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Home » Leadership

HR IS business strategy

Submitted by on Wednesday, 16 January 2013No Comment

As a function, HR is routinely criticised for ‘not being strategic’. And in most cases these criticisms are warranted. So we thought a post showing how HR strategy IS business strategy would help those confused at how to link the two! First we need to understand…

What is strategic?

What is ‘strategic’ is simply what adds value to the business. Therefore the following are not strategic:

  • Complexity (or adding ‘work’ for its own sake). Complexity is NOT by itself value.
  • Fixing problems without knowing why they are there. Fixing problems is NOT adding value if the root of the problems are a strategic or structural flaw.
  • Implementing the latest fad. This is NOT necessarily strategic. Let me give you an example. If everyone tells you that ‘you must implement a balanced scorecard because it will help us execute our strategy’ – but you know that no-one below senior management will understand it, and that it will take 5 or 6 training days in the hope they will do so, then how can that possibly add value?

‘What prevents a work from being completed becomes the work itself.’

Marcus Aurelius

 

All too often, HR gets lost in the three flawed practices above and, perhaps worse, is trained to do so by many of the world’s business schools.

So here is a business approach to HR, one that says that…

HR IS business strategy

HR can add value by understanding:

· what challenges the business is facing now (at root) and

· what challenges the business will be facing tomorrow

and then putting in place measures to meet and overcome those challenges. Please see the image below (or pdf attached here) as an example.

 

HR is business strategy

 

1. Red lines. These are targets or goals. As HR, you need first to make a situation analysis and then boil this down into numbers – or metrics. If the metrics you have chosen are based on reality, you can then communicate them to your colleagues. These metrics need to link people’s actions and behaviours to corporate goals and outcomes.

2. Vertical pillars. These are the key pillars of the company strategy. If we can make them increase in altitude, then the company’s bottom line performance drivers – profit margin, market share growth, sales growth – will increase. To increase the altitude of these pillars as HR, you need to:

· Know how to reinforce or change the behaviours connected to the red lines above.

· Create a realistic plan with steps to enable your colleagues to do so (have a look at our strategic thinking framework here)

· Keep following up and updating the progress made

…not difficult then – when you make it easy!

3. Gaps. Closing the gaps between the tops of the vertical pillars and the red lines is how HR adds value. It needs to make sure the initiatives it implements are at all times simple, specific and strategic.

HR – don’t do this and…

HR is not strategic for three main reasons:

1. HR is taught and practices complexity. It is taught complexity by business schools that include in the central planks of their syllabi theories that have been disproven by science! It practices complexity due to the advice of many consultants who get paid more when everything is more complex. Don’t fall for it!

2. HR does not localise and individualise its initiatives. It seems to think all humans are the same in all territories, yet marketing treats people as different. Wake up management  – which one is it – are people all the same or are they all different? If they’re all the same, stop local marketing. If they’re all different, stop generic HR. So which one is it, do you think?

3. HR does not link its initiatives to numbers. ‘If you can’t measure, you can’t manage’. Instead it appeals all too often to vague lines of reasoning that make little or no sense.

…instead do this

Instead, make sure everything you do as HR is:

simple,

specific, and

strategic

We explain this more fully here.

If you would like to make your HR strategic this year…

…simply call us during office hours on +662 6393550. Or fire through an email using our contact form here!

 

Talent Technologies. Producing Change.

 

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