Updated: Oct 28, 2021
We all have competition, some are direct competitors offering the same products and services. How do you compete? Lowering your prices? We aren't in business to give away our skills for free. So how do you compete then? With both direct and indirect competitors in your industry and neighbouring industries? Two simple weapons that can't be copied... Organisational Design and Human Resource Management.
How can organisational design and human resource management possibly be competitive? You would be surprised. What makes these excellent secret weapons first comes down to the fact that they are not easy to copy. You try to beat your competition with new products, a new way of doing your services, a new manufacturing strategy... and a few months down the line you will see your innovations in almost every competitors business. Why? Because they are easy to copy and benchmarking is one of the most common strategies of competition.
Both your organisation design and HRM are extremely difficult to copy giving you a competitive edge that your competition doesn't have. Why these two elements are so effective comes down to what they have in common... people. Your people are the resource that is difficult to copy if your team is encouraged to risk-take, be creative and innovative. How do you encourage this? Through your organisational design and HRM systems.
Think about what your organisational structure looks like. Too often, business owners cannot answer that question beyond, "I'm the boss and I have (insert number) of employees". Your organisational structure is so much more than that, it involves how your team is systemised, coordinated and supervised, your team strategies from collaboration, innovation and organisational culture... and why does this matter? First, you will get the most productivity out of a team who share the same organisational vision as you. If your team prefers to make decisions, be less supervised and more responsible for their work.. a conventional structure will not be beneficial. The reverse is true for a team that does not want more responsibility than their basic duties, running under an organic structure may raise some issues.
This is where your HRM systems are so important. First, hiring a new employee costs double what retaining an existing employee does. Secondly, a transparent and honest job preview reduces turnover. Thirdly, the biggest factor in staff turnover is whether they relate to the organisational values. If you nail down these, you'll increase your productivity, reduce absenteeism and turnover and overall employee stressors.
Where does that leave you? With a strong, ever growing competitive and skilled team that cannot be easily duplicated by competitors. The smooth operations of your business will increase your customer satisfaction and thereby your profits.