On Sunday June 18, 1815 as Napoleon breakfasted off silver plates at Le Caillou, Waterloo, having just defeated the Prussians two days earlier at the Battle of Ligny and hot on the heels of the first Duke of Wellington retreating army, defeat was the furthest thing on the French Emperor’s mind. General Gebhard Leberecht von Blücher Prince of Wahlstatt was the commander of the defeated Prussians. We will read more about Blücher soon after.
As the battle lines were drawn out, Napoleon’s every intention was to separate Wellington from his Prussians ally, and to drive the Seventh Coalition of United Kingdom, Netherlands, Prussia, Hanover, Nassau, and Brunswick to the sea! This prelude Napoleon’s triumphant return to Paris from exile from the Island of Elba, now famously known as The Hundred Days.
Napoleonès Armée du Nord comprises of veterans who were fiercely loyal and marched to sounds of guns and cannons for him, and this they did. Part of the army was also the indefatigable Imperial Guard, the creme de la creme of the Armée du Nord. In contrast, Wellington’s motley army was made up of, in Wellington’s own words “an infamous army, very weak and ill-equipped, and a very inexperienced Staff” (Wikipedia 2018).
The Emperor of France had every reason to be confident indeed.
From 11:50 a.m. when Napoleon ordered The Grand Battery to begin its bombardment, the emperor having rested on the confidence of his previous victory over the Prussian Army and Wellington’s retreat after the Battle of Quatre Bas, he had then sent a third of his army under Marshall Grouchy to pursue the retreating Prussians. This military decision was to be one of the crucial errors to be made by Napoleon. As the battle commenced and raged on, never once Napoleon would have thought that this would be his last hurrah and also his worse defeat, even eclipsing his status as the “French star in the European continent.”
Perhaps it was best said by Carl von Clausewitz, the Prussian, soldier-historian and theorist who served as a young colonel during the Battle of Waterloo, “He (Napoleon) and his supporters do not want to admit the huge mistakes, sheer recklessness, and, above all, overreaching ambition that exceeded all realistic possibilities, were the true causes (of Napoleon’s defeat).”
In other words, Napoleon and his organization of the Armée du Nord had failed to see the need for a transformative change in the way they approach the business of war, culturally as a unit, having rest on tried and tested methods of the old.
Drawing from the aftermath of Waterloo, we found several patterns that emerge from Napoleon and his lieutenants which are analogous to Fortune 500 today. Let’s have a look at some of the prominent ones.
Blucher Kept His Promise
Night or the Prussian must come.
—Wellington at Waterloo
It was apparent to Wellington, as he was dispatched back to London after the war, that the Prussians were the deciding factor that won the epic battle in Waterloo. When Prussians came to his aid at the 11th hour, most of Wellington’s lieutenants were either killed or wounded. And he was trapped in an infantry square, a defensive position. Wellington’s center was about to be smashed, and with no reserves at hand, defeat was imminent if not for Blücher, keeping his word in coming to Wellington’s aid. After the battle of Ligny the Prussians had crucially retreated northwards, parallel to Wellington’s line of march allowing them to continue to support Wellington throughout, instead of going east and back toward their supply line.
Napoleon had grossly underestimated the conviction of the Prussians.
It was while Napoleon was having breakfast, that Marshal Soult suggested Marshal Grouchy, whom he had sent to pursue the retreating Prussians, should be recalled to join the main force. Napoleon then had famously said, “Just because you have all been beaten by Wellington, you think he’s a good general. I tell you Wellington is a bad general, the English are bad troops, and this affair is nothing more than eating breakfast.”
Again, when Napoleon’s brother, Jérôme Bonaparte, told him about some gossip which was overheard by a waiter between British officers at lunch at the “King of Spain” inn in Genappe that the Prussians were to march over to support Wellington, Napoleon declared that the Prussians would need at least two days to recover and would be dealt with by Grouchy.
Time and again, Napoleon had chosen to ignore the possibility of the fact that Blücher could have and would later turn up at Waterloo to engage him on his east, putting pressure on his troops and drawing precious resources from the primary battle.
Oscar Munoz, CEO of United Airlines, had on that fateful day chose to ignore the video that was going viral and to believe a version of the incident which was convenient to him, labeling David Dao, the bloodied victim as “belligerent” and “disruptive.”
While Napoleon may have had time to correct his disposition, Munoz, living in today’s fast-moving world of social media do not have such luxury, he had had to get it right the very first time. Both Napoleon and Munoz had dealt themselves the killer blow even before they can act upon that they might have had for their organizations.
Marshall Grouchy’s Pursuit of the Retreating Prussians
After defeating the Prussians at the Battle of Ligny, Grouchy was ordered by Napoleon to pursue the Prussians, “with your swords against his back” which he followed stubbornly to the letter with a third of Napoleon’s army. The Prussian was however not routed but was retreating toward Waterloo to support Wellington. This maneuver resulted in Grouchy engaging in a smaller battle with the Prussian rearguard at Wavre which he won but rendering him too far away to support Napoleon at Waterloo when the Prussians came up his right flank. Grouchy had refused to listen to his subordinate’s General Gérard’s advice to “march to the sounds of the guns”.
For most Fortune 500, working to Standard Operating Procedures is a norm and an effective way to manage such a behemoth organization. However, in today’s VUCA world, one needs to adapt with “march to the sounds of the guns.” This situation is seen clearly in the case of the United Airline’s fiasco. As the video of David Dao was going viral, Munoz, the CEO was still relying on carefully crafted and delayed archaic corporate communication statements. Munoz may have won a small battle for his shareholders but had lost customers and more importantly, the loyal frequent flyers.
The Attack of the Imperial Guard
Napoleon’s elite Imperial Guard were committed to the battlefield late into the evening to salvage a victory when the tide had turned. About five Middle Guard battalions, the second most experienced veterans while the Old Guard formed the second line and had remained in reserves, attacked Wellington’s allied troops directly. The undefeated Imperial Guard followed behind. The Old Guard was the elite of Napoleon’s veterans who had served him since his earliest campaign, victorious and fiercely loyal to the Emperor. Highly trained and imposingly built and almost always above the average height of six-feet-one, the Old Guard form the crux of Napoleon’s army. With their reputation preceding them, the other French soldiers called the Imperial Guard, “The Immortals” (Wikipedia). However, the Imperial Guard were severely outnumbered as they joined the battle and fought against overwhelming odds.
Why the Imperial Guard were committed to the contest so late into the battle remains unknown. Many would concur that had they been unleashed much earlier and perhaps together in support of Field Marshal Michel Ney earlier disastrous lone cavalry charge, and then Wellington could have been defeated.
Analogously, there are plenty of talents in Fortune 500 in the likeness of the Imperial Guard, especially the Old Guard, waiting to be unleashed. Managing these talents include freeing them from a top-down culture to allow them to fulfill their potential. Once they are “freed” at the right timing, not only these talents would be able to perform to the best of their abilities but also for them to “own the shared vision” with the organization.
Do allow us to illustrate with an example.
For instance, Key Performance Indexes are often cascaded down from the CEO right down to the factory floor worker whereby the CEO only sees the financial spreadsheet and the factory worker is only able to look within his workstation and not beyond it.
Often than not, the company’s vision and mission statements are also lost in translation when shared from the CEO to the rest of the employees in the organization. This usual practice of making broad strategic vision statements not only cause a disconnect on how it applies to daily work but also disengagement from the company’s vision. Supporting this observation is an article written by Kotter (Forbes 2013) that cited a research paper stating 70 percent of employees of companies can neither remember nor recite their company’s vision. Therefore we can see that by failing to identify and to have a sense of shared vision with that of the company’s would render these high-potential talents ineffective at moving the company’ strategic goals at their respective work levels.
At Waterloo, when the Middle Guard beat a retreat after suffering heavy casualties from the Prussian horse-drawn artillery fire, point blank volley and a bayonet charge from the British Foot Soldiers, the Old Guard held their ground despite the panic that cut through the French lines with shouts of “La Garderecule. Sauve qui peut!” (“The Guard is retreating. Every man for himself!”)
The Old Guard remained in square formation, to protect infantry from cavalry charges with the goal of not presenting the rear or sides of the soldiers to cavalry, protecting Napoleon’s retreat with a great price! In Marshall Ney’s own words, “yielded ground foot by foot, till, overwhelmed by numbers they were almost entirely annihilated.”
We can all see that once talents are empowered to act according to ground condition and with a shared vision, in this incident to ensure Napoleon’s safety, the result was remarkable. If only the United Airlines staff at the plane or the ground crew had acted like the Old Guard, not only would the disaster been avoided but also they would have won many more frequent flyers. This episode brings the all-important question on how can we achieve such empowerment and shared vision. The short answer is the introduction of the Department of Startup (DOS) into a company.
Department of Startup (DOS) and HR
What is then the DOS? In reality, the size of a startup may be big enough to be a department in a Fortune 500. Most of the time, the Department of Human Resources (HR) alone would dwarves that of a startup.
However, the DOS may not necessarily be a physical entity, but it is an organizational cultural change agent.
The DOS is, in a nutshell, a catalyst for the introduction of startup culture into the Fortune 500. The purpose is to facilitate an organizational change within the Fortune 500 to bring upon characteristics of a successful startup especially in being innovative, agile and shared vision including shared responsibility leading to empowerment of the organization’s employees.
To understand the significance of DOS in the 21st century, it is imperative that we examine what drove Fortune 500 in the previous century. The entity of interest is no other than the Department of Human Resources (HR).
The 20th century saw the formation of the Department of Human Resources (HR) as the engine to propel the organization to succeed through talent management. The evolution of Human Resource Management (HRM) after that, was in many ways a response to the demands of the market of its time.
Professor Chris Mabey (Mabey 2011), traced the historical antecedents of HRM while noting several distinctive phases which contributed to our modern day HR. In his study guide, “Introduction to HRM and the origins and growth of HRM,” using the United Kingdom as a point of the study, he identified, five significant evolution phases which are the following:
- The welfarist phase—this began in the late 19th century during the Industrial Revolution when concerns of the health and safety of workers prompted legislation and formal appointment of “welfare workers.”
- The industrial efficiency phase—by the turn of the century, there was an increased interest in how working conditions affected labor efficiency or work performance. This interest was influenced by the military use of “scientific” selection techniques, psychometric tests and morale and its effect on productivity. The aftermath of the two World Wars had also necessitated the need to increase productivity due to a vast reduction number of labors at hand.
- The personnel administration phase—with the rise of trade unions and collective bargaining, “industrial relations” came to the fore in 1930. Personnel function then became more bureaucratic, and standardization introduced into all areas of an organization such as selection and recruitment, job training, and job design. “Human relations” began to take center stage and under the rising influence of behavioral sciences, organizational psychology and sociology.
- The industrial relations phase—the 1950s saw the acceleration of industrial conflicts and collective bargainings, leading to the belief that “employee relations” are paramount to the success of any organizations. Communication and motivation were then the keys to reaching utopic employee relations, opening doors to research and consultancy in behavioral sciences in areas of selection and recruitment, leadership, employee motivation and more. With an increased influence in driving the organization forward, personnel practitioner took a turn toward professionalism with specialized training and the introduction of professional bodies such as the Institute of Personnel Management.
- The HRM phase—with the onset of recessions in the 80s and the climbing unemployment, the influence of the trade unions began to ebb. Traditional personnel managers were no longer relevant and a “new specialist contribution, while simultaneously locating themselves unequivocally within the management team” (Legge 2002) was needed. In a nutshell, personnel practitioners required to reinvent themselves. Reinvention pointed toward astute management of human resources and organizational culture to create a competitive advantage for each organization.
- Corporate strategy was the new black. While renown corporate strategist, Porter (1985), was looking into generic strategies for competitive advantage, other academicians such as Beer, Spector, et al. (1985) were arguing that the most sustainable form of corporate strategy stems from effective use of human resources.
At that time, pieces of evidence on these arguments were pressing at the doors of the Western world. Japan, as a nation with manufacturing companies such as Toyota, Mitsubishi, and Sony, were proving to the world that as a country with scarce natural resources, one can punch above its weight through ingenious human resource policy and strategy. Japanese corporate companies achieved this feat through a more collective and team approach to employee relations whereby the organization will take care of not only the employee but also his or her family well-being from education for the children to healthcare. In return, the employee would then internalized the company’s value and work for the best interest of the organization, giving birth to the term “salaryman.” The result was an eye-opener to the Western organization as the approach “resulted in forms of corporate culture and organizational commitment among staff which removed the need for either traditional market-based controls or the controls of a bureaucratic, rules-led corporation” (Mabey 2011).
SINGAPORE—THE LITTLE RED DOT!
Singapore often referred to as “the little red dot”, has successfully proven how strategic HRM can lead to outstanding results in nation-building. For an island country with a population just shy of 2 million when it gained its independence in 1965, Singapore had no natural resources, and at 716 km,2 Singapore is 1/40th the size of Hawaii. With no hinterlands to depend on, Singapore had to purchase fresh waters for consumption and sand for reclamation from the State of Johor, a neighboring state of Malaysia. The only thing Singapore had was her human resources.
Lee Kuan Yew, the Founding Father of Singapore, a firm believer of talent management and personality assessment pulled Singapore from Third World to the First in just slightly more than one generation. Singapore, once one of the poorest countries in the world has risen to one of the highest per capita GDP of approximately US $56,000 in the world by 2014. Her “most competitive economy ranking” in the same year was only behind the United States of America and Hong Kong, according to the World Bank’s World Development Indicators.
Lee Kuan Yew was in office from 1959 till 1990. Under his leadership as Prime Minister, the brightest Singaporean were sent to the Ivy leagues for an education and to return as scholars serving in the administration of the country. Meritocracy was placed well above lineage, association, and inheritance. Not satisfied with growing just her talents organically, Singapore sought the “foreign talent” globally and from the South East Asian region especially that of her neighbor Malaysia. The author, like many Malaysians before him was given an engineering education at the prestigious Nanyang Technological University of Singapore, with a partial scholarship and with the Singapore government as his guarantor at the bank.
Today, Singapore is a world renown financial and trading hub, a prosperous city-state of 5 million with world’s leading education institutions, healthcare, transportation and an economic powerhouse, the envy of many. And sound strategic HRM is one of the building blocks.
Classical Human Resources Management
Academicians and practitioners had made many attempts to define HRM. HRM, however, remains elusive as each definition carries certain assumptions and goals with it. Nonetheless, Chris Mabey, opined that Beaumont (1992) had managed to describe HRM at its uncomplicated form, that is, “the key message of the HRM literature is the need to establish a close, two-way relationship between business strategy or planning and Strategic Human Resources Management (SHRM) strategy or planning.” In essence, the strategic deployment of human resources must first support the business leading to many HR practitioners identifying themselves as Business Partners today. And vice versa, the industry must invest in managing the human capital of the company to unleash the potential of these talents. Also, to secure the employee’s commitment, loyalty and to do their very best for the company.
The emphasis on this bilateral relationship is not to be trivialized as it would eventually translate to tangible results in the company’s key performance indexes such as revenue, profitability and stock price.
To further understand the model and framework of HRM, most HR practitioners and academicians identify with two schools of thoughts in what is being viewed as classical HRM, that is, that of Michigan Institute of Technology and Harvard Business School. The former focuses on strategic management via the writings of Fombrun, Tichy, and Devanna (1984) in Strategic HRM while the latter on human relations in the literature Human Resources Management; a general manager’s perspective by Beer,et al. (1985).
In the Michigan school of thoughts, the implementation of the corporate strategy is the main thrust with business strategies, organizational structure and HRM designed to support it. HRM systems would include selection and recruitment, “right fit,” reward, motivation, and development.
The Harvard group (Beer, et al. 1985) on the other hand, focuses on the manager who has the capacity to make right decisions that would allow the relationship between the employees and the company to flourish, leading to the desired outcome for all key stakeholders of the organization. The keyword here is the relationship or workforce relations. Thus, the focus is on HRM strategies that could bring about unity, integration, team motivation and collective values to drive the company’s performances. In contrast to the best-fit approach, this model drives toward “best practices” or “an internal strategy: a strategy for how its internal resources are to be deployed, motivated and controlled… external and internal strategies must be linked.” (Beer, et al. 1985).
Building on these two schools of thoughts, Mabey (2011) broadly described four broad approaches to connect strategic HRM to organizational strategy, capability, and competency. Each method has its own merits and demerits but overall allows a formulation of a framework that will work in any organization’s strategic HRM.
The four (4) approaches are:
To design HRM strategies, structures and systems to fit the organizational strategy.
HRM is a tool to enhance an organization’s capability to execute and achieve corporate strategy. All HR strategy, systems, design, policies and rewards must be designed based on the corporate strategy. In this case, HR practitioners would generally be known as business partners, working hand-in-hand with line managers to execute corporate strategy via strategic talent management. This classic view of HRM would either use a “best fit” or a “best practice” approach in designing HRM strategy that fits the strategy.
Organizational core competencies and capabilities dictate HRM
strategy.
This approach takes a “resource-based view” of HRM whereby the first task of HRM is to look internally and then to identify, develop and deploy organization’s competencies for organizational strategy development. Although this may seem to be restrictive, it’s very efficient when an organization could harness its human capital’s competency for new business strategy. Areas such as skill transfer and leadership are highly appreciated in such an approach.
To focus on the organizational capability to formulate the strategy.
This approach questions the assumption that the organizational strategy is sound and that HRM strategies are then developed around it. However, what if the corporate strategy itself is flawed due to various reasons such as inept leadership, flawed market intelligence and the gap in understanding market dynamics? Here, HRM main focus is to ensure that the organization as a whole is able to formulate strategies that are relevant to the corporates desired outcome.
To focus on organizational learning and development capability.
The focus here would be for HRM to be an engine for “change management” or a “change agent” in the organization. To survive or thrive in an increasingly competitive marketplace, the organization must be able to learn, adapt and develop new capabilities. Failing to do so has seen countless companies being made redundant and subsequently filing for bankruptcy. The heart of this approach is for HRM to develop such “change capability” in the organization. Not surprisingly, learning culture would be one of the hallmarks of this strategy.
Therefore, regardless of which approach is being adopted, in the heart of HRM is the development of employees to achieve the desired outcome of a corporate strategy. And with the fundamental shift toward examining the “outcome” or “performance” in applying HRM in the 90s, the causal effect of putting people first for organizational success was irrefutable. Pfeffer and Veiga (1999), quoting an award-winning study on high work performances practices in 1996, demonstrated that “a one standard deviation improvement in human resource system was associated with an increase in shareholder wealth of US $41,000 per employee.” Imagine the wealth creation for shareholders today, when an organization invests heavily into its people and HRM strategy.
Once the financial benefit of HRM was established, there was no turning back. HRM brought not only economic benefits to the Fortune 500, but it also spawned an entire industry in human resources consulting worth US $18.4 billion in 2007 alone. Human resources consultancies focus on several core practices such as:
Employee engagement
Employee compensation and benefits
Talent Mobility (Expatriation)
Actuarial and effective retirement programs
Post mergers and acquisition management programs
Henceforth, there is never a shadow of a doubt that HRM had brought about enormous success to the Fortune 500 in the last century and will continue to play a significant role in this century. The question that begs an answer will be if an effective HRM is enough for this century of rapid innovation, social media usage, the Internet penetration, Netizens influence and where information travels at the speed of virality?
The title of the Harvard Business Review issue of July–August 2015, “It’s time to blow up HR and build something new.” says it succinctly, that there is a need for a reinvention in HR, refocusing on people before strategy and what we, the authors believe strongly in—a new organizational culture practice via the DOS.