How Komatsu combines HR & strategy to drive results

Komatsu Australia's MD & CEO, and general manager people & strategy, Colin Shaw say HR and strategy combine well together in driving business results

HR and strategy go well together from a functional perspective and can play a key role in improving innovation, driving business alignment and delivering customer engagement, according to Komatsu Australia’s MD & CEO, Sean Taylor.

The value of the HR and strategy function in Komatsu Australia goes much deeper than traditional responsibilities such as compliance, remuneration, training and recruiting, he said.

In formulating the business’ approach to people management, customer service and business strategy, Taylor said Komatsu is more in line with a professional services business than a product, engineering or sales business.

“Professional services businesses are people-based businesses,” he said.

“We get great product supplied by our factories, but at the end of the day it’s how our people relate and have those discussions with customers about the brand.

“That’s why I wanted to form a people and strategy group, rather than a traditional HR department, because people management is central to strategy formulation, especially when you’re in a professional services business.

“So how do our people reflect the brand? How we recruit, train and manage the careers of these people is absolutely central to what we’re doing from a business point of view. That’s the way I’ve always viewed it,” says Taylor.

“In other companies the CFO and the head of HR are sometimes at loggerheads”

Komatsu – one of the largest suppliers in both the world and Australia’s the earthmoving, mining, construction and utility equipment market – has combined the functions of HR and strategy locally, and its general manager of people and strategy, Colin Shaw, works closely with both Taylor and the company’s CFO (Mark Wilson) in formulating and executing strategy.

“In other companies the CFO and the head of HR are sometimes at loggerheads,” he said.

“So having that ability to be astute in a commercial context makes decisions easier, because we talk about the P&L implications of these decisions, rather than ‘I want to do this learning program and it’s going to cost this much.’

“We focus on measuring the impact. I think that’s important,” said Shaw.

HR also takes a cross-functional view in the business, according to Shaw, who explained that this assists in spotting broader commercial opportunities.

“We need to understand where HR can add value in sales opportunities in line with strategy, for example,” he said.

“If we can’t see this from a sales context, we’re just making up the numbers in my view. “We’re developing our RTO capability in our training business [Shaw also serves as CEO of Komatsu Training RTO, which is the only RTO for heavy vehicle electrical in Australia] so it can add value to the customers’ front-end sales, but this can also be used as a tool to seek leads for new equipment sales via the training process.

“We get a lot of intel in training programs, so our trainers will feed intel into our sales team to contact a customer and sell a bit of new gear,” he said.

“We talk about the P&L implications of these decisions, rather than ‘I want to do this learning program and it’s going to cost this much.’”

Shaw said the journey of taking on responsibility for both people and strategy (in addition to HSE, corporate planning and marketing for Australia, NZ and New Caledonia) has been “an interesting one”, and the first challenge was selling it to the business.

“I think it was just a case of letting it morph into itself so people could see how it all came together,” said Shaw, who explains that the turning point in this was the launch of a branding strategy which focused on “people-powered technology”.

“We had reiterated the importance of strategy, people and relationships with customers to our people a number of times.

“But when we rolled this branding strategy out across the country at the end of last year, this is when a lot of people understood how brand, strategy, people, technology, machines and the customer all fit and come together in the business.

“Last year was a real rugged one and some projects were draining on the business, so this branding strategy has been a very positive one in giving people a vision and something to grab hold of, and helping them understand how they can contribute to and be part of the bigger picture,” said Shaw, who adds that the response has been very positive and an internal survey found 91 per cent of people are proud to work for the Komatsu brand.

For the full interview with Taylor and Shaw and story on how they work together to drive results in a challenging market, see the next edition of Inside HR magazine. Image: Hayden Brotchie