Transcript HR’s contribution to business strategy

HR’s contribution to business
strategy
Understanding strategic
formulation
 Not always as per textbook:
■ intended strategies
■ emergent strategies
■ political strategies
 How does HR contribute:
■ operationalises business strategy
■ provides separate people thrust:
• connected with organisational aims
• disconnected: HR best practice model
■ is an integral part of business strategy
Types of linkage between
business & HR strategy
business strategy
informs HR actions
passing ships:
independent HR
and business
strategies
integrative
two way linkage:
mutual influence
Linking business & HR strategy
 Factors that affect this linkage:
 Planning process
■ formal or informal
■ deliberative or emergent
 Degree and timing of HR involvement
 Extent of challenge permitted
 Legitimate areas for HR input
 Extent of HR’s alignment with business -
broad objectives and current imperatives
Understanding the decision
making process
 If decided by
formal processes
 If matters are
settled beforehand
 If real action
happens at
operational level
 Get a seat at the
decision making
table
 Build coalitions,
work to influence
outside meetings
 Ensure you have
business partners
effective at BU
level
Stakeholder management
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board
executive committee
senior managers
line managers
team
leaders/supervisors
employees
employee
representatives
external suppliers
government bodies
other agencies
 what is their stake?
 what are their goals?
 what are their
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expectations?
how will change affect
them?
what do they know
already?
what influence do
they have?
what power do they
have?
Characteristics of strategic HR
 A philosophy underpinning people
management
 Seeing people as a competitive
resource
Making the case: what Human
Capital HR can deliver
 Improved utilisation of talent
 Higher productivity
 Reduced costs
 Better service delivery
 Organisational integration
 Aligned culture & organisational values
 Greater employee engagement
 Stronger employee proposition etc
Service-Profit-Chain Model
Line
Management
Company
Culture
Employee
Commitment
Customer
satisfaction
with service
Employee
Absence
Customer
spending
intention
Change in
sales
Characteristics of strategic HR
 A philosophy underpinning people
management
 Seeing people as a competitive
resource
 A planning approach to resources
■ numbers
■ skills
■ potential
in line with
business need
 Adds long-term rather than short
term value
Characteristics of strategic HR
 Integrated – brings together
multifaceted activities
People management
integration
vertical
business
strategy
integration
reward
employee
relations
training
& devt
work
orgn
culture
leadership
style
horizontal integration
Characteristics of strategic HR
 Integrated – brings together
multifaceted activities
 Comprehensive – covers the entire
operation (at BU or corporate level)
 High value added – focuses on business
critical issues
 Builds social capital – helps sharing,
networking and relationships
Characteristics of strategic HR
 Integrated – brings together
multifaceted activities
 Comprehensive –covers the entire
operation (at BU or corporate level)
 High value-added –focuses business
critical issues
 Builds social capital – helps knowledge
sharing, networking and relationships
 Anticipates change – through horizon
scanning and internal sensing
Connecting business & HR
strategies
Internal
drivers
Business
strategy
HR
strategy
External
drivers
Business
plans
Implementation
Monitor
How is people & business
alignment achieved
 What is the
organisation’s big
idea?
 What are the
business priorities?
 What are the
people priorities?
 How do they link?
Big
idea
Business
priorities
People
priorities
Establishing people priorities
What causes people to come to work,
be motivated and perform?
What stops them from
being effective?
A model of capability
Individual capability
Development
ability:
skills, training
education
motivation:
engagement
involvement
access:
resourcing
recruitment
succession
application:
OD
product
market
strategy
Organisational action
Deployment
What are external influences?
Conduct environmental scanning:
 what is the legal context
 how tight/loose is the labour market
 are the right skills available
 at what price
 what is the output from schools,
universities, etc
 what are the political priorities
What is the state of the
current workforce?
 What proportion is skilled for their current
and for future jobs?
 What is its demographic shape?
 How committed are employees?
■ attendance
■ productivity
■ staying or leaving
 What are collective relationships like?
 To what extent is employee potential being
harnessed?
What stops HR succeeding?
 Human capital not recognised as a
source of advantage
 Weak organisational leadership
 Poor teamworking across organisation
 Business strategy poorly defined
 There is little forward planning
 People resources assumed to be
unlimited, free or fully trained
 Resources are hoarded & not shared
HR’s own problem areas
 Obstacles to
success:
■
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■
■
■
time
capacity
focus
capability
positioning
■ organisation
The ‘default’ operating model
Corporate HR
centres
of expertise
BU
business partner
BU
business partner
shared
services
BU
business partner
consultancy
pool
BU
business partner
BU
business partner
HR’s own problem areas
 Obstacles to
success:
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■
time
capacity
focus
capability
positioning
organisation
 Relationships with
management not
working.
The villains:
■ HR – not letting go
■ the line – not
taking it up
■ senior mgt –
sending wrong
signals
Results
 Inadequate HR service performance
 Concentrating on low value tasks
 HR policies are disjoined & inconsistent
 They serve functional not organisational
needs
 Weak functional leadership
 Poor internal reputation
 Human capital not exploited, developed
What should HR do?
 Construct a workforce plan
 Establish the supply/demand balance
 Are the right people, in right jobs?
 Review your recruitment model
■ able to attract - all types?
■ brand
■ proposition
 Review your retention model
■ right level of wastage?
■ numbers, types, quality
Why do
they
join?
Why do
they
leave?
A strategic review of
recruitment and retention
H
Attract &
retain
Organisational
impact
Outsource
Commoditise
L
H
Market availability
L
Different propositions for
different groups
Hire
Exploit
Fire
Attract
Nurture
Retain
What should HR do? (2)
 Are you able to motivate staff?
■
■
■
■
How do
you
know?
degree of engagement
what motivates them?
what demotivates them?
what impact does pay and performance
management have?
 How well are employees aware of
■ the bigger picture?
■ their job?
■ what success looks like?
What should HR do? (3)
 How skilled are line managers in
■ Appraising performance?
■ Giving feedback?
■ Developing skills?
 How effectively are
■ Employees allocated to jobs?
■ How well are jobs/the organisation
structured?
■ Employees moved to meet business
needs?
What should HR do? (4)
 What is the organisation’s
■ Ability to change/innovate
 How good is the organisation’s
governance structure?
 How strong (and respected) are the
organisational values, eg
■ On diversity?
■ Whistleblowing?
■ Meritocratic progression?
Measure people and HR
functional performance
Through for example
 Critical success factors/areas
 Key performance indicators
 Service level reviews
 Customer surveys
 Employee attitude surveys
 Process mapping/activity analysis
 Audits/reviews (incl... quality)
 Scorecards
 Benchmarking
Improve measurement
HR
efficiency
People
management
efficiency
HR
effectiveness
People
Management
effectiveness
Examples of measures in multi
dimensional measurement
Customer views
Process metrics
Ratios
Cost/Income
against
headcount
Strategic alignment
Functional positioning
Human Capital
Human capital measuring & doing
business goals
HR policies
& practices
HCM
measuring
reporting
internal external
acting
managing
people
business
performance
… thank you