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Maximizing HR Contributions To Company Success
By Paul Kirincich and Paul Minton
If a member of the Board of Directors of your company asks the CEO what contributions Human Resources makes directly to the long-term success of the business, what would the CEO say?
of what he/she would say, the reality can be several different things:
all cases, what will your department need to look like tomorrow, and does it
resemble that today?
statement applies to your HR department?
scenarios described prevail in the best business environments. As a
result of the weakness and uncertainty in today’s economy, the ground is
soft and shifting. Even best in class HR departments may find their
activities falling out of alignment with corporate goals. The solution
in all cases is to:
As a result, HR will become a more
strategic contributor, and make recognizable contributions to overcoming
competition. How is this accomplished? Through a simple internal
strategic planning process at the departmental level that borrows techniques
from corporate strategic planning.
What Strategic Planning Will Do For HR
reexamine the scenarios we described above.
Basic Service Organization
If HR is a basic service
organization within your company, is that all it needs to be? If that
is the case, strategic planning can make it a more lean and efficient
organization by focusing on activities valued most highly by internal
customers. However, if HR is not strategic, it’s probably not doing
all it can to advance the company’s prospects. Understanding
corporate goals and internal customers, HR can become strategic by
emphasizing activities that allow the business to be more competitive and
successful, and communicating its plan to executives and other internal
customers in terms that are consistent with the overall corporate plan.
HR perceives itself to be strategic but is not seen that way by its
customers, one of two conditions can prevail:
both cases, HR must understand its customers better. Either it does
not understand and as a result is not delivering the right mix and quality
of services, or it is not marketing its services properly. As do
corporations and marketing departments, HR must analyze their customers in a
systematic way and incorporate the analysis into changes to what they do.
All that is often required is crisp communication of HR’s role in the
company as expressed in the language of its core business.
More Than A Service Organization
Where HR is perceived as more than a
service organization but not as truly strategic, it’s likely that planning
efforts are going in the right direction but partially missing the mark.
This can happen in the best of times, but is more likely to occur during
today’s downturn when corporate priorities have changed, and budgets are
Planning is required to realign
activities and allocate reduced resources. A fresh look at customer
priorities that strategic planning brings is necessary.
Best in Class
HR departments that are best in
class usually get that way through a thoughtful understanding of corporate
strategies and well-planned activities. Unfortunately, a lot has
changed in the last 18 months and it is likely that corporate strategies
have changed. Has your HR department adapted beyond reducing its
budget? Given that fundamental changes have taken place at a corporate
level, HR has to reexamine its competitive position as well.
Most clients that we work with now
have gone through workforce reductions. Formerly very competent HR
departments struggle to adapt to the change in environment where the primary
concern before was keeping the organization fully staffed, and now are
reducing headcount and maintaining morale. In addition, HR is under
pressure to make cost saving changes by doing things like altering employee
benefits while maintaining morale. Taking a short break from
day-to-day responsibilities with your team to plan your activities will reap
The Process of Departmental Strategic Planning
How do you conduct a planning
process that minimizes the burden on your staff, while making the best use
of their knowledge and experience, and securing their strongest commitment
The answer is through a simple,
well-conceived process involving your managers with two to three days of
commitment to group activities, and “homework” that they take away and
can complete with the assistance of their staffs. While large HR
consultants will come in and promise to deliver results, the cost you bear
for their services goes well beyond their fees. They include the risks
that they don’t properly understand your business, and that your people
will not “buy-in” to their recommendations and thus fail to successfully
implement a new plan. The road behind big consulting firms is littered
with unexecuted strategies.
We recommend a simple process that
consists of team meetings that should yield a completed plan within 60 days.
The steps are:
Developing The Plan
Process Leadership Designation and Team Selection
To succeed with a planning process
similar to what follows, you have to designate leadership. The most
obvious choice is the head of HR. An alternative, which allows the
head of the group to participate more completely in the thinking needed the
go through the planning process, is to designate someone from outside to
lead the process. Two candidates are the overall head of the
company’s strategic planning effort, if such a person exists, or an
outsider who has familiarity with leading planning teams.
The team you choose should consist
of no more than four managers of the HR organizations and, if possible,
participation from the company’s head of strategic planning or some
equivalent who can represent the overall company strategy. Absent such
a person, the head of HR should represent the company’s point-of-view.
Building the right team requires
balancing inclusiveness and thus commitment to execution and adequate input,
with the risk of bureaucratizing the process. If you include too many
participants you will slow proceedings down to a point where participants
get frustrated, and work is not completed on a timely basis or at all.
No matter whom you choose to include, make sure they are:
I. Business Role Determination
The first planning activity requires
that the leader of HR determine answers to the following questions to set
the direction for the process:
If HR’s role is not
perceived as strategic, does HR seek to become strategic through this
process? The alternative is to maintain the current role as a service
organization but to become more lean and effective. Alternatively, if
HR is current seen as strategic, the objective is to perpetuate this role.
The outcome of role determination sets the course for the planning process.
II. Services Scope
What services do you provide?
The first step, which can be accomplished in a first team meeting, is to
list all the services you provide to the organization, either directly or
indirectly through third parties. Take that list and determine for
each item the extent to which they are:
After you have listed and rated each
service, you may find it useful to place them in a two axis matrix similar
to the one used above for examples.
III. Customer Profiling
Who are your internal customers?
Just as the business has to understand its customers, you must understand
yours. The first step is to categorize them so that they can be
Here, the classic concept of market
segmentation can be simplified and applied. The ideal outcome of this
exercise is a two-axis matrix that yields 4 to 8 truly unique customer
groups. We suggest the process of listing all the different ways that
your internal customers can be differentiated which can include the
After you have a list, test them
against each other in matrices until you identify one or two categories that
yield the best differentiation. What you are looking for are
identifiable groups of customers with different requirements. If with
such criteria you have segments that appear very similar or identical, you
can either collapse together the similar categories or choose other
Once you have identified your
categories, describe each in terms of the following characteristics:
In addition to defining each
category of internal customers, perform an evaluation of the quality and
importance of services. For each service, using short surveys and/or
How you perform this evaluation
depends on the creativity and resources within your organization. We
have developed and used email, web and paper forms to gather such
V. Strategy Formulation
Here you put to use, in what we
recommend be a second team session 3-4 weeks from the first session, all the
information and analysis done in the first 3 phases of the process. We
strongly recommend that the work done in those phases be circulated and
thoroughly digested by the team prior to the next planning session.
A series of steps should be employed
to determine what initiatives should underlie your strategies:
Define from these and other
questions that come up a series of initiatives to be evaluated which
Evaluations of initiatives may
require analysis of costs and benefits prior to making commitments.
VI. Budget and Action Plan Development
When new strategies and initiatives
are developed, define a goal and assign ownership to each new service or
initiative. Have the owner develop an action plan that spells out each
step in successful fulfillment of the goal associated with at least the
following information for each step:
A separate review of action plans is
essential to assure that your teams are aligned on what your overall plan
will entail. You may need to cycle back to the Strategies section and
reevaluate new projects in the event that unforeseen complications, effort
or investment requirements or other issues arise during the action plan
From the action plans develop a
budget for new activities and tabulate savings associated with outsourcing
and changes to existing services. You should find that you can do
more, and be more strategic, with the same investment that you were making
We have seen some of the best
strategic plans fail as a result inadequate implementation, and key to
successful implementation is proper monitoring of action plans. If
your HR department sees plan implementation as a high priority and knows it
will be held accountable, it will have the best chance of success.
We recommend monthly or quarterly
sessions at which members of your team review the progress of their action
plans, with reporting of status against date commitments. Delegate to
someone in your organization the task of keeping the “master plan” and
periodically updating it with a progress report. Meetings to review
action plans should be devoted to helping the action plan owners resolve
When you have completed the process
we have laid out, you should have a more efficient, better-focused HR
organization that understands its customer needs and thus is in better
alignment with corporate strategies. How you communicate the outcome
of your plan depends on the dynamics of your organization but we suggest
some means of informing them of what you are committing to do for them.
You should be able to communicate that you understand their priorities, and
what you are doing to meet those priorities.
Through our process HR will become a
more strategic contributor, and will chart a course that is viable in
troubled or still waters. While crisis and change make planning
imperative, HR is served in all environments by a planning process that
looks at what is done, what should be done and for whom on a regular basis.
As markets and businesses change today at rapid rates, priorities change.
HR must adapt to those changes to optimize their contribution to company
success. We suggest reopening your plan to new initiatives and
services on an annual basis.
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