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The Comfort of a Rule

October 1, 1996
Related Topics: Managing International Operations, Policies and Procedures, Featured Article
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I had a line manager call me a few years ago and say "I want a flexible global human resources policy that will let me do what I want." My response was, "You don’t want a policy ... Do whatever you want!"

This sort of experience is common in companies beginning their globalization journey. Managers are operating in different markets with little experience and a great deal of pressure to perform. They may have been operating in a command-and-control environment and a new, more businesslike culture is yet to be defined. Familiar corporate support systems don’t exist and they aren’t sure what to do, so they’re looking for the comfort of a rule.

This is an ideal opportunity for human resources to prove its strategic worth. We in HR must focus policy development and other human resources support systems on the creation of a business culture that will encourage creativity, facilitate growth and advance bottom-line results. You’ll know the culture is effective when it allows key decision making and capital to freely flow to the customer interface level of the organization. This is the real purpose of policy creation and human resources strategy.

It definitely isn’t easy.
Developing global human resources guidelines can be a frustrating experience. The number of variables that need to be considered make it a difficult task. And by the time policies are created and communicated, the fast-paced evolution of global business often renders them obsolete. In addition, you may have many independent business units globalizing at their own speeds, which further complicates the policy process.

Even so, the policy development exercise is an important activity and an educational opportunity. It allows HR to provide an issues-discussion platform and to build a global decision framework for the organization. The exercise of drafting a policy also can serve as a communications and learning exercise to promote speed and clarity in the resource allocation process.

In creating policy, the key areas I believe human resources professionals must understand include:

  • Business globalization strategy
  • Sales and marketing approaches
  • Products and services
  • Organization structure in relation to customer service
  • Resource allocation and change management approaches
  • Shareholder value method of measurement.

The development of any corporate policy must take into consideration these business issues. You should be able to explain any global policy in terms of how it will more effectively support fiduciary responsibilities, major strategic business thrusts or corporate culture development issues (i.e., governance).

All other written policy should be developed and managed at lower levels of the organization. Providing calculation standards, functional guidelines and information systems are appropriate activities for a corporate HR function. In a mature global organization, human resources should not be prescriptive. As the business culture matures, it becomes self-correcting and the need for many policies dissipates.

We need a policy!
Someone is bound to come into your office tomorrow and suggest: "We need a policy to deal with this thing or another." This is especially true in matrix management organizations that frequently are shifting leadership and focus. The issues to keep an eye on in this arena are those surrounding governance and asset distribution. Spending some time to think through these areas and advancing policies that will make these decisions more strategically focused are critical responsibilities. Many times these can be more "comfortably" accomplished in a matrix organization by human resources rather than line management and can be a key leverage that advances HR professionals to the center of a globalization strategy.

HR investment strategy.
You need a strategic investment process for the HR function. You need to sit down with line management to decide how you’re going to be most effective in executing the business strategies with limited resources. You also need to commit to specific goals and critically measure progress.

HR policies and policy development are key factors, but they can’t be managed in a vacuum. If the business is not mature in its thinking, more emphasis needs to be placed on the policy area to develop the global competencies at the right levels of the organization that allow the business to grow and mature.

Construct a strategic framework.
Be proactive. Develop your own strategic approach—or borrow ideas from other sources to construct a strategic platform for the function within your business. If you don’t approach the globalization challenge in a mature business-focused manner, then you’ll lose a great opportunity to move into the change management position and clearly add value to the business.

Global Workforce, October 1996, Vol. 1, No. 1, pp. 29-30.

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