Strategic hierarchies of HR tasks and functions
By Brian Kreissl
I find it interesting how many people are still talking about the need to make HR more strategic — as if it is a fairly new concept. The idea is the people strategy of an organization should be aligned closely with the overall corporate strategy and the company’s vision, mission and values.
The truth is I remember reading references to studies done in the 1960s and 70s saying HR needed to become more strategic in order to gain credibility and add more value. It struck me as interesting even 20 years ago that strategic HR wasn’t an entirely new concept.
Nevertheless, I think the HR function and senior HR practitioners have made big strides over the past 40 or 50 years in terms of finding and keeping the proverbial “seat at the table” alongside an organization’s most senior leaders. The emerging cliché nowadays is becoming: “Now that we’ve got that seat at the table, what are we actually going to do with it?”
By and large, CEOs understand the importance of people issues to organizations. They understand how HR can add value, and generally see the benefits of having a highly qualified and experienced CHRO or equivalent to rely on for advice, coaching and input not only for themselves, but also for the entire C-suite.
In organizations that truly view HR strategically and think of the human resources function as a trusted business partner, advisor, confidant and custodian of the organization’s people agenda, the CHRO generally reports directly to the CEO. That person has the resources and discretion she needs to deliver the programs that attract, onboard, retain, motivate, engage, train, develop, incent, empower, deploy and manage employees.
HR is there to ensure the right human resources are in place to achieve organizational goals and objectives and drive the change necessary to take the organization where it needs to go from a strategic perspective. Because of that, it is vitally important to have an HR strategy that meshes with the organization’s overall strategy.
What is organizational strategy?
While there are many different ideas of what actually constitutes business strategy, we generally know and understand that strategy relates to the “bigger picture” and the longer term. Strategic concerns relate to organizational decisions at the highest levels and generally consider longer time horizons (although the ever-increasing pace of change and the technological disruption of many industries and functions make developing something like a five year strategic plan much more difficult these days).
Some of the most strategic concerns in business relate to the markets an organization serves, the products and services it offers to customers or clients, its basic business model, pricing, distribution, sales channels and its vision, mission and values. While people at the very top of the organization (the C-suite and the board of directors, if applicable) generally set strategy and develop strategic plans, tactical implementation of those plans is usually left to people one or two rungs down on the organizational ladder.
I find it strange how most of the business world views tasks that aren’t strategic as “tactical,” whereas HR practitioners tend to use the term “transactional” to refer to non-strategic work. The term “tactical” is probably less disdainful than “transactional” (at least in the context HR practitioners use it because it has entirely different connotations in the legal community where it refers to things like mergers, acquisitions, initial public offerings (IPOs) and the issuance of shares and other securities).
Tactical implementation of strategy
Tactical implementation refers to the idea that even those who aren’t necessarily developing strategy are often doing work of strategic importance to the organization. I personally believe HR practitioners should be mindful of this when determining whether something counts as “strategic” or not.
Some things are more strategic than others, and I believe HR strategy is a continuum rather than a dichotomy of purely strategic activities versus purely transactional. Many HR initiatives, tasks and programs fall somewhere in the middle.
At the most strategic levels, senior HR practitioners are actually helping to craft overall corporate strategy and have meaningful input into the strategic direction of the organization. Slightly below that is the work of creating HR strategy and ensuring it is aligned to the organization’s corporate strategy.
However, even work like organizational design and development, talent management, learning and development and employee relations can have a strategic component to it at times.