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This is the submitted version of a paper presented at 27th Workshop on Strategic Human ResourceManagement, Brussels, Belgium, April 12-13, 2012.

Citation for the original published paper:

Rundquist, J., Florén, H. (2012)

Human Resource Management and Innovation Strategy Formulation and Implementation.

In:

N.B. When citing this work, cite the original published paper.

Permanent link to this version:http://urn.kb.se/resolve?urn=urn:nbn:se:hh:diva-19400

Paperpresentedatthe27thWorkshoponStrategicHumanResourceManagement,2012,Brussels

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HUMAN RESOURCE MANAGEMENT AND INNOVATION STRATEGY FORMULATION AND IMPLEMENTATION

HenrikFlorén&JonasRundquist

CentreforInnovation,EntrepreneurshipandLearning(CIEL),HalmstadUniversity,

[email protected];[email protected]

Keywords: Strategic Human ResourceManagement, Strategy Formulation, Strategy Imple-mentation

IntroductionTheabilityoffirmstoinnovatehasbeenestablishedasanaxiomforfirmperformancewith-inorganizationalstudies.Themainreasonisthatcompaniesneedtodevelopandintroducenew products and new technologies in order to be able to diversify, adapt and reinventthemselves,whichallowthemtosustaintheircompetitiveness.Anessentialfeatureofcor-porate strategy is therefore an innovation strategy. Briefly, an innovation strategy shouldhelpafirmtodecide,inacumulativeandsustainablemanner,howtofititsinnovationactiv-itiestoitscorporateobjectives.

ThispapertargetsthepotentialofStrategicHumanResourceManagement(SHRM)tosup-port the formulation and implementation of innovation strategies in companies. In thestudy,wepresumethatHRMisconnectedtothestrategicprocessoffirmsmainlyasadeci-sionsupportsystemintheformulationofaninnovationstrategy,andasanoperativesup-portsysteminthesubsequentstrategyimplementation.

Generally,strategyisdefinedasthebasicgoalsandobjectivesoftheorganization,themajorprograms of action chosen to reach these goals and objectives, and themajor pattern ofresourceallocationusedtorelatetheorganizationtoitsenvironment.

The paperwill explore the issue of SHRM involvement in strategy formulation and imple-mentationfromtwoperspectives.First,wewillinvestigatehowR&Dexecutivesandprofes-sionals conceive of this issue. Second,wewill also investigate if there are differences be-tween how HRM should be included in strategy formulation and implementation whenworkingwith corporate strategyandbusinessunit strategy (competitive strategy), respec-tively.

Researchquestions

• WhatHRMissuesarerelevanttoinnovationstrategyformulationandimplementationrespectively?

InthefollowingpartswewillelaboratetheconceptsofSHRMandstrategy.Thereafter,wewilldiscusshowSHRMisunderstoodasimportantforstrategyformulationaswellasstrate-gyimplementation,andinthatwaySHRMcontributestoinnovationperformance.Afterthat


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we argue that innovative capability is a relevant framework, and elaborate its ingredientconcepts;motivation, cognitive skillsandbehavioural skills. Thepaper is concludedwithapresentationofconclusions,managerialimplicationsandsuggestionsforfutureresearch.

OutliningtheconceptofStrategicHumanResourceManagement(SHRM)Humanresources,andthemanagementofsuchresources,havebeenstudiedduringalongperiodof time.Thetheoreticalbackgroundsof research inthe fieldareseveral,and justafewofthemarementionedhere.

The“humancapital”,andeffortstomeasureandquantifythehumancapital,hasbeentheissueofintensiveresearch.Humancapitalisthestockofcompetencies,knowledgeandper-sonalityattributesembodiedintheabilitytoperformlaborsoastoproduceeconomicvalue(Crooketal.,2011).

Humancapitalwasdiscussedearly ineconomicsandbecamean importantconceptwithinthe“ChicagoSchool”.Accordingto thisschool,humancapitalwasmainly tobetreatedasanyothercapital(suchasmachines),andafirmcouldinvestinhumancapital(forexamplebyeducationandtraining)andcalculateareturnofinvestmentonthisinvestment(Becker,1993(firstpubl.1964)).Theviewthathumancapitalshouldbetreatedasanyothertypeofcapitalhasbeenchallenged,becausehumanscreatevaluetoanorganizationthroughotherassets,andnotonlyasacapitalasset in itsown.Humans, seenasanasset,are thereforeintertwinedwithotherbothtangleandintangibleassetsofthefirm(Creelman,2004).

TheconceptofHRMhastraditionallyfocusedtheprocessesofplanning,recruitment,selec-tion, orientation, training, performance management, compensation and benefits, careerdevelopment (Robbins&Coulter2002).When strategicmanagement laterbecamean im-portantissue,astrategicperspectivewasalsoappliedtothefieldofHRM,andtheconceptofStrategicHumanResourcesManagement (SHRM)was introduced in the late1970thandelaborated upon during the eighties (Galbraith, 1979; Fombrum, 1984; Lengnick-Hall &Lengnick-Hall,1988).AspointedoutbyLengnick-Hall&Lengnick-Hall in their literaturere-view(1988),theconceptreliesontheassumptionthatbusinesssuccessisaneffectofhowtheinterdependencebetweencompetitive(business)strategyandHRstrategyismanaged.Alsoseveralotherstudies indicateapositiverelationbetweenSHRMandoverall firmper-formance(e.g.BeckerandGerhart,1996;DelaneyandHuselid,1996).

WhenitcomestotheconceptualdifferencebetweenHRMandSHRM,itisnotalwayseasyto distinguish between the two.One important difference, however, is that the former ismostly concernedwith individuals, while SHRM focuses the level of organizations and onmanagerialsystemsassolutionstobusinessproblems(Becker&Huselid2006).InthisstudyweconnectHRMtothestrategicprocessoffirms,mainlyasaninput/decisionsupportsys-tem in the formation of overall business strategy and sub-strategies (such as innovationstrategy),andasanoperativesupport system in thesubsequentstrategy implementation.Thiswillbefurtherelaboratedinlaterpartsofthistext.

Businessstrategy,innovationstrategyandfirmperformance

Abasicassumptionofthisstudyisthat(S)HRMisimportanttofirmperformanceasitaffectsbothhowstrategyisformulatedandthenimplemented(BeckerandHuselid,2006).General-


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ly,strategy isdefinedasthebasicgoalsandobjectivesof theorganization, themajorpro-gramsof action chosen to reach these goals andobjectives, and themajor pattern of re-sourceallocationused to relate theorganization to its environment (Bracker, 1980).Busi-ness strategy has received considerable attention by scholars of organizationsmainly be-causeithasbeenfoundtobeanimportantpredictorofbusinessperformance(e.g.Olsonetal.,2005).

Theconceptofstrategyiscomplex.Onanoveralllevel,largeorganizations(suchasdiversi-fied companies) have two different levels of strategy: (1) corporate strategy (also calledcompanywide strategy), and (2) business unit strategy (also called competitive strategy)(Porter,1987).Thesegeneralstrategiesthatguidetheoperationsofthewholeorganization(corporatewise andbusiness unitwise) are supplementedwith strategies of a third kind,namelystrategieswithinthevariousfunctions(e.g.manufacturing,marketing,finance,R&D,andpersonnel)oftheorganization(Dyer,1983).

Inthisstudywefocusoninnovationstrategytolimitourscope.Suchafocusisappropriateastheaimofthisstudy is toaddknowledgeabouthowSHRMcanbeusedtosustainanddevelop innovativeness among employees, teams and departments, thereby improvingresultsintheformofinnovationandbusinessperformance.Asinnovationstrategyiscentralto innovation performance (Dogson, Gann, and Salter, 2008), it is assumed that itsformulationandimplementationiscentraltosustainedinnovativeness.

The literatureontechnologyand innovationmanagementalsoemphasizesthe importanceofinnovationstrategy.AccordingtoTiddandBessant(2009),anessentialfeatureofcorpo-ratestrategyshouldbeaninnovationstrategy.Aninnovationstrategyshouldhelpfirmsde-cide,inacumulativeandsustainablemanner,abouthowtofittheirinnovationactivitiestocorporateobjectives(Dogson,Gann,andSalter,2008,p.94).

TheaimofR&Distocombinetechnologicalandmarketopportunitiestoproducedifferenti-atedgoodsandinformationthatconveycompetitiveadvantages(Dogson,Gann,andSalter,2008,p.197).Thebenefitsofinnovationstrategytofirmsareimprovedperformanceinthewaystheycreateanddelivervalueandenhancetheircompetitiveadvantage(Dogson,Gann,andSalter,2008,p.122).

AccordingtoDogson,Gann,andSalter(2008,p.96),aninnovationstrategyhasfourinterre-latedelements:i)theenactedstrategyitself,includingitstargetsand“fit”withthebusinessstrategyofthecompany,existinginnovationefforts,andthecontextinwhichitfunctions,ii)theresourcesavailableforinnovation(theassetsafirmcontrols),iii)theinnovativecapabili-tiesthatguideandenablethoseresourcestobeassessed,configured/reconfigured, iv)theinnovation process deployed to deliver results. An innovation strategy should thereforeguidedecisionsonhowresourcesaretobeusedtomeetafirm’sobjectivesforinnovation(andtherebydelivervalueandbuildcompetitiveadvantage).

R&Dismainlyaboutproducingandrealizingideasaboutproductsorprocesses.Thisisfirstand foremost a knowledge-based activity, which makes the availability and utilization ofknowledge themain predictor of the quality and viability of the ideas that are eventuallyconceived (Pasmore, 1997). A central resource for firms in the realization of innovationstrategy is therefore itshumancapital.Hence, inorder fora firmtoproficiently formulateandsubsequentlyimplementtheirinnovationstrategy,theyneedtoconsiderandassurethe


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accesstothehumancapitalnecessarytorealizethestrategy.Insodoing,firmsshouldmakeuseoftheirHRMfunctioninastrategicmanner.

To this background,we assume that SHRMwill be of importance to both how strategy isformulatedandtoitsimplementation.

Innovation strategy formulation and implementation, and the importance ofSHRM

Strategy formulation is generally conceptualized as having to do with identifying a firm’sstrengthsandweaknesses,anddealingwith itsexternalopportunitiesand threats (Porter,1987).Itincludesactivitiessuchasformulation,evaluationandchoiceofstrategy,whichinturncouldinvolveactivitiesasperformingasituationanalysis,self-evaluationandcompeti-toranalysis.

From an innovation strategy perspective, as briefly noted above, HRM-issues are of greatimportanceinstrategyformulation.Inorderforafirmtoformulateastrategythatisalignedwiththeresourcesof theorganizationand itscompetitivecontext, theHRMfunctionpos-sessescriticalknowledge.Whenformulatingan innovationstrategy, internalstrengthsandweaknessesarecriticalelements.Fromthisfollowsthatstrategyformulationnecessitatesagoodunderstandingof thestatusofhumanresourceswithin thecompanybothoncorpo-rateandbusinessunitlevel,andaccesstoexternalsourcesofhumanresources.Forexam-ple,whenevaluatingtheapplicabilityofadevelopedstrategyitisimportanttoconsiderthecapabilities (skills andmotivation) represented among company employees, and assess iftheyenables the strategy tobe implemented. Suchknowledge shouldbeprovidedby theHRM function of the firm.Without a goodunderstanding of such issues, the firm risks todevelopastrategythatisunfitwiththehumanresourceswhowill, inturn,underminethestrengthofthestrategy.

TheHRMfunctionshouldthereforebe included in thestrategy formulationprocess toen-sure that a good understanding of the present and future status of the human resourcesunderpinsthe formulationprocess.AssuchHRMhasasupporting function inthestrategyformulationprocess.

When it comes to strategy implementation, the HRM function also possesses importantknowledgeandskills.Inorderforaproficientimplementation,firmsmightneedtoincreasethe level of competencewithin the company bymeans of carrying out training programswith present personnel. Recruiting new personnel might also be necessary to succeed instrategy implementation. Both these examples would include active participation of theHRMfunctionofthefirm.


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Figure1.Illustrationofthetentativeframework

WearguethereforethatHRMneedstobeusedasastrategicmeansinboththeformulationandimplementationofInnovationstrategy.Inthefollowingwewillelaborateingreaterde-tailwhataspectsofHRMthatwillbeinfocusofthisstudy.

Skillsandmotivation

TheoverallaimofthisstudyistocontributeknowledgeonhowSHRMcanaddtotheinno-vationperformanceoffirms.Amaintenetthatunderpinsourinvestigationisthatfirmout-putintermsofinnovationrequiresinnovationcapability.Innovativecapabilityinthisstudyreferstothecapacityofafirmtocreateandimplementneworimprovedproducts(goodsand/orservices)(e.g.Subramanian&Youndt,2005).

Afirm'sinnovationcapabilitydependsonitscapacitytodeploytheresources(inputs)avail-abletoittoachievethedesiredobjective(s)(output).Thehigherfunctionalcapabilityafirmpossesses, themore efficiently it will be in deploying its productive inputs to achieve itsfunctionalobjectives(Duttaetal.,1999).Ashumanresourcesarethefocalresourceofinno-vation(Cano&Cano,2006),oneimportantcomponentinafirm’sinnovativecapabilityisitsabilitytomobilizeandexpanditshumanresources(seee.g.Guan&Ma,2003).Morespecif-ically, HRM is an important function to enhance capabilities among employees andmanystudies(e.g.Atuahene-Gima,1996)indicateastrongsignificantassociationbetweensupportforinnovationfromHRMandinnovationperformance.

DrawingonHuselid(1995),itisarguedherethattwocomponentsareofimportancetomo-bilizethehumanresourcesofafirm.First,theemployeesneedanappropriatesetofskills,andsecondtheyneedmotivationtoinnovate.Whenitcomestotheformerwedifferentiatebetween cognitive and behavioural skills (behavioural orientations). In the following theconceptsofandmotivationandskillswillbefurtherdeveloped.


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Motivation/engagementforinnovation

Motivation isdefinedasastateofneedoraconditionthatpropelsan individualtotakeacertainactivitiesthatbringsatisfaction.Theliteratureonhumanmotivationsdifferentiatesbetweenmotivationsthatareintrinsic(theactivityisvaluedforitsownsake)andthosethatareextrinsic(providingindirectrewardsfordoingthetaskathand)(Ryan&Deci,2000).

PreviousstudiesindicatethatHRMcanaffectintrinsicaswellasextrinsicmotivationindif-ferentways.Rewardsandpromotionareobviousmethodstoachieveextrinsicmotivation.Intrinsic motivation is harder to grasp, but include self-fulfillment and challenging worktasks.Huselid(1995,p.638)concludedbasedonBailey(1993)that“ahighlyskilledandmo-tivatedworkforcewillbelimitedif jobsarestructured,orprogrammed,insuchawaythatemployees,whopresumablyknowtheirworkbetterthananyoneelse,donothavetheop-portunitytousetheirskillsandabilitiestodesignnewandbetterwaysofperformingtheirroles.”ThereforeHRMcanalsoinfluenceinnovativecapabilitythroughprovisionoforgani-zational structures that encourage participation among employees and allow them to im-provehowtheirjobsareperformed.

It is important to note that the presence ofmotivation does not guarantee performanceamong employees. Its absence, however, guarantees long-term performance problems(Manners,StegerandZimmerer,1983).Thisaccentuatestheimportanceofconsidermotiva-tionalissueswhenbuildinginnovationcapability.

From a HRM perspective, motivation is an issue to consider in connection to staff-ing/recruiting,employeetraining,aswellascareerplanning.Whenrecruitingpersonnelthatfitwiththe innovationstrategyof the firm, firmsshouldsearch for individualswithanap-propriatemotivational profile. It also follows that jobs need to be designed as to containelements of challenge, achievement, and conveying the feeling that work has meaning(Badawy,1978).

Cognitiveandbehaviourskillsforinnovation

InthisstudyweuseataxonomydevelopedbyBirkett(1993),distinguishingbetweencogni-tiveskillsandbehavioralskills.Onereasonforourinterestinthesetwotypesofskillsistheyhavebeendiscussedasgenerallyimportantfactorswithapositiveeffectoninnovationper-formance(e.g.CorsoandPavesi,2000;Darroch,2005).

Cognitiveskills

According to Birkett cognitive skills include technical skills (the application of technicalknowledge with some expertise; analytical/constructive skills), problem identification andthedevelopmentofsolutions,andappreciativeskills(evaluatingcomplicatedsituationsandmaking creative and complex judgments). Cognitive skills that are technical in nature aredefinedastheunderstandingof,orproficiencyin,specificactivitiesthatrequiretheuseofspecialized tools, methods, processes, procedures, techniques, or knowledge (Peterson &VanFleet,2004).

Cognitiveskillscanbeassessedwithtraditionaltools,suchasCVsspecifyingeducationandexperience,andbedevelopedwitheducation, traineeschedules,or trainingschemes. Inarecruitmentsituationthesearethe lessproblematictomapandassess. Inastaffdevelop-ment situation it isalsoquiteassessablehowto identifygapsbetweenavailablecognitive


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skillsandstrategicneeds,andtheneedforcomplementingtheseskillswitheducationandtraining.

Behavioralskills

Behavioral skills includepersonal skills (howonerespondsandhandlesvarioussituations),interpersonal skills (securing outcomes through interpersonal relationships), and organiza-tionalskills(securingoutcomesthroughorganizationalnetworks).Behavioralskillsarebuiltupfrompersonalcharacteristicssuchasprinciples,attitudes,valuesandmotives,whichareafunctionofanindividual'spersonality(Hodges&Burchell,2003).

Withinresearchoninnovationandentrepreneurship,entrepreneurialorientationhasbeenidentifiedasafactorofgreatimportancetoimproveinnovativecapabilityandtherebyinno-vationperformance (e.g.Atuahene-Gima1996,Atuahene-GimaandKo,2001; Jantunenetal,2005).Wewillthereforepayspecialattentiontothebehaviouralskillofentrepreneurialorientation.

Priortheoryandresearchmakeadistinctionbetweentheconceptsofentrepreneurshipand"entrepreneurialorientation”(LumpkinandDess,1996).Entrepreneurshipreferstotheactofcreatingnewbusinessventures(e.g.Gartner,1988).Entrepreneurialorientationreferstoanindividual’sorafirm’sstrategicorientation,confiningspecificentrepreneurialaspectsofdecisionmakingstyles,practices,andmethods(LumpkinandDess,1996).1EOisunderstoodashavingthreedistinctdimensions.

Innovativenessisthefirstdimensionreflectingthetendency“toengageinandsupportnewideas, novelty, experimentation, and creative processes thatmay result in new products,services,ortechnologicalprocesses”(LumpkinandDess,1996,p.142).Theseconddimen-sion,risktaking,isdefinedas“thedegreetowhichmanagersarewillingtomakelargeandrisky resource commitments” (Miller andFriesen,1978,p. 923).Amodelof riskbehavior,developedbySitkinandPablo(1992),distinguishesbetweenriskperception,riskpreference,andriskpropensity.Riskperceptionreferstothewayanindividualorfirmperceivesarisk,andriskpreferencereferstothegeneralpropensityofpeopleorfirmstoacceptrisk,whilerisk propensity refers to the likelihoodof a person behaving in a riskyway.Proactivenessreferstoprocessesaimedatanticipatingandactingonfutureneedsby“seekingnewoppor-tunitieswhichmayormaynotberelatedtothepresentlineofoperations”(Venkatraman,1989,p.949).Thisisanactofopportunityseeking,whichwhenadoptedonthelevelofthefirmisunderstoodaswhenaproactivefirmtriestogetholdofinitiativebyactingopportun-isticallyinordertoinfluenceandshapetheenvironment(LumpkinandBess,1996).

MethodologyAcasestudyapproachwasusedmainlybasedonthreesourcesofinformation;participativeresearch, interviewsand theHRhandbookavailableat the intranet.Participative researchmeansthattheauthorswereactiveasadiscussionpartnersfortheR&DDirectorduringthe

1Theconceptdrawsonaresourcebasedviewofthefirm,suggestingthat,differentcapabilities(suchasmar-ket orientation, innovativeness, and organizational learning) contribute to a firm’s competitiveness and per-formance.


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formulationoftheinnovationstrategy.Theinterviewswereconductedduringatwomonthperiodinthreeproductionunitswithinonebusinessunit.Approximately30interviewswereconducted intotal.Forthisspecificpaper interviewswithtworespondents (HR-directoratBU-levelandonesitemanager)areused.TheHR-handbookispublishedontheintranetandincludesprocessesandroutinesforanumberofHR-practices.

Casedescription

The company has between 10-20,000 employees and belong tomedium-high technologyindustry.Productionssitesandsalesofficesarepresentinmorethan30countriesatallthecontinents.Thecompanyhas threebusinessunits thatarehighly separated inoperations.Themostprominentreportsystemisgrowthandprofit,whicharetargetedinbudgetsfromcooperation’s level. The process of formulating and implementing a new overall businessstrategyandsub-strategiesinthisbusinessunitstartedearlyin2011.Themainpurposewastopresentnewstrategies fortheforthcomingfiveyearstoreplacethestrategiesthathadbeenguidingsince2007.

AnalysisanddiscussionThebusinessunithasrecently launchedanewstrategythatshallbeguidingfortheforth-comingfiveyears.Besideanoverallbusinessstrategy,sevensub-strategieswere launchedincludingan innovation strategy (butnotaHRstrategy).During the strategydevelopmentoneresponsibleforeachstrategyhaveworkedwiththedocumentandafewpresentationshavebeenmadeforthegroupofresponsible.HoweverHRhasnotbeeninvolvedatallandverylittlecoordinationbetweenthedevelopmentsofeachstrategyhasbeenidentified.Theinnovationstrategydoes indeedcontainthreeareas;process,peopleandculture,butonlytheprocessisfurtherelaboratedinthestrategy.Theareasofpeopleandculturearehandedoverwithoutinstructionsto“managersandHRateachsite”.Theawarenessofpeopleandculturedo,however,signalaconnectiontoHR.

Oncorporate level theHR-directorhasdeveloped theHR-handbook in somecollaborationwithHR-directorsatBU-level.TheHR-handbookcontainsanumberofprocessesincludingaworkprocess, some suggestedpractices/tools, and situationswhen theprocesses shall beused.Fourprocessesaremandatory(Recruitment,Highpotential identification,Successionplanning,andPerformanceassessment).Apartfromthesemandatoryprocesses,thereareafewmoreprocessesmeantassupport.Oneobservationthatbecomeclear instudyingtheHR-handbook,andalsoappeared inthe interviews, isthattheseprocessesaresuitableforthe(innovation)strategyimplementation,butlessusefulinthestrategyformulationphase.Therearenoprocesses (mandatoryorsupport) that includeassessment (mapping)ofpre-sent human resources or identification of human resource gaps (needs). In interviews re-spondentsfromHRarenotsurprisedastheroleofHRasbeingastrategyformulationsup-porthasnotbeeninfocusonBU-levelandbelow.

Itisalsointerestingtonoticethattheformulationoftheinnovationstrategyhasbeenmaderather disconnected from the formulation of the business strategy and the other sub-strategies. Probably this is valid also for the formulation of the other sub-strategies (thatthey are formulated rather disconnected), butwe have no data to explicitly support this.Thereforewe can identify two types of disconnection between formulation of innovation


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strategyandotherstrategies;a)thedisconnectionfromothersub-strategies,andb)thedis-connectionfromtheHR-function.

Conclusions,ImplicationsandoutlookAs indicated inouranalysisshowsthreemain findings.First,HRprocessesaspresented intheHRhandbookdonotoffersupport for innovationstrategy formulation.Twoprocesses(high potential identification and performance assessment) do offer some relevant infor-mation, but only dealwith topmanagement. Processes for a broadermapping of humancapitaltosupportstrategyformulationactivitiesarenotdeveloped. It isalsoobviousfromthecasethatHRcompetenceisnotusedpro-activelyintheactualworkwiththeinnovationstrategyformulation.Second,HRprocessesaspresentedintheHRhandbooksupportsinno-vation strategy implementation in that themandatoryprocesses, ifusing relevant criteria,cansupporttheformulatedinnovationstrategy.It ishoweverimportantthatamappingofhumancapitalgapbetweendesiredandpresentsituationismade.Themappingwillsupportthedevelopmentofrelevantcriteria.ThesemappingtoolsarepresentlynotintheHRhand-book.Third,possibleasaresultofthefirst,theHRperspectiveisveryweakintheinnovationstrategyformulated.Theareasof“people”and“culture”appear,butarevaguelydelegatedto“HRandoperativemanagers”withoutanyguidancefromthestrategy.

Based on these conclusionswewill give some normative suggestions to companies, R&DexecutivesandHRexecutives.Furtherwewilloutlinesomesuggestionsforfutureresearch.

Implicationsformanagers

Atacorporatelevelourresultsindicateaneedtodevelopthecollaborationbetweendiffer-entfunctionsandtheuseofspecialistcompetencefromthedifferentfunctionswhenformu-latingstrategies.Therearetwomainreasonsforthis.First,thereisanobviousadvantageofusing all relevant expertise available in the companywhen developing strategies. Second,thesub-strategieswillbemorealignedwheninvolvingdifferentfunctionsratherthangivingeachstrategyformulationasatasktoseparatefunctions.Thisshouldbedonebycontrollingthe strategy formulation process in a way that enforces or stimulates concurrence andcompromiseduringtheprocesswiththepurposeofalignment.

Wewould,however,notsuggestthatonesub-strategyisanHR-strategy,butratherthatHRisinvolvedintheothersub-strategiesandthateachsub-strategyhasaHR-alignment.ThisisduetothefactthatHRmaybedifferentin,forexample,productionstrategyandinnovationstrategy.

ImplicationsforR&Dmanagers

WhenformulatingtheinnovationstrategyitisimportanttoinvolveHRashumanresourcesarespecificallyimportantinthesub-strategyinnovationstrategy.EspeciallyfromanHRper-spective it is important togetanappropriatemappingof thehuman resourcespresent inthecompany.Thepresenthumanresourcesfromthemappingwillformoneinputthefor-mulationoftheinnovationstrategythatshouldbecombinedwithexternaltechnologyandmarketsituationaswellasothertypesofinternalassets(laboratories,patents,etc.).

Further,R&DmanagersshoulduseHRthatcancontributetotheformulationoftheinnova-tion strategywith expertise about availability of certain key competences needed for the


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innovationstrategy.HRcancontributewithreportsonif,whereandhowkeycompetencescan be foundwhether it is on the labourmarket, from certain universities, in competingcompaniesorwithinthecompany.

WhenimplementingthestrategyR&DmanagersarerecommendedtousethecompetencefromHRparticularlyintwoways.First,HRcanidentifygapsinhumanresourcesbetweenthecurrentsituationandthesituationdesiredinordertofulfiltheinnovationstrategy.ThisisasecondtypeofmappingwhereHRshouldpossessavaluablecompetence.Second,HRwillbeanimportantoperationalfunctionthatcanrecruit,trainandpromoteinternallyinordertofillthegapidentified.R&DmanagersshouldworkwiththeseprocessestogetherwithHR,asitisalsoimportantthatanR&Dmanagercansupportthedevelopmentofrele-vantcriteriatosearchandselecttherighthumanresources.

ImplicationsforHRmanagers

An important finding,which is also supported inprevious research, is thatHR isnot suffi-cientlyinvolvedinthestrategyformulationprocess.HRshoulddevelopusefulprocessesandtoolstobeabletosupplyR&Dmanagerswitharelevantmappingofhumanresourcesasaninputtotheinnovationstrategyformulationprocess.OnereasonthatHRisnotinvolvedisprobablythatitcannotpresentlycontributewiththetypeofinformationneeded.Inordertobe a useful player in the strategy formulationHR should assesswhich competences, pro-cessesandtoolsneedtobedeveloped.

ItisalsoimportantthatHRhasacompetencetothinkstrategically,ratherthatprimarilybe-ingofadministrativenature.TheassessmentofHRanddevelopmentofHRcompetenceisastrategicissueforseniormanagementandHRatacooperatelevel.

Whenimplementingtheinnovationstrategy,HRcancontributeintwoways.First,bymap-pingthegapsinhumanresourcesbetweenthecurrentsituationandthesituationdesired.AlsointhisphaseHRshoulddevelopprocessesandtoolthatcontributetotheneeds.Inthisphase it canbenoted that such tools shouldassesscognitiveaswellasbehavioural skills.Especiallyregardingtheinnovationstrategyitcanbeassumedthatbehaviouralskillswillbeofimportance.Ifadatabaseofemployeescanbecross-referencedwithadesiredsituationthatwillcontributearoad-mapforhowthegapsinhumanresourcescanbefilled.

Second, HR will be of greatest importance in the implementation with its processes andcompetence in recruitment, identifying high potentials, succession planning, training anddevelopmentandperformanceassessment. ItshouldbenotedthattheclosecollaborationbetweenHRandR&Din identifyingcriteriaforsearchandselectionofcomplementaryhu-manresourcesareveryimportant.

Suggestionsforfutureresearch

Tools tomapcurrentHRsituationareneeded,especiallywhen itcomestohowtohandlethebalancebetweencognitiveandbehaviouralskills.

Wewouldalsoliketoemphasisethatmotivationisavariablethatneedsmoreattention,asskillswillnotproduceimprovementifmotivationislacking.OneinterestingquestionisifHRshallfocusoncreatingmotivationwith,forexamplecompensationandrewardsystems,oronidentifyingindividualswithintrinsicmotivation.Intheareaofidentifyingintrinsicmotiva-tionwehavenotfoundmuchresearch,whichpracticallydevelopsassessmentmethodsandtools.


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