Business Leaders Don’t See HR as Key to People Strategies - Is This Concerning?
Last week, Thomas Otter challenged many other noted bloggers to comment on a recent survey by Deliotte essentially stating that HR is irrelevant to corporate strategy. As the report notes…
“While 60 percent of senior business executives consider people issues to be a significant factor in corporate strategy, relatively few of them look to their human resources teams for help on those issues.”
Do I challenge the findings…No. In fact, this viewpoint is also validated in a recent study we conducted with IHRIM, set to be published next week, stating that less than 50% surveyed feel their CEOs thinks their organization has the skills necessary to perform at industry leading levels.
There are three key reasons for this…
- HR is unable to ”inventory” their talent. A majority of organizations are unable to define their workforce – what are the skills currently in the company and how can they be applied in other functional areas, are the talent “assets” returning value, and does individual performance meet or exceed business objectives. Just as R&D would not go into a product not understanding the business objectives (revenue targets, margin expectations, etc) neither should HR. The supply chain equivalent would be a lack of a product specification (job description), bill of materials (skills & competencies), quantity required (workforce planning), approved vendor list (succession plan) and supplier quality assurance (performance management).
- HR lacks a “business-aligned strategy”. In many cases, we see HR that lacks a strategy (and plan) that tightly aligns with the business strategy. For example, if the strategy of Home Depot is to sell more warranties on their home appliances than it probably would help for HR to define a talent strategy associated with that business strategy. This would include outlining a plan to find talent with an expertise in home appliances, train the staff how to upsell warranty packages, compensate them accordingly for a successful sale, etc.
- HR is unable to articulate their business plan (also known as a business case). In Jim Holincheck’s response, he talks about a CFO who was often ” …put in the position of shooting down the ideas of HR, not because they were not good or necessary, but because they did not have the proper substantiation (i.e. business case).” Too often the business case is how HR or the functional managers job will become easier instead of how HR and a technology purchase will impact the business’ top and bottom line. And it goes beyond a well-defined business case. Even the most rock-solid business cases don’t get funding because they lack a plan, governance model, execution strategy and alignment with long-term objectives and goals.
This is not all doomsday for HR, though. What are companies doing to address this issues? We are seeing many thought-leading organizations take a step back do something they have not done in a while (if at all)…define their talent strategy. As part of that strategy definition is breaking down of barriers between the HR functions or, more importantly, identifying areas of linkage between strategic HR processes (ie. recruitment-performance-succession). In addition, an even smaller subset of those organizations are beginning to embed themselves in the business. In a retail organization this could mean aligning with the front-line managers to make them more effective in the recruiting and retention strategy instead of just giving them a recruiting kiosk for applicants to apply.
Lastly, we are seeing an emphasis on internal talent management. Too often, companies put may too much emphasis on the talent they don’t have instead of focusing on the talent they have already and investing in development of that talent. This includes, for example, the alignment of performance, learning, succession and career development.
What is your talent strategy?
June 26th, 2007
5 Comments Add your own
1. Phil Fersht | June 26th, 2007 at 10:00 am
Brings back memories of that well-known Faast Company article article (not that I agree with it).
HR strategy has never been as important to the corporate health of firms as it stands today - particularly in terms of developing and retaining talent. The crux of the matter is whether HR departments are doing a good job driving the agenda here. The problem resides with the fact that HR departments are miles away from the core busienss of their companies in most cases, and are simply not best positioned to advise on proactive courses of action. This has led to HR fulfulling largely reactive and administrative duties for their firms - hence the rise of HRO. One solution could be to take senior corporate managers from areas of the core business (i.e. sales / product development) and have them more intimately involved in developing corporate HR strategy. This is one way of aligning HR closer to the core busienss. And if that fails, how about outsourcing the administrative HR functions, stripping out some cost, and re-inesting those savings on hiring and developing high-caliber HR staff to focus on strategic, and not tactical issues?
PF
2. HR Elevation: From Old Pe&hellip | July 3rd, 2007 at 12:32 pm
[…] Corsello of Knowledge Infusion offered three reasons in his Human Capitalist blog: HR was lacking talent inventory, strategies, and business case […]
3. Joanne Bintliff-Ritchie | July 18th, 2007 at 9:00 am
I think it is important to note that many studies indicate that human resources - or human capital or talent, take your pick of term - are critical to the execution of stratey and to sustained positive results. It is the HR department and practitioners that continually fail to meet expectations with regard to providing their organizations with strategic insight into how workforce performnce and the talent practices we design and manage can and do contribute to business results and company value. A major contributing factor not mentioned is the minimal business acumen in the vast majority of HR people. I am continually astounded at the number of HR people that I have met in 25 years as a practitioner and consultant who cannot articulate their organization’s strategy and value chain (how does it make money) and therefore cannot identify the key talent dependencies that relate to the strategy and business plan and communicate in business language - meaning numbers - the status and projected results related to those dependencies. We have to become quantitative analysts. We cannot address this issue until our ideas and actions, supported by our competency set and attitudes, reflect HR as a business discipline - not a human relations discipline.
4. b2b market research | July 26th, 2007 at 5:47 am
HR is not aligned with corporate strategy because they don’t work in tandem. and they don’t work together because HR is driven by cost where strategy is driven by customer and competitors along with greed of business manager.
5. Text to Speech(TTS)API | July 18th, 2009 at 7:01 am
I am continually astounded at the number of HR people that I have met in 25 years as a practitioner and consultant who cannot articulate their organization’s strategy and value chain (how does it make money)
htt://www.ispeech.org/api
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