What is Human Resources Strategy Anyway?

I believe that the strategy of Human Resources can be summarized in one succinct sentence: Strategic HR means helping the organization achieve its desired results through its people.

There are two major themes in this sentence: Results and people. Let’s examine both.

Results

A reader of one of my other posts, "A Human Resources Career is Not for 'Nice' People" sent me a note to comment on how he disagreed with my statement that: “I find fulfillment in helping the organization achieve its objectives through human capital.” He felt that this statement was backwards – that fulfillment should come from organizations helping individuals, who in turn help deliver results. I don’t really disagree with his point, except that I don’t believe it contradicts mine. A focus on people is critical, without question. However, maintaining focus on achieving results is crucial as well. In reality these two concepts are symbiotic. We can easily say that without people there can be no results, but the opposite is also true: without sustained results there will eventually be no people. We must remember that we exist to help the organization be successful, not the other way around. The organization’s collective success leads to success and fulfillment of its people.

When a Human Resources function (as well as any other support function) fails to understand this point, my experience is that bureaucracy and frustration – for everybody – begin to take over. We look after our people, not just because that’s our primary role, but also because we understand that our organizations cannot be successful without our people. Yet, if we focus on people first and results second, we may have trouble doing the hard things that organizational success sometimes requires. If we focus on the organization first, while maintaining empathy for people, then we can help the organization achieve its objectives, while at the same time maintaining a positive environment.

To that end, developing and maintaining a business mindset is absolutely necessary for the strategic HR professional. We must not just understand the levers that drive the business, but we must also keep up with them in a credible way with other business leaders.

I remember in one of my previous companies inviting a well-known HR guru to speak to a group of about 40 senior HR leaders. He asked who knew what our Market Cap was on that day. Of the whole group, only one HR leader knew the answer – the one who had just transferred from Finance. It was an embarrassing revelation about our function – we didn’t keep track of one of the most basic KPI’s to our business leaders and the market place. It was a simple example that could have easily been extrapolated into other KPI’s. Since that experience, I have strived to know as much about the business as my Finance counterpart. Our roles and skill sets are different, but our comprehension of what drives the business should be the same if we are to maximize our ability to drive results.

People

Since all organizations are made up of people who actually do the work and deliver results, this provides a wide range of ways that an HR function can add value strategically.

Let’s start with basic HR administration. The normal, administrative, and expected activities of HR do not make us strategic partners. Certainly they are foundational blocks to being strategic, but none of them is an end to itself. They must all have a purpose. When we execute HR processes without clarity on the desired outcome for the business, we risk becoming the bureaucracy many people come to loathe. So we must step back and ask for each activity: “Why?” What is the desired outcome for the business? Does it help the business? If not, what should we be doing instead? The key is not to cease doing the administrative tasks, rather to do the right administrative tasks, in the right way that maximizes value to the organization.

There are many of these administrative tasks in any organization, including payroll, maintenance of personnel files, policy administration, performance management processes, etc. Delivering these well and consistently is necessary and valuable. But the delivery itself is not strategic. Decisions about how to best deliver those is what makes us strategic. Should payroll be done in house or outsourced? What system should be used? How can that system be mined for relevant data to help the organization? Is the performance management process working - meaning is it helping the business accomplish it’s strategic objectives? Are the organization’s policies relevant to creating a desired culture that helps achieve success? These are the types of questions that turn administrative work into strategic work.

Perhaps another way to think about how HR can be strategic is to first identify what is not strategic, along with its corollary. Here are a few examples:

Measuring turnover is not strategic; understanding costs, root causes, and finding meaningful solutions is.

Managing a rewards structure is not strategic; incentivizing to maximize organizational results is.

Designing and delivering training is not strategic; understanding and building the capabilities needed for success today and tomorrow are.

Executing an engagement survey is not strategic; analyzing engagement data and trends that help the business is.

Managing employee records is not strategic; analyzing employee data to identify meaningful trends is.

Hiring is not strategic; identifying the right capabilities and culture fit and finding a way to get people that match those into the organization is. Finding ways to keep people that are great culture fits, and moving those that aren't out is also strategic.

Party planning is not strategic; creating and/or maintaining a culture and environment where people are fully engaged is.

A talent management process is not strategic; what we do with the process is. Do we create honest and robust dialogue about talent within and between business units? And is the process helping the company deliver results – short-term or long-term?

In one of my companies we were doing a good job of identifying critical roles, but nothing was being done with the data. One day we asked the question of the leadership team: shouldn’t we strive to fill all of our critical roles with top talent or top performers? Then we overlaid the critical roles onto our talent grid. The result was that about 70% of the critical roles were filled with the type of talent that the leadership team thought could drive the best results. So we began to measure our progress, even linking it in a small way to the incentive plan. We got results. When we had vacancies in critical roles, leaders took extra effort to identify the best possible candidates for those jobs. And in some cases they proactively moved people to get the right people into the right roles. The percentage of top talent/top performers in critical roles improved, but more importantly the business results improved.

So I believe that nearly all HR activity has the ability to be administrative or strategic, depending on how we approach it. With this mind, I believe all HR professionals have the capability to be strategic, no matter at what level. It’s not a matter of “what” we are doing, rather “why” we are doing it. When we can clearly identify the “why”, then we can approach our function in a way that can truly influence the organization results. This, in turn, will create valued and trusted relationships with business leaders throughout, and the ability to lead and influence within the organization become a virtuous cycle.