These days, organizations are facing rapid, often unforeseen changes in their external environments. This transition that the organization experiences to cope with external disturbances is termed as "Environmental Shock". Environmental shocks resulting from major shifts in technology, economic forces, political regimes, or, in some cases, from natural disasters, can create substantial uncertainty in an organization. Environmental shocks can create conditions of uncertainty and affect mind-sets and strategies of the organization. As the speed of change in external environment continues to increase, leveraging skills and talents of the employee is the fundamental competency needed by managers, supervisors, human resources staff, and organization leaders. To leverage human capital, it is of utmost importance to make people and organization, as a whole, accept the "environmental shock'. Employee acceptance of environmental shock is increased by organizational commitment, a harmonious industrial relations (IR) climate, education, job motivation, job satisfaction, job security and positive affectivity.
Need to Understand People
A study found that -
(a) employee's psychological capital (a core factor consisting of hope, efficacy, optimism, and resilience) was related to their positive emotions that in turn were related to their attitudes (engagement and cynicism) and behaviors (organizational citizenship and deviance) relevant to organizational change;
(b) mindfulness (i.e., heightened awareness) interacted with psychological capital in predicting positive emotions; and
(c) positive emotions generally mediated the relationship between psychological capital and attitudes and behaviors.
Whether the environmental shock takes the form of a merger, acquisition, outsourcing, downsizing, streamlining or restructuring, an organization cannot successfully achieve its business and financial objectives until a critical mass of employees have completed their individual transitions.
All changing organizations struggle with people related issues. Most attention is usually given to the organization in terms of structure, processes, tools, measurements, policies and procedures, but for the transition to be successful, people need to "buy in" and be committed. Their individual interests, values and competencies must be effectively aligned with the organization's vision, culture and capabilities.
Transition within an organization typically becomes mis-aligned from the combination of two variables: - Different Function Realities: Senior managers often have access to information soon and, therefore, have a "jump" on moving through the transaction from the previous organizational state to a desired state. They also tend to be the drivers of the change and have more control than middle managers and other employees. Middle managers, although intellectually on board with senior management, need more time for their emotional transition than the senior executives expects.
Different Personal Responses to Change: Individuals may be scattered across on their personal responses to change. The result is a mis-alignment of emotions, understanding, effort and commitment, that impacts negatively on the performances of the individuals and the organization as a whole.
Effects of Environmental Shock
Environmental shock introduces some change and change brings resistance in the organization. Resistance is an inevitable response to any major change. Employees aren't really resisting the change, but rather they may be resisting the loss of status, loss of pay, or loss of comfort. A psychological dynamic called a "Competing Commitment" is the real reason for employee resistance to organizational change. The change is not challenged, but rather it is resisted, or not implemented at all because the employee faces additional issues and concerns related to the change.
Any social, economic, or environmental shock hits harder those people who are already vulnerable and have fewer resources to cushion themselves with against the consequences, ex ante, or to cope with the consequences ex post. Because the ability of an organization to align its strategy with the demands of its external environment is critical to continue viability, significant environment changes should result in a realignment of organizational strategies to fit the new environmental conditions. At the same time, radical environmental shift may also create opportunities for organizations to move in new strategic directions. There has to be an organization-wide learning culture that touches and connects all employees. Such culture has a unique ability to create cultural traits important to high performance, or to change traits that are impeding success. This way organization is ready for any sort of environmental shock.
Leadership Strategies for Leveraging Human Power
The role of human capital in today's organization has been going into a revolutionary phase. As the workplace moves to a service and information economy, savvy organizations are increasingly becoming aware that sustaining talented human capital is very critical for their survival in this ever-changing business scenario.
The workforce is in a state of continuous evolution. The technological revolution, the influence of the media and the impact of globalization have resulted in dramatic social, political, and economic changes world-wide. New demographic patterns are taking shape in the workplace. For instance, the labor force is becoming more diverse than ever before, the percentage of college graduates seeking jobs is growing considerably, and also the growing role of women in the workplace. Preparing such a "Heterogeneous Mix" of people to be ready for an environmental shock cannot be tougher.
Leveraging the human capital for competitive advantage can be done by balancing: -
Professional and Technical Knowledge
Product and Process Knowledge
Effective Understanding of People
To leverage the strengths of human capital, successful leaders engage, empower and encourage employees. Leaders understand that people strive to achieve their best when the leader focuses the energies of the followers using three leadership activities: -
1. Reinforcing their key competitive behaviors (which operation behaviors prepare for the future, sustain team momentum, and keep you competitive).
2. Fully engaging them in the experience of change (how much and how meaningfully are your people engaged in or given ownership of organizational change).
3. Immersing everyone in a changed environment (in what ways are you making change inevitable through corporate policies, structures, processes and your expectations).
Developing Human Capital
Train and develop at all levels.
Encouraging wide-spread involvement.
Transferring knowledge.
Monitor progress and track development.
Evaluate human capital -
* Employees must share knowledge and work together, collectively, to reach organization goals.
* Firms often use 360-degree evaluation and feedback systems.
* Managers' success cannot compromise the organization's core values.
Conclusion
The 21st century is being called the knowledge era. The commoditization of technology and technical job skills is ever-increasing. The high-valued assets of organizations often appear to be intangible. What is it that sets one organization apart from others that offer similar or the same service and product? It is the Human Capital assets the organization possesses. It is well understood that people are the prime resource today. So, it follows that we have the best chance of leveraging our investments if we build on this resource.
Many companies tend to think of business in absolute terms of assets and liabilities, profits and losses, revenue and expenses. However, the fact is that without employees there is no business. To make an organization environmental shock-proof, there is a need to make employees change-proof. Employees can accept a shock, when they have support. Edward Lawyer says that there are three major criteria, which, acting in concert, can create winning organizations, and they are human capital, organizational capabilities, and core capabilities and core competencies. All have a common thread in the sense that organizational capabilities, and core competencies, also, require the right kind of human capital, because they largely depend upon the skills and talents of individual employees in an organization.
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