Secrets to The Most Compelling HR Strategy
Which comes first: Human Resource Strategy or Business Strategy?
We know intuitively that the Business Strategy must come first, yet how well do we in Human Resources truly understand the business strategy and its implications for our own HR Strategy when we must ensure that our business clients are equipped to plan and deliver our products and services to our customers?
Through observing many clients struggle to drive an effective and relevant HR strategy, we have learned a lot. Frequently, even the best HR leaders fall victim to believing they know the business strategy. It is easy to create a sophisticated sounding HR Strategy. For us, the red flag is when an HR strategy is ‘cookie cutter’ enough to be lifted and generically applied to any other organization.
To avoid this pitfall, ask yourself:
Does your HR strategy speak more to HR than to your specific company?
If you removed the logo, can it be applied to any other organization?
If the answer to either of these is true, your strategy is likely not deliberate or differentiated enough to be effective. Many HR leaders run hard and fast, dragging their teams along, thinking the HR strategy is aligned with the business simply because it reflects HR best practices. This is often not the case. We have listened intently to what business leaders expect of HR for the past several years, even when they don’t know what to ask for.
The themes from this feedback are consistent:
|Understand the Business Strategy||Provide a Workforce That is Right for the Business|
|Ensure the entire HR Function is proficient in understanding the overall business and the competitive business environment, so they can contribute to defining both the business strategy and the implications for attracting, retaining, and developing talent||Provide an HR Operating Model that combines workforce planning, talent management and development, cost alternatives (e.g. location of staff - - globally, with pros and cons), and HR risk management|
|Anticipate talent demands and demographic impacts based on a solid understanding of how leadership will execute its strategy. HR needs to anticipate and lead, not be asked to respond to the business needs|
|On Talent||Deliver HR Basics|
|Stop using the “war on talent” as an excuse and provide business solutions that do more than fill req’s and move people around||Improve the value of HR through effective business needs assessments, global views, social media, analytics, digital business, organizational development, sourcing and partnership management, and employee based customer service|
|Provide a clear talent plan to develop great (not just competent) leaders, managers who deliver on operational goals and customer experience (not just manage operations), and employees who understand how their role fits into their longer-term career path||Administer HR transactions at a low cost and with high risk management and assurance of confidentiality|
|Leverage technology to provide predictive people analytics, making it easier for the business and functions to attract, assemble, and build talent to proactively meet strategic demands|
Can HR Strategy really be this simple?
Today the Human Resources profession is at a new inflection point and must understand how to lead through this change or risk being deemed irrelevant.
Building an HR Strategy To Break Out of The Box
Too many HR organizations are trapped in delivering Human Resources operations excellence. As a result, there is a trend by business leaders to want to split HR. Let HR do the transactions; let the business take care of talent. This risks the relevance of the function and profession and causes a missed opportunity to align the people strategy to drive exponential business results.
The Secret to Great HR Strategy
Today, instead of devouring the business strategy, we have learned to step back and ask:
- What does the business need HR to be able to do to execute the organization’s strategy (HR Capabilities)?
- What shifts are occurring or emerging in the business that that HR needs to be ahead of to be proactive?
- Is the HR operating model delivering the capabilities the business needs?
- Is HR structured optimally to meet the needs of the business?
- Who is identifying key business capabilities? Leading this conversation is a great way to stand out as a strategic partner.
In working with HR Leadership, we follow the lead of Michael Porter and recognize that “The essence of strategy is choosing what not to do”. HR needs to determine our functions strategic capabilities (what do we need to be able to do), understand the gap with regards to delivering on the business strategy, and organize HR around the capabilities that contribute to business differentiation. That may means letting someone else manage payroll, outsource employee attendance, create workforce strategy, execute a dynamic plan, and develop people (not just move them around).
At LeaderShift Insights®, we work at the cross-roads of HR and business strategy to unleash the potential of Human Resources and proactively optimize the delivery of business objectives. Want to increase HR’s relevance in your organization? Call us. It’s what we do.