HR Pulse

HR as a strategic business partner

Creating a comprehensive and compelling HR strategic plan, one that is geared to enable the achievement of business objectives, is vital to secure HR’s position as a strategic partner. HR’s credibility in the boardroom is undermined when the strategic plan fails to take cognisance of key business drivers.

Effective strategic planning allows HR to demonstrate its influence over the realisation of business objectives, allocate resources economically amongst HR services and make a convincing case for further investments in human capital.

However, we have  found HR struggles to obtain buy-in and serious commitment when it comes to their strategic plans and human capital related investments, precisely because it fails to create a compelling business case or communicate effectively with a wide group of stakeholders.

Another key challenge facing HR is that their strategic plans typically lose most of their decision-making value within ten months - requiring organisations to revisit their strategic plans at least once during the year. The Corporate Leadership Council has the following suggestions to help HR create effective and lasting strategic plans:

•     They have to understand the needs of the business and demonstrate how they can act as a strategic business partner
  
  
•     They have to ensure that strategic plans hold their value over time, creating a framework for monitoring the continued business relevance of their strategic plan, adapting them when the business conditions change
  
  
•     Obtain wider buy-in through the creation of audience-specific communications and business cases that link HR strategic plans and HR investments to the priorities of the business

In addition to the above three things, they also need to identify four essential components for HR strategic planning:

•     Top business priorities must be translated into talent ramifications
  
  
•     Initiatives within the HR function must be prioritised based on current capabilities and projected needs
  
  
•     Strategic plans must be communicated to partners in the business to secure leadership buy-in and investment
  
  
•     Plans must be allowed to evolve to reflect ongoing changes in business conditions

Measuring the success of a transformed HR agenda can be a daunting task, as you need to identify the right metrics to demonstrate the value HR is adding. In the place of merely tracking progress against objectives on an annual basis, you need to closely monitor your continuous progress against human capital and business outcomes, to ensure an ongoing relevant strategy.

Effective HR Business Partners understand, interpret, and act on key metrics. In response to this mandate, many organisations are beginning to gather metrics data into dashboards or reports for the purpose of driving functional, human capital, and corporate-wide business objectives. The Corporate Leadership Council suggests three strategic dashboards:

1.    Functional performance dashboard

• Ensure HR strategic alignment
  
  
• Provide performance baselines
  
  
• Link functional activity to profitability

2.    Human capital dashboard

• Building for application flexibility
  
  
• Enabling line-level business analysis
  
  
• Monitor leadership bench strength

• Calculating return on human capital investments

3.    Predictive strategy support dashboard

• Forecasting business results (predictive business outcomes)
  
  
• Accounting for changing business conditions (emerging drivers)
  
  
• Facilitating strategic business transitions

It goes without saying - strategy without execution is worthless; execution without a facilitating ambiance is doomed. Rachel Sklar of Change the Ratio recently pointed out that anyone who thinks that culture and strategy are distinct, is backing the wrong horse - culture is part of strategy. The best way to accelerate the pace of achieving strategic targets is to align culture and strategy so that they are in sync. If the culture is blocked up with unhealthy workplace practices and processes and the psychological desire and psychological capability of the workforce is unfavourable, attaining strategic objectives will be difficult.

It has always been difficult for HR and OD specialists to provide verified inputs regarding the readiness of the workforce and the workplace to act on strategic intent. To achieve an equitable and balanced work environment that promotes a facilitating ambiance for strategy execution, requires a rigorous and credible management approach that allows for:

• Evidence-based workforce and workplace practices

• Integrated risk management to understand and manage workforce and workplace risks

• Outcomes management to verify the impact of risks and interventions on employee and workplace functioning

 Impact analysis to corroborate the impact of risks and intervention programmes on the ability to act on strategic intent

The figure below depicts the process: