your number of employees in your subsidiaries begin growing, you’ll need to begin hiring more Human Resources people to manage those people and daily business operations. Eventually, subsidiaries will grow so large that the headquarter-minded Human Resources department will no longer be the optimal model, as each country has its own culturally-based recruiting, training, and business practices.

Sooner or later, the organization realizes that it’s entirely too complex to keep a headquarterly-minded business model, and so moves through the stages from an International > Multinational > Global > Transnational model…

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…as salary and compensation packages, recruiting and job ads, and even job position responsibilities vary from country to country.

00:17:42 Very quickly, you can tell

whether a company is a national, multi-national or a global organization

simply by:

  • how many languages the company’s website has been translated into
  • how many different website layouts
  • whether or not the ‘career recruitment’ section automatically lists job positions by country, revealing that there is one HR database behind it, revealing that the entire world is seen as one, single market

When company culture no longer distinguishes it’s employees by location, it has evolved into a global company mindset.

Should employer branding be done globally or locally?

[EDITOR’S NOTE: Recall in his lecture How Branding Strategy Affects Recruitment, Mr. Trost explains that when resources are limited, you cannot be the leader in everything: innovation, brand, price, quality, other… and that in the long run, Innovation and then Brand – people know you, like you, and have very clear associations with your name, logo (Specific) – will win out over Price (Generic).]

Should employee selection be done globally or locally?

00:24:11 Candidates for a particular production location would most prudently be selected locally, not at the headquarters, and top executive compensation and salary would most prudently be selected by headquarters; this leads to a transnational approach – finding the right balance between the global and the local markets.

00:27:20 Human Resources responsibilities can generally be divided up into several different tasks:

00:28:44 Traditionally, Human Resources deals mostly with administrative tasks, however in the future, Human Resources will likely take on more of a consulting and supportive role, such as interpersonal communication and managerial skills or managing large employer branding projects and in-company employee programs.

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00:35:01 Known as the 4 Ps of Human Resources, modern and future HR will be tasked with being:

  • Polite: The politest people in the company
  • Police: The protectors of company policies and procedures
  • Partner: Helping the business lines solve their human issues
  • Player: Critical role in helping to develop any business strategy

00:42:13 In the late 90s, David Ulrich wrote the book Human Resource Champions outlining his HR Role model. If you work in HR, this book is a must read.

Ulrich explains that HR must be strong both in administrative procedures first, and secondly strategy: if payroll doesn’t work well and people don’t get the correct salary, you’ll never be in a position to talk about strategy.

00:48:02 In modern business the ‘know all HR Generalist’ is dying and a new role in Human Resources has emerged: The “HR Business Partner.”

00:55:52 Technology such as virtual assistants (such as ‘Ask Anna!,’ Ikea’s virtual assistant which helps you navigate Ikea’s vaste website of products) and employee self-service (ESS) automate the Q&A process as much as possible so less and less human interaction is required for mundane, repetive tasks and questions, freeing your qualified and trained employees to work on more important matters.

00:59:01 Companies used to have an expensive and inefficient decentralized recruiting organization, whereby each location had its own application data base, and each location managed every aspect of its recruiting process. This meant that job applicants were required to apply for job positions at each individual location.

Centralizing these redundant processes – publishing job offers, pre-selection, etc. – is less expensive and creates more synergy among the different locations.

01:14:53 You can’t be an expert in everything and a generalist in everything; you need both to maximize the Human Resources process.

[EDITOR’S NOTE: In his lecture Integrated Product Design: Generalist vs Specialist Mentalities, Dror Benshetrit argues the benefits of a Generalist/Specialist business model.

Inversely, in his talk Winning Without Pitching: 10 proclamations to win new clients, Blair Enns points out the advantages of expertise and specialization.]

01:16:38 Outsourcing is “the contracting out of a business process to another party,” and offshoring is “the relocation of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting.”

Referring back to generalization versus specialization, companies prefer to outsource when a particular responsability isn’t a part of its core competencies, and financially it makes more sense to contract a professional to handle those responsibilities than to invest in the time and money making it a core competency.

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[EDITOR’S NOTE: In his lecture Choosing between B2B & B2C business models, Aaron Levie encourages startups to do things that competitors and incumbents can’t or won’t do because it’s economiically or technally infeasible:

Find out where in an incumbent’s business model and financials that they absolutely cannot afford to compete on price (or time, or quality), and then undercut them, or find unusual or unique ways of monetizing customers, and thus not really practial for anyone else to do.

Secondly, in his earlier lectures How branding strategy affects recruitment and more thoroughly in Attracting & selecting the best candidates, Armin Trost explains that to identify your unique selling proposition as well as your unique employee value proposition and find the one single argument why you are a great employer:

  1. Identify your company’s strengths and what makes you authentic
  2. Identify and understand what is most important to and relevant to your ideal candidate
  3. Identify your competitors unique selling points and how they are pitching their employer branding
  4. Market your employee value proposition with the strengths competitors have not claimed.]

01:28:52 The absence of, or perceived absence of, competition tends to lead to lousy work.

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