During times of economic downturn, businesses tend to respond to short-term crises with counterproductive defensive tactics. Such knee jerk reactions ultimately hurt the only sustainable competitive advantage we have i.e. our employees.

Regardless of whether Companies are experiencing an economic slowdown or an economic upswing, the bottom line is that people power is the certain route towards gaining a competitive advantage.

In this context investment in talent development is one of the most effective ways for businesses to maintain their top talent’s loyalty and ability to continue delivering high-performance. HR leaders thus need to be proficient at developing talent and creating the congenial work environment to build a high-performing workforce. Today, one of the top priorities for HR is maintaining a talent pipeline, driving high performance throughout the organization and experimenting with new HR practices based on the needs of their people. This HR contribution becomes all the more prudent in a economic downturn environment.

One of the key roles played by HR is to develop the leadership pool for the organization. Shopping for Leaders in the open market will become increasingly risky and difficult on the contrary building leaders will be the only way to succeed. Over the years, HR has thus become strategic to business; there are many examples in Indian as well as global Companies where HR Heads have been made a part of the Board of Directors. Hence during the downturn a calm & balanced approach on people decisions becomes the pre-requisite to define the roadmap to normal times.

In the present business environment HR function has to demonstrate a strong relationship between workforce practices and business performance. This will be done through advanced data-mining and the predictive modeling of human resource processes i.e. talent development, Performance Management etc; to identify new business insights. In other words, HR would continue its focus on human resource measurements.

HR is accountable for driving performance at the organizational, team and individual levels. I think that today’s focus on high performance is a growing recognition through reward and recognition, performance management, and people development etc. Instead of focusing on individual motivators, HR functions must begin to look at driving performance as an end-to-end process that begins with goal-setting and alignment, ensures accountability for achieving results, includes thorough and consistent feedback, and ends with differentiated and targeted rewards and developmental opportunities..

While dealing with the downturn most of us negate or pay less attention to the people aspect in our business, as we are more interested in managing our bottom line. In the trying business circumstances similar to the one we are experiencing in the past 9 months, many organizations have found a short term solution in laying off their employees, while few have been able to actually demonstrate their belief in ‘People Power’ by retaining them and ensuring a long term competitive edge for their company. It is high time that we acknowledge the fact that employees are the key differentiating factor for any business organization, as they ‘Draw, Drive & Deliver’ the business results. The underlying principles of any business model, therefore, should always aim at, keeping the employees motivated & engaged. The leadership should take time out for employees & have one to one dialogue, communicate consistently & honestly, connect each employee to the organization by emphasizing their contribution. In fact the motto for top leadership should be “Be there” for your people & most importantly, “listen to your employees.”

A business has both internal and external customers. In an economic upswing or downtrend, everyone gets affected, though the extent may vary. The key to handle this is to get back to the ‘Basics’ - Strong leadership, investment in key resources, thorough planning, improving productivity, renewed focus, out of box thinking & innovations and customer obsession. However, this can actually happen only if one has a competent, engaged and highly motivated employees.

Unquestionably, the winners on the other side of this global downturn will be the organizations with the strategic leadership talent that can drive innovation and growth. Consequently, the nurturing and development of strategic leadership talent is vital and should be on the agenda of boards. The ability of a company to deal with difficult situations is to a large extent dependant on the mental strength & positive mindset of the top leadership, as well as the organizational culture. In my view looking at counter measures in the downturn situation is more of a reactionary approach. The organizations must look at up scaling the People Power through innovation & growth and stay focused on people processes when business environment is on the upswing.

To conclude, let me say Corporates have to choose between a short term approach of going for knee jerk reactions and viewing the employees as an overhead cost or talking a prudent view of people as the talent pool or people power which in the long term can help Companies to ride out hard economic times and improve their overall business performance and enable consistent organization growth.

From

SY Siddiqui

Managing Executive Officer – Admn (HR, Finance & IT), Maruti Suzuki India Limited And President – National HRD Network, Delhi Chapter

Building HR Strategy, Business Knowledge, Change Orientation, Strategic Thinking & Alignment SY Siddiqui