Your company is preparing its strategic plan for the next five-year period. Sitting around the boardroom table are the CEO, the heads of finance and IT and the HR executive who will align human resources policies with the new organizational strategy.
HR is there to ensure the organization has the skilled people capable of following through and the organizational structure necessary to marshal employee contributions.
HR involvement at the strategic level seems a logical outgrowth of the need to realize the competitive advantage people and their efforts can bring to bear in the marketplace. So why aren’t more companies doing this?
The encouraging news is that most boards and CEOs want HR to take on a strategic role in their organizations. Opportunities are there, but members of the profession are going to have to prepare themselves to accept the challenge.
Very few HR professionals are likely to find themselves in a position where they can act strategically. But that will change as the business need grows and the profession prepares itself for a strategic role.
HR professionals have been criticized for not understanding and using the language of business when discussing the value of HR programs. HR practitioners will have to learn to “talk-the-talk,” and present ideas and plans in language and style that is used in the executive suites.
HR managers must use strategy terms to show how their practices support organizational strategies.
Strategy, unfortunately, has become a buzzword and many people are confusing it with planning to the point where HR professionals may mistakenly think they are acting strategically when that is not the case.
For example, a company planning to enter a new market with new distribution channels may determine the need for a customer satisfaction rating of 9.5 out of 10 in order to secure its objectives.
The CEO asks HR to come up with a plan to achieve this. HR, typically, responds with forecasting and training initiatives. But what the CEO wants to hear is how to change knowledge, skills and attitudes in the workforce. Is it hiring practices? Is it training? What are the cost-benefits of the different approaches? How do they differ from competitors?
CEOs will become fatigued with proposals for HR programs that have no cost-benefit analysis. If you’ve decided using emotional intelligence tools is useful, be prepared to show how it works for your organization — unmeasured theories won’t impress.
Preparing oneself to be strategic will require HR professionals to assume responsibility for their own self-development. Too often, HR professionals find themselves isolated in small companies with little opportunity to network or connect with mentors. Fortunately, this is a knowledge-based profession and the information is out there. Practitioners should be reading books and subscribing to HR publications to absorb the knowledge they need.
Executives are demanding that the HR department move from articulating perceived value (“training builds employee skills”) to demonstrating real value (an external client can see the value.) As a game player on the corporate team, HR’s focus must be on scoring points, not just coaching, training or counting the number of players. HR value consists of aligning the HR tool kit to deliver the behaviours needed to enable strategy.
Monica Belcourt is a professor of human resources management at York University in Toronto and co-author of Strategic Human Resources Planning. She may be contacted at firstname.lastname@example.org.
Sounds like a case for strategic HR
How can strategic HR play a role in an organization’s success? Consider the following four cases where organizations could have benefited from strategic HR. These organizations adopted a strategy but had trouble with the HR management implications. In most cases, unless HR management strategy is appropriately formulated and skillfully implemented, the success of a chosen organizational strategy is at risk.
•IBM and Apple established a joint venture to develop an object-oriented operating system to compete with Microsoft. The social engineering challenge (to get two cultures working together) was greater than the technical engineering challenge.
•The six independent municipalities merged into one megacity called Toronto in 1998. After the fact, the city’s HR managers were left scrambling to come up with a way to merge the workforces — they’re still working on it.
•A survey revealed that 80 per cent of all managers thought that they would have to compete globally. Most had no idea of how to recruit, compensate, train and evaluate in an international environment.
•The federal government laid off 20,000 employees. The government found that too many employees accepted the severance package and had to rehire some to get work done. Some employees were rehired as consultants, doing the same work for double the pay.
Adapted from Strategic Human Resources Planning by M. Belcourt and K. McBey, published by ITP Nelson as part of their series on HRM.