Human Resources Has to Become a Part of Strategic Business Development

Yevgeny Isaev
Chief Executive
Adapt-to-Change Recruitment Company Avenir Group

The ideas of strategic marketing in the 1990s led to a surge in customer-oriented marketing approaches: the idea to listen to the customer, study his needs and tailor the products and services to suit these needs. This approach is considered superior to the three other main management strategies: product orientation (“we make superior products, all you have to do is to put them on the market”); sales orientation (“never mind the products, if you know the sales tricks clients will buy anyway”); and financial orientation (“squeeze out all the costs and leverage the assets and success will follow”).

However, most companies are still governed by these three principles and especially the last one, financial orientation. No surprise then that these are the firms that have suffered worst from the financial meltdown. Only those firms that are focused on satisfying customer needs in the long run will be around for good. Look at Ericsson, the Swedish telephone maker that has been producing superior telephone networks since 1876. The world has seen a lot of gimmicks between then and now but, with a focus of continuously delivering systems to satisfy the client’s needs, Ericsson is still the leader.

Marketing guru Peter Doyle took customer-orientation further and spoke of customer-led businesses, stressing that the whole business model from strategy to organization should be transformed to satisfy customer needs. Front-line people dealing with customers had formerly been on the bottom of an organizational pyramid but they should now be depicted on the top just under the customers themselves. The place of middle and top management would be below them with the role of enabling the front-line people to better serve the customers.

We want to take this idea one step further and promote a market-led approach instead of the purely customer-led model. The difference can be illustrated by considering that in the customer-led model, perceived needs affect what should be done by the organization, but in the new market-led approach the wide range of market impulses — of which customer needs are a major component — will determine the fundamental choices of which businesses to be in and in what way.

In other words, the market impulses will determine which customer needs the company wants to satisfy. This choice is based on all the opportunities and resources that the market provides and the challenges and limitations that it sets. When new technology becomes available, the old business model is affected for good or for bad even when the perceived client needs have not changed. The same can happen through the impact of permanent changes in the availability and prices of raw materials.

Similarly, new laws can have a major impact on the business over night, and so on. In these conditions of cardinal change, a firm might have to let go of the idea of trying stubbornly to satisfy the client’s needs as they have been expressed. And this happens all the time: companies exit the businesses where they cannot in the long run profitably compete. Then again, the market-led company will be in a position to anticipate customer needs, because the same factors that affect the producer affect the customer. And therefore the market-led company will be able to adapt, not only itself to the new conditions, but also to orient customer needs in the new world.

Human resources form a major factor among the opportunities and challenges on the market. Companies therefore have to broaden their horizons when considering candidates, indeed they need to reconsider the whole idea of a vacancy. Most companies of today when announcing a position churn out something that amounts to a recipe or formula of the required candidate and then the recruiter is supposed to find a person that suits the recipe.

We challenge this idea. Instead, we maintain that recruitment has to be more oriented towards the market, or even more, let the market direct the recruitment. This means that companies should let their strategic intent determine the type of skills and personal qualities that are in demand and go out to seek that talent on a broad scope. And the vacancy should be tailored to the person as opposed to trying to fit the person to the vacancy. This obviously means that the organization is adapted to a modern low-barrier matrix where superior internal and external communication is the ideal.