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HR Strategy & Planning HR’s Business Partnership Priorities, Issue 59 Leadership development tops the list of HR’s priorities when it comes to partnering with the business, and this supports the top corporate priority of growth, according to information collected by professional services firm Resources Global Professionals through interviews with 51 HR leaders in global corporations. More than two-thirds of surveyed HR executives (67%) included leadership development as a top priority, followed by skills development/management (51%), employee recruitment (45%), employee retention (43%), organizational change (43%), employee motivation/engagement (41%) and culture change (41%). Resources Global Professionals notes that these HR priorities align well with stated corporate priorities such as growth (66%) and customer satisfaction (42%) but not so well with corporate priorities such as cost reduction (44%) and globalization (44%) (Resources Global Professionals, Human Capital Survey, 2008). Budget Increases Seen for Recruitment, Issue 59 HR executives project an increase in HR spending for employment and recruitment activities in 2008, according to a report by the Bureau of National Affairs (BNA). A BNA survey of 607 HR executives and managers nationwide found 44% anticipating higher budget allotments for recruitment; the same percentage said they planned to increase HR budgets for training and development. Increased budgets for employee compensation and benefits were planned by 54% and 52% of respondents, respectively. Poll participants revealed they also planned to up HR spends on strategic planning, health and safety, employee relations and employee services (Bureau of National Affairs, HR Department, 2008). Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 59Perceptions of HR’s Role Vary, Issue 58
Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 58 Study Confirms HR's Business Impact, Issue 42 Coaching, consolidating staffing requirements, and workforce planning are tops among the HR processes that "consistently drive highest business impact," according to a Bersin & Associates survey of more than 700 organizations, supplemented with 55 executive interviews. Bersin research began with a list of 62 processes related to an organization's talent and identified 22 of them that the firm dubbed the "Top 22." Founder Josh Bersin said the list represents "a priority list for HR executives and business leaders when it comes to developing and managing talent." A well-established coaching program came in at number one on the list of best practices, followed by an across-the-organization consolidation of staffing requirements. Third on the list was the identification of current and future talent gaps through workforce planning. The "Top 22" practices weighed heavily in the areas of performance management, competency management and sourcing/recruiting (Bersin, 2007). SHRM Research Shows HR Active in Strategic Change, Issue 42 Managing major changes is a challenge faced by 82% of surveyed HR professionals, and their roles include championing change, facilitating it, designing change or demonstrating it, according to the SHRM 2007 Change Management Survey Report. More than eight in 10 HR professionals said that the past two years had brought major organizational changes. These change initiatives included strategic changes, leadership changes, cultural changes, cost-cutting changes and process changes. A fourth-quarter research report on "Change Management" from SHRM suggests that HR's role in managing such change can take several forms. As a champion of change, HR's role is to provide visible support to leaders' efforts to introduce change. As a facilitator of change, HR's role is to provide insight about history, culture and internal dynamics to internal or external consultants. As a designer of change, HR's role is to redefine related HR programs, such as rewards and training, so that employees and managers better understand the implications of the new initiative. As a demonstrator of change, HR's role is to model transformation. To be effective in their change management roles, HR professionals must be able to build trust, collaborate and communicate well (Society for Human Resource Management, "Change Management," 2007). Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 42 Changes May Interfere with Execution of Strategy, Issue 41 Changes in a number of external factors can have an impact on an organization's ability to execute its strategy, according to Donald N. Sull, associate professor of management practice at the Strategies Must Be Built on Accurate Information, Issue 41 Business intelligence (BI) and workforce analytics can help "already-busy HR professionals spin their data into business gold," according to Sudhakar Pemmaraju, senior director of business intelligence at Convergys. An "abundance of data" alone is not useful unless it can be used "to deliver the insights that support strategic judgments," writes Pemmaraju in Employment Relations Today. BI includes all of the technologies and tools an organization uses to gather, access, analyze and share operational data, and HR data is "potentially the only company data that corporate decision makers cannot access without the value-add of HR's interpretation," Pemmaraju writes. HR data that can be gathered includes workforce analytics related to staffing (skills, characteristics, quality-of-hire and performance management), compensation (industry benchmarks and variances), benefits (participation and utilization rates) and training (connection to business results). Such data can be used to establish baselines, map trends and create/revise short- and long-term plans, Pemmaraju notes (Pemmaraju, 2007). Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 41 How to Tell If Your Strategy is Working, Issue 40 Top executive audits, or TEAs, are an important part of a cycle that brings strategic priorities to life, according to a 2007 article in Managerial Auditing Journal. The "FAIR" cycle begins with "focus," when the most vital strategic objectives are chosen, moves to "alignment," when the entire company aligns plans with these objectives, progresses to "integration," when strong management practices are applied, and finishes with "review," when top management assesses the effectiveness of the strategy cycle. The TEA is part of the review component and consists of an in-depth top-management-level analysis of how well the organization has managed its strategy processes over the year. This review may utilize such techniques as checklists, "walk-abouts" and roundtable discussions. Rather than being diagnostic or prescriptive in nature, the review is meant to "stimulate mutual discussion between senior management and people who implement top management goals." (Managerial Auditing Journal [Witcher, Chau and Harding], 2007, pp. 95-98) A Leader's Recipe for Strategy Development, Issue 40 Understanding an organization's "purpose" is a leader's first critical step toward developing strategy, according to Nikos Mourkogiannis, senior partner of London-based consultancy Panthea Ltd. Also author of Purpose: The Starting Point of Great Companies, Mourkogiannis says that in his consulting experience he found that successful leadership teams "knew where they were going." A firm's purpose helps to shape critical routines and relationships - both formal and informal ones. His advice to leaders starts with a suggestion to look at the company's current strategy and develop several options that capitalize on current strengths, then assess resources needed. Next, he suggests that leaders identify the key players on whom strategic success will rest, a group he calls the "Community of Purpose." Leaders should inventory the "moral ideas" of this group and the rest of the leadership team as well as understand their own values. Company history, too, will help reveal a firm's purpose. When a firm's purpose is clarified, the leader will also need to develop appropriate measures of progress toward achieving its purpose. (Mworld [Mourkogiannis], Winter 2006-2007, pp. 8-9) Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 40
has a human capital strategy that the board has reviewed and approved (82% of most admired, 62% of peers); reviews human capital measures, such as turnover, job acceptance rates and employee survey results, on a regular basis (more than 80%, 69%); has an emergency CEO succession plan that is reviewed at least annually (91%, 65%); prefers internal candidates for CEO succession (nearly 80%, 60%); has a customized CEO profile for future leaders that reflects the firm's strategy and business model (70%, less than 60%); evaluates CEO performance taking success in developing human capital into consideration (more than 80%, 66%). (Winning Strategy [Hay Group], 2007, pp. 1-6)
Reasons offered for project execution problems included inadequate time and resources (68%), lack of project management discipline (48%) and other less-cited issues, such as inexperience and the dueling excuses of "too little oversight by senior management" and "too much pressure from senior management." John Rahiya, executive consultant with Novations, said, "The amateurish management of high-priced undertakings is a problem organizations fail to acknowledge" and noted that project management is a training issue. ("Companies Concede" [Novations], May 9, 2007) Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 39 HR Expertise Supports Global Expansion, Issue 38 Turning Strategy into Reality Poses Challenges, Issue 38 Shuttling groups of thinkers off-site to brainstorm ideas might turn out to be an exercise in futility if the firm doesn't know how to execute those ideas, according to Sander A. Flaum, chairman of Fordham Leadership Forum. Leaders need to ensure that two conditions are met if the good ideas that are generated from such sessions are to be translated into action. First, the company culture must be one of accountability. If the firm has a history of coming up with lots of ideas but rarely implementing them, a lack of accountability is likely the reason, and it needs to be corrected. Second, the right players must be present in the session. Anyone who plays a key decision-making role (such as those in sales, budgeting, legal and others) needs to be present in order to ensure shared ownership. If these individuals are not there, they may end up blocking the idea since they had no opportunity to raise objections. Of course, all participants in such idea-generating sessions must be willing to speak openly. A good facilitator can keep the dialogue focused. Working through the issues with key decision-makers present and assigning clear accountability for implementation will ensure that good ideas are executed. (MWorld [Flaum], Winter 2006-2007, pp. 18-20)
Strategies must become "dynamic . transformational," and business models may need to change to "achieve long-term value creation," say George S. Yip of London Business School (now with Capgemini Consulting) and Gerry Johnson of Lancaster University Management School. Their historical research review shows that most strategies have been static, but a new approach is needed if organizations are to satisfy stakeholders. While changing business models can be risky, so is remaining with a particular business model indefinitely. Yip and Johnson write in the Spring 2007 issue of Business Strategy Review that in the past two decades, "the businesses in the most competitive markets that have been most successful have transformed their business models." The biggest challenge is deciding when, how and in what direction to make such changes. One approach is to maintain efficiency and profitability in the current business model and prevent its decline while considering other options. Having this dual focus in strategy management - managing "both routine and transformational strategic change" - is a challenge that "defines the exceptional manager," they conclude. (Business Strategy Review [Yip and Johnson], Spring 2007, pp. 14-15) HR Strategies + Business Strategies = Performance, Issue 37 When HR practices related to capabilities and incentives are aligned with business strategies, this can have a significant impact on knowledge-related performance, according to results of an academic study of 132 high-tech firms in China. Participating firms averaged 1,126 employees but ranged from 50 to 21,000. The study found "significant positive correlations . among HR practices, corporate culture and business strategy measures, and these measures were all significantly correlated with overall performance." Reward systems and a culture of sharing were shown to promote "knowledge-related performance." The two business strategies included in the study were "innovation" and "quality enhancement." (Human Resource Planning [Chow and Liu], 2007, pp. 50-53)Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 37
Five steps can guide a firm through the development of such a talent blueprint. Start with the firm's overall business strategy, and collect information on the key factors influencing the business and the current workforce strategy in order to analyze needs. Document the current structure and processes and map out accountability levels. Determine resources needed and automated reporting requirements. Clarify roles, identify needed competencies, develop career path progressions and design automated reports. Perform an assessment on how performance in each role will be tracked, measured and reported. Consider how technology can make these tasks more efficient. Develop the framework for an implementation plan. Include talent resourcing, staff development and progression tracking. (Perspective [Mercer Human Resource Consulting], March/April 2007, pp. 1-3) Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 36
Aligning Reward & Business Strategies a Priority, Issue 35 More than half (58%) of benefit specialists surveyed consider the clear alignment of their total rewards strategy with their business strategy one of their top five total rewards priorities for 2007, according to the 2007 Top Five Total Rewards Priorities from Deloitte Consulting, the 13th iteration of the study. In addition, 16% said that such alignment was their number-one priority. Respondents were 422 benefit specialists from U.S. firms that were either Deloitte clients or members of the International Society of Certified Employee Benefit Specialists. The survey also found that 56% planned to redesign part of their total rewards program in 2007 to better align employees' interests with those of the company, and 22% plan to create a more consistent and strategically aligned structure for their total rewards program on a global basis. Alignment was also one of the primary reasons respondents said they were redesigning specific components of their total rewards program, although not the top reason. Surveyed benefit specialists said that aligning with market-based benchmarking data was the primary reason for redesigning compensation programs (64%), health and welfare programs (51%) and retirement programs (50%), but reducing costs and improving the ability to attract, motivate and retain employees were frequently noted as top reasons for those redesigns. (2007 Top Five Total Rewards Priorities [Deloitte Consulting], 2007, pp. 1, 3-6) HR Supports Sustainability Strategies , Issue 35 HR's involvement in sustainability programs is strongest in areas such as training/development, ethics and engagement but weaker in change management, according to a study of nine of the world's best examples of firms with exemplary sustainability programs. Alcoa, Bank of America, BASF, The Coca Cola Company, Eastman Kodak, Intel, Novartis AG, Royal Philips and Unilever were included in the study. Academicians from Fairleigh Dickinson University examined specific HR-related practices to determine the strength of HR's support of corporate sustainability strategies. The factors examined were leadership development, training and development, change management, collaboration/teamwork, talent management, diversity/multiculturalism, ethics/governance, creating/inculcating values, health/safety and workforce engagement. HR's involvement in sustainability was strongest in leadership development, training and development, diversity, ethics, talent management and workforce engagement. HR's contribution to sustainability was weaker in change management, collaboration/teamwork, inculcating values and health/safety. (Human Resource Planning [Wirtenberg, Harmon and Fairfield], 2007, pp. 12, 15-17)
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People Strategy Drives Business Strategy, Issue 34 An organization's people strategy is a necessary precursor to the successful execution of its business strategy - "people must be in place, prepared and ready before the business strategy unfolds," wrote Matt Schuyler, chief human resource office at Capital One, in a 2007 issue of Talent Management Magazine. Schuyler suggested that talent managers work backward, "imagining a future, developing a master plan . [and] construct[ing] an operational means of getting to the desired destination." The relationship between the HR leader and the CEO must be a supportive partnership if a comprehensive talent management strategy is to be created. Schuyler said that organizations with documented talent management strategies can expect results such as increased revenue per employee, an improved market-to-book ratio, higher five-year total return to shareholders and less absenteeism. (Talent Management Magazine [Schuyler], January 2007, pp. 37, 52) HR Behind Social Responsibility Policies, Issue 34 HR's role in corporate social responsibility (CSR) issues is expected to grow, say 72% of HR professionals, according to the Society for Human Resource Management (SHRM). Developing policies and strategies that support social issues and creating metrics to measure the ROI of CSR programs are two ways HR can add value in this area. Already, about two-thirds of HR professionals are directly involved in corporate social responsibility programs in China (69%), the U.S. (66%), Australia (64%), India (64%) and Canada (64%), with even larger proportions reporting being involved in such programs in Brazil (83%) and Mexico (80%), according to the SHRM 2007 Corporate Social Responsibility Pilot Study. HR professionals in the U.S. also report being directly involved in community outreach programs (65%) and corporate governance regulation (49%). CSR practices reported most frequently in the U.S. include donating/collecting money for local charities, donating/collecting money for natural disasters and supporting the community through company-sponsored volunteer projects. (Workplace Visions [Society for Human Resource Management], 2007, pp. 3, 6, 8)Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 34 When Values Don't Align Business Can Derail, Issue 33 While 44% of U.S. employees say that they share their employers' values, about a third say that their values don't align with those of their employers, according to an April 2007 Management-Issues article. The article reported on a survey of 615 employees conducted by Minnesota's CO2 Partners, a leadership development firm. Values misalignment can potentially lead to decreased productivity and poor levels of employee engagement, according to CO2 president Gary Cohen. "It is disconcerting that leaders are not spending more time aligning their employees' values with those of their organization," said Cohen, noting that values dissonance can breed "passive unproductive behaviours and a silent sabotage of projects and ideas." (Management-Issues [Paton], April 5, 2007) Some Boards Too Involved in HR, Issue 33 It may be difficult to recognize when board members cross that fine line between asking the questions needed to fulfill their responsibilities and micromanaging, according to a 2007 article in HR Magazine. With an increased interest in financial and human capital issues following the passage of SOX, some boards are showing heightened interest in HR involvement beyond executive compensation issues. Steve Ford, managing partner of talent and leadership consultancy OI Partners, said HR leaders report working with their boards on issues such as leadership development, succession planning, corporate culture and diversity. And while increased exposure to human capital issues may help board members fulfill their fiduciary obligations to the firm, such exposure may also present them with the temptation to become overinvolved in operational issues. Peter Gleason, COO and director of research at the National Association of Corporate Directors, said, "You don't want the board mired in the day-to-day - that's management's job." Such zeal can prove disruptive, steering board members away from their more strategic roles and even undermining the CEO, experts warn. (HR Magazine [Grossman], January 2007, pp. 52-58)Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 33
"A leader can announce a strategy . but that strategy will only be realized if it's in line with the pattern of resource allocation decisions made at every level of the organization," write Bower and Gilbert. One way in which midlevel managers have an impact on strategy is "through their decisions about which proposals to send upward for corporate review." In this manner, both general and operational managers have an impact on the firm's ability to execute strategy. (Harvard Business Review [Bower and Gilbert], February 2007, pp. 74-76) Leaders Recognize People/Strategy Link , Issue 32 Globally, people issues are a significant factor in an organization's strategic decision-making, one that is expected to rise in significance in three to five years, according to a 2007 global survey of 531 HR and non-HR executives by Deloitte Touche Tohmatsu and the Economist Intelligence Unit. Regionally, nearly 60% of respondents from North America, 49% of those from the Asia/Pacific region and 48% of respondents in Western Europe considered people issues very or highly significant to strategic decision-making. There were some differences between HR leaders' and senior business executives' views on the subject, however. A greater proportion of senior executives (more than 60%) than of HR leaders (50%) considered people issues highly or very significant to strategic decision-making in 2007. Likewise, a larger proportion of senior executives (90%) than of HR leaders (86%) considered people issues highly or very significant to strategic decision-making in three to five years. (Aligned at the Top [Deloitte Development LLC], 2007, pp. 1, 5, 19)
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Proving the Worth of HR, Issue 31 It's not enough to gather HR data; HR must translate those numbers into "incremental value" that directly relates to the organization's most pressing financial matters, advises consulting firm president Theresa L. Seagraves. Equally important is attaching a time frame to the delivery of that value. Seagraves warns that "the lifespan of the perception of value is limited to the number of quarters before the organization's budgets are restated." Therefore, HR must control those perceptions that HR value is short-lived and address the dilemma that future gains can become assumed, an expectation that causes executives to consider "ongoing contributions of existing programs [to be] counted as zero." One way to manage these expectations is to make use of benchmark studies that can prove the firm's HR value is on par with or superior to that of others in the industry. Seagraves also suggests compiling HR data "on a mid-quarter reporting cycle," thereby giving HR time to analyze metrics, interpret them in terms of "incremental financial value," and gather support before formally releasing the findings. (Strategic HR Review [Seagraves], January/February 2007, p. 7)Leaders Optimistic About Strategy Execution, Issue 31 Business leaders were leaning slightly to the more confident side of the equation when asked about their organizations' success at executing and implementing strategy, according to the more than 1,500 business professionals responding to a 2006 global survey. The poll fed a study by the American Management Association and the Human Resource Institute, The Keys to Strategy Execution, which found that, on a scale where 1 = not at all successful and 5 = very successful, respondents averaged 3.26. The proportion of respondents reporting that their execution efforts were very successful was rather small (3.3%), with larger proportions choosing a rating of 4 (34.9%), 3 (47.8%) and 2 (12.1%). Just 1.9% of respondents said their execution efforts were not at all successful.The survey also uncovered some of the gaps that exist between the strategic actions that organizations take to implement strategy and the perceived importance or value of those actions to the firm. The four actions that produced the largest gaps (the perceived importance of the action was rated higher than the extent of the action) were as follows: ensuring appropriate decision-making speed, utilizing succession planning to develop leaders who are good at strategy execution, ensuring employees at all levels feel engaged in and motivated by the execution process, and ensuring clear accountability. (The Keys to Strategy Execution [American Management Association and Human Resource Institute], 2006, pp. 49, 58, 66) Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 31 An Organizational "Roadmap for Growth", Issue 30 A strategic agenda needs to engage employees at all levels of the organization, according to Daniel Wolf, author of Prepared and Resolved: The Strategic Agenda for Growth, Performance and Change. Such an agenda establishes the firm's strategic direction by outlining its purpose, its values and its goals. It also outlines the resources needed to progress, then integrates the resources and the direction to create an action plan. "The strategic agenda connects creative and analytic thought," writes Wolf. It also allows one to view the company's purpose through the lens of "natural goals" that create value; Wolf defines these natural goals as "competitive advantage, financial performance, customer connection and corporate stewardship." The strategic agenda pushes these messages through employees at all organizational levels, helping them to connect their roles to the firm's "roadmap for growth, performance and change." (MWorld [Wolf], Winter 2006-2007, pp. 38-41) Is Your Strategy On Track?, Issue 30 Strategic decisions can fall victim to a number of "distortions" and "deceptions," according to behavioral economic theory explored by Dan P. Lovallo and Olivier Sibony in the first issue of The McKinsey Quarterly in 2006. Their article, "Distortions and Deceptions in Strategic Decisions," was analyzed by Mark Hanna in Wharton Leadership Digest. "Distortions" can arise when the decision-maker is overly optimistic about likely results (causing inaccurate projections) or overconfident about situational knowledge (causing one to underestimate risks). "Deceptions" can arise when managers misalign time forecasts to benefit their personal situation or when executives show bias to a proposal from a colleague. This sometimes occurs when boards fail to adequately debate an issue because of group trust in a specific executive, a situation called "sunflower management." Another barrier to strategic decision-making is what is called the "principal-agent problem," where there is a conflict between the interests of the employee, or agent, and the interests of the company, or principal. (Wharton Leadership Digest [Hanna], September 2006) Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 30
Global Survey Finds HR Ranks Low in Strategic Roles, Issue 29 Of five roles for HR professionals, "strategic partner" is one participated in to a lesser extent, and of six competencies, "strategy architect" is one demonstrated to a lesser extent, according to a comprehensive study by The RBL Group and the Ross School at the University of Michigan. More than 10,000 HR professionals and line managers worldwide participated in this fifth iteration of the study. The 2007 Human Resource Competency Study described five key roles for HR professionals (functional expert, leader, employee advocate, strategic partner and human capital developer), and respondents in all six world regions ranked strategic partner either last or next-to-last as the role they participated in to the greatest extent. In addition, the study described six competency domains in which HR professionals need to be proficient, and "strategy architect" ranked last in India, fifth in Latin America and China and fourth in the U.S./Canada, Europe and the Australia/Asia Pacific regions. (2007 Human Resource Competency Study [Ulrich, Brockbank and Johnson], 2007, pp. 4, 6, 11, 13-15)A Three-Faceted Approach to Alignment, Issue 29 Leadership - of the organization, operations and people - is the key to strategic alignment, according to Antony Bell, author of Great Leadership: What It Is and What It Takes in a Complex World. Bell suggests that strategic alignment requires a three-pronged leadership approach. First, strong organizational leadership sets the overall direction for the firm. "Your purpose pushes you, your vision pulls you and your values keep you from veering off the road," writes Bell. Providing sufficient resources for the journey and getting employees to embrace the purpose, vision and values can translate to organizational leadership effectiveness. Next, strong operational leadership can lead to efficiency in tasks and operations. "From this point on, strategic alignment is a matter of execution," according to Bell. The third aspect, strong people leadership, entails "bringing out the best in people" by ensuring their roles use their talents and skills and contribute to the firm's overall direction. (MWorld [Bell], Winter 2006-2007, pp. 10-12)
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How HR Can Help Build An Ethical Organization, Issue 28 "HR should take the lead in creating an ethical work environment", posits Chris Bart in Canadian HR Reporter. Bart is the author of A Tale of Two Employees and the Person Who Wanted to Lead Them and founder of The Directors College at McMaster University. He suggests that HR can play a major role in influencing the behaviors that create an environment of trust. To begin, HR should create a code of ethics that "details in precise terms both acceptable and unacceptable behavior." This ethics code should be provided to all applicants, and interviewers should specifically seek out candidates' acceptance of the principles. In addition, job descriptions should refer to these standards, and employees should be required to sign annual statements acknowledging the code. To eradicate old standards of behavior, HR should embark on a "comprehensive and aggressive training program" that Bart suggests include role-playing and case studies. Equally important, ethical behavior should become an "important criterion for performance measurement." Bart adds that employee surveys may need to be revised to collect data on ethical behavior and its impact. (Canadian HR Reporter [Bart], October 23, 2006)Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 28 European HR Leaders See Strategy in Their Future, Issue 27 In Europe, HR spends almost twice the time in the activity of delivering HR services that it does in the activity of strategic partnering, according to a 2007 Mercer Human Resource Consulting survey of senior HR executives in more than 300 organizations in Europe and the Middle East. Just 16% of HR staff time is devoted to strategic partnering, while 31% is spent delivering HR services. Other HR activities that round out HR work time are transactions/recordkeeping (28%), designing HR systems/programs (13%) and compliance/auditing (12%). Respondents projected that in two to three years they would be placing increased emphasis on the principal HR functions of human capital strategy, talent management and leadership development and less emphasis on operational excellence in HR and change management. (HR Transformation in Europe [Mercer Human Resource Consulting], 2007, pp. iii, 6-7) Getting HR Out of the Comfort Zone, Issue 27 HR professionals need to actively plan time to get out of their offices and into the business if they want to understand their organization and serve it in a more strategic manner, according to panel experts participating in interviews with the Society for Human Resource Management (SHRM). Isaac E. Dixon, a vice president of HR at an Oregon credit union and member of the SHRM Organizational Development Special Expertise Panel, says that time spent in customer call centers and branches helps HR professionals "stay connected to the business." Dixon cautions, however, that one must "plan time for it to happen, because if you don't plan the time, the days, the weeks, the months, the years slip away from you. And the next thing you know, you're just too far removed from the realities of the business." Bonnie A. Daniels of the SHRM Employee Safety, Health and Security Special Expertise Panel agrees. "Get outside of the comfort zone of your office and understand what the business is all about," she advises, suggesting that HR professionals ride with a salesperson and visit the shop floor. She also recommends aligning oneself with a mentor from marketing, sales or operations to broaden business perspective. (The Look and Feel of Strategic Human Resource Management [Dooney], 2006, pp. 3-5, 21)Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 27
In Many Firms, HR & Strategy Still Don't Mix, Issue 26 The vast majority (96%) of firms with an HR strategic plan have aligned those plans with the organization's strategic plan but, overall, HR's involvement in strategy has room for improvement, according to a 2006 survey of 427 HR professionals by SHRM Research. Just 56% of surveyed firms indicated that their HR departments had a strategic plan in place, while three-quarters (75%) of surveyed firms had an organizational strategic business plan. What's more, only 32% of respondents, overall, indicated that HR was involved to a large extent in the alignment of business goals. However, results were more encouraging among firms that had an HR strategic plan (42%) than among those that did not (18%). (2006 Strategic HR Management [Fegley], October 2006, pp. 2, 5, 8, 14-15)Boards Look to HR for Practical Support, Issue 26 HR must be prepared to serve the board in five ways - through understanding, assessing, disclosing, balancing and delivering, according to Andrew R. McIlvaine, a staff expert at Human Resource Executive. First, HR needs to understand the responsibilities of the board and the scrutiny and pressure under which it operates. Next, HR can assist the board in assessing its skills, strengths and gaps. Third, HR has an obligation to be forthright about providing data and news regarding developments. Fourth, HR must balance its responsibilities toward the board, the CEO and the shareholders. Last, HR must demonstrate its dependability by ensuring that important data and documents are readily available for board business in a timely manner. (Human Resource Executive [McIlvaine], September 2006, p. 54)Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 26
Alignment is even trickier when an organization is working with global teams; geographic and cultural differences need to give way to team performance, according to Howard M. Guttman of Guttman Development Strategies and author of When Goliaths Clash: Managing Executive Conflict to Build a More Dynamic Organization. Guttman suggests that alignment must occur in three critical areas in order for global teams to succeed. First, the strategic and operational goals must align. Team members must be clear on the product, services and markets that will and will not be pursued. Second, the roles and responsibilities of global team members must be aligned to minimize overlap. Third, decision-making protocol and styles must be aligned to specific situations. (Harvard Management Update [Guttman], February 2007, pp. 1-3) How to Boost HR's Business Know-How, Issue 25 HR can build its business savvy in five ways - by learning about operations, working with the board, absorbing like a sponge, mastering performance assessment and becoming an outsourcing expert, according to Kristen B. Frasch, a staff expert at Human Resource Executive. First, be willing to learn and work outside the HR realm. Next, understand how HR contributes to shareholder value. Third, read, meet people, enroll in courses, attend conferences and expand your frame of reference. Fourth, understand how data is measured against benchmarks to determine relative performance. Last, learn to assess the relative merits of outsourcing or offshoring work. (Human Resource Executive [Frasch], September 2006, p. 52) Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 25
Leaders Strategize -- HR Implements, Issue 24 HR is most frequently vested with the primary responsibility for implementing and leading organizations' succession plans, according to the 385 HR professionals responding to the 2006 Succession Planning Survey Report from SHRM Research. Of firms with either a formal or informal succession plan, 40% placed the primary responsibility for implementing the plan with HR, while 19% said senior management was primarily responsible, 13% the president/CEO, 10% a chief operating officer, 6% a senior vice president, 5% the board of directors, and 4% the chief financial officer. Similarly, HR most often had primary responsibility for leading succession planning efforts (36%). Other organizations placed such responsibilities with the president/CEO (20%), senior management (14%), chief operating officer (9%), senior vice president (7%), chief financial officer (5%) or board of directors (4%). (2006 Succession Planning Survey Report [Fegley], June 2006, pp. 3, 10-11)Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 24
Short-term recruitment outsourcing may be a valuable tool for organizations that want to involve HR professionals in strategic planning, says Gary Cormier, executive vice president of talent for the career site BrassRing. Cormier notes that short-term arrangements for outsourcing can free HR practitioners from routine and time-consuming tasks associated with sourcing and screening applicants, while also providing organizations with a sense of the benefits they might expect from longer-lasting outsourcing arrangements. RSO (recruitment service outsourcing) on a short-term basis also can help boost recruiting capabilities for organizations that are expanding globally, Cormier says, "allowing human resources to focus . on harvesting the talent." (Workspan, November 2006, pp. 12-13) Human capital strategies link to improved corporate financial performance, Issue 22 A Watson Wyatt Worldwide model that links human capital strategies to better employee commitment and engagement, leading to improved corporate financial performance , is presented in a 2006 Hanover Research Council paper. The model begins with well-designed human capital strategies that are effectively implemented and communicated. Such programs related to compensation/benefits, training/development and the work environment tend to be rated more favorably by employees who are highly committed and engaged than by those who are not, according to data from WorkUSA. Likewise, improvements to these programs that raise satisfaction tend to have a positive impact on high-commitment and high-engagement employees, which lowers the risk of turnover among this group and has a positive impact on productivity and, in the end, corporate financial performance. (Human Resources: Performance Metrics and Auditing [The Hanover Research Council], May 2006, pp. 25-30)Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 22
Employee alignment with organizational goals is lower in the U.S. than in the Asia-Pacific region and Canada, according to a series of Watson Wyatt Worldwide global work studies. Such organizational alignment occurs when employees understand what is required of them to make their organizations successful. In the Asia-Pacific region, 65% of employees reported high alignment levels, compared with 63% of Canadian employees and 53% of employees in the U.S. ("A Comparison of Attitudes Around the Globe" [Watson Wyatt Worldwide]. Obtained May 4, 2006)
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Source: StepStone
(StepStone News & Research, July 20, 2006)
Organizations Still Trying to Get Aligned, Issue 20
U.S. firms report that they made progress in aligning their workforces with their business strategies but they still have a way to go, according to results from the Saratoga and PricewaterhouseCoopers 2005/2006 Human Capital Index Report. The study of 288 U.S. organizations found that 80% of responding firms said their workforces were more aligned with business strategies in 2004 than they were three years prior to that. However, nearly one in three firms considered their workforce/strategy alignment as "somewhat aligned" at best. (Results from the 2005/2006 Human Capital Index Report [Bokina], September 26, 2005, pp. 2, 8)Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 20
Can You Be More Strategic?, Issue 19 HR professionals can become more strategic by examining five basic HR processes - workforce planning/staffing, learning/development, organization development, performance management and employee relations - through a more strategic lens, according to Roadmap to Strategic HR, a book by consultant Ralph Christensen, whose career has included executive posts with Hallmark Cards Inc., Wyatt Company and Digital Equipment Corp. Engineering. Christensen devotes a chapter to each fundamental process, looking at what types of HR activities are typically included and presenting tools and examples of how this work can be approached more strategically. Christensen asserts that HR can transition itself to a more strategic role through 10 steps that begin with assessing the firm's readiness to embark on an agenda of change. (Roadmap to Strategic HR [Christensen], 2006, pp. 28-29, 118)
Leaders Say Execution Depends on Alignment, Issue 19
Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 19
Success Means Aligning Your Entire Organization, Issue 3/29/07
A new economic reality - where excess demand has given way to excess supply - requires creativity, leadership, competency, alignment and values in order to succeed, says Peter Georgescu, author of The Source of Success: Five Enduring Principles at the Heart of Real Leadership. The chairman emeritus of advertising agency Young & Rubicam shared his thoughts in a recent issue of Leader to Leader magazine. "Everybody in your business - no matter what department they work for - is going to be in the marketing business," said Georgescu. An organization must be prepared to compete via its creativity, and knowledge of the customer will be essential. To enhance customer relationships, leaders need to "align the entire organization and focus on the ultimate objective, which is to provide the consumer with a superior - in fact and in perception - product experience," Georgescu said. (Leader to Leader, Winter 2006, pp. 62-65)
Executive Teamwork Defines Business Objectives, Issue 3/29/07
Leaders are finding that continuously involving managers in strategy discussions is enabling quicker and better decisions,
according to a Wall Street Journal article. Harrah's Entertainment CFO Jonathan Halkyard, for example, credits monthly meetings with 20 members of the executive team with the ability to quickly determine business priorities as well as what's not working. Issues such as global expansion, new collaborations and potential shifts in direction are regularly explored at planning meetings. The cycle has "shortened considerably, from yearly to monthly and even bimonthly," says Halkyard.
Ford Motor Co.'s new CEO, Alan Mulally, is expected to regularly involve top managers in strategy discussions, too. In his previous post as head of the commercial airplanes division at Boeing - a position he left in September 2006 - Mulally held strategy meetings with his top 30 managers on a weekly basis, eventually expanding the meetings to include managers at lower levels. Mulally says the rapid design and introduction of the "Dreamliner" aircraft was a result of the frequency with which the management team met. (St. Petersburg Times [Hymowitz - Wall Street Journal], September 12, 2006, p. 6D)
What Does Your Planning Process Achieve?, Issue 3/15/07
HR's Involvement in Strategy, Issue 3/15/07
2007 Brings New Challenges for HR, Issue 2/28/07
Recruitment/retention, strategic planning and cost containment are among HR's top priorities for 2007, according to preliminary results from The Bureau of National Affairs' HR Department Benchmarks and Analysis 2006 Draft. The survey of U.S. employers reported that 38% of respondents selected issues related to recruitment or retention as their top priority for 2007. Another 19% chose strategic planning and management, which included such issues as talent management, succession planning and measurement. Cost containment, especially for benefits, was noted as the top priority for 14% of respondents, and 22% noted other priorities for 2007, including regulatory compliance and productivity/quality improvements. (HR Department Benchmarks and Analysis 2006 Draft [Bureau of National Affairs, Inc.], 2006, Ch. 5, pp. 4-5)Outsourcing a Leading HR Strategy, Issue 2/28/07
Nearly three-quarters of HR professionals (74%) outsource at least one HR/administrative service to an external service provider, and functions carrying potential liability are among the most commonly outsourced ones according to a 2006 e-mail survey of more than 5,000 HR industry professionals conducted by outsourcing firm HRAmerica. Nearly half of respondents (46%) indicated they outsourced employee background screening. An increased emphasis on security, coupled with rising concerns about discrimination and negligent hiring, are reasons behind this trend. Also, 46% of respondents indicated they outsourced payroll, with a breakdown of 36% using an ASO and 11% using a PEO. Other functions outsourced include benefits administration, legal compliance, employee self-service and, to a much lesser extent, recruiting. (Top HR Trends in 2006 [HRAmerica], 2006, pp. 4-6)Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue, February 28, 2007 Firms with "world-class" HR organizations deliver results that are superior to those of their peers through less turnover, quicker recruiting, lower expenditures and fewer HR staff, according to the Book of Numbers study from the Hackett Group. The analysis combed through a database of 2,100 global companies to identify management practices in the best-performing HR functions. Among the positive findings were the facts that world-class HR organizations experienced 67% less voluntary turnover, needed 46% fewer new recruits, hired new employees 11% faster, spent 13% less per employee and functioned with 15% fewer HR staff members than their peers. Also, in developing strategic workforce plans, these world-class HR departments were six times more likely to regularly consult with senior managers, 12 times more likely to have retention plans for key performers, four times more likely to focus on diversity in resource planning and twice as likely to regularly consult with senior managers to review succession plans. (Personnel Today [Sutton, UK - Thomas], July 18, 2006)
HR Usually Handles People-Planning Duties, Issue 2/15/07
Strategic planning activities involving human resource forecasting and planning are more likely to be handled solely by the HR department (61%) than shared with other departments (32%), while responsibility for other types of strategic activities is more likely to be shared. Preliminary results from the 2006 iteration of The Bureau of National Affairs' annual survey of U.S. employers found that organizational development activities are more likely to be shared with other departments (53%) than handled solely by HR (33%). This is also true of succession planning (48% shared, 21% HR) and mergers and acquisitions activities (31% shared, 5% HR). International personnel/HR administration, however, is another strategic activity more likely to be handled solely by the HR department (23%) than shared (11%). (HR Department Benchmarks and Analysis 2006 Draft [Bureau of National Affairs, Inc.], 2006, Ch. 5, p. 9)
Top HR Organizations Set the Bar Higher, Issue 2/15/07
Making HR Budgets S-t-r-e-t-c-h, Issue 1/31/07
Crafting a Shared Services Strategy, Issue 1/31/07
In implementing a shared services center, establish a project team with representatives of key stakeholder groups. Use a pilot project to roll out the initiative. Develop a comprehensive communication effort, including brochures, a Web site, videos and other tools. Then recruit and train shared services center personnel to provide excellent customer service.
For the ongoing management of a shared services center, be sure to address job designs, new skills requirements and career paths for those providing services. Offering job rotations is one method to help HR practitioners gain wider knowledge. HR must also be sensitive to maintaining relationships with business units to compensate for the loss of face-to-face communications. (HR Shared Service Centres [Chartered Institute of Personnel and Development], February 2006)
The Time It Takes to Strategize, Issue 1/16/07
Just over one-quarter (26%) of an HR professional's time, on average, is spent on strategy, with directors spending a larger proportion of time on strategy than HR professionals at other levels, according to a survey of 1,400 HR professionals by Personnel Today. HR directors spend an average of 37% of their time on strategy, while department heads spend 28%, managers 24% and HR staff members 18%. Overall, fewer than one in five HR professionals spend more than half their time on strategy. The estimated distribution of survey respondents' time spent on strategy is as follows: 76% to 100% (3%), 51% to 75% (14%), 26% to 50% (24%), 11% to 25% (31%), 1% to 10% (23%) and none (7%). (Personnel Today [Dempsey], May 16, 2006, pp. 22-23)
What Lies Behind Organizational Policies?, Issue 1/16/07
HR professionals need to consider whether current policies can withstand the pressures of a changing workforce, a changing workplace and a changing business environment, according to authors of a Society for Human Resource Management white paper. To begin, the workforce is changing in many ways that might render current HR policies unsatisfactory. These factors include an increasing proportion of women in the workforce, more non-traditional families, a more ethnically diverse workforce and the addition of younger-generation employees. All of these cohorts expect policies that are relevant to their individual situations and needs, not policies written for yesterday's workforce.
The workplace, too, is evolving to one that warrants a second look at how and why HR policies are developed. With more employees working flexible schedules, working from home and working on self-directed teams, policies should reflect an emphasis on goal achievement rather than task completion. This means changing the model from one of "controlling the means to achieving the ends," write the authors.
In addition, the current business environment is rife with change. Competition, quality, customer satisfaction and agility are the watchwords of today's organizations, and HR policies that impede the firm's flexibility to adapt can no longer be tolerated. (SHRM Information Center [Rubenfeld and Laumeyer], February 2006)
Strategy Execution: Secrets of Success, Issue 12/20/06 Incentives and controls are important components of a sound strategy execution plan, according to Lawrence G. Hrebiniak, author of Making Strategy Work. Incentives can be either extrinsic or intrinsic, and those that encourage behavior in line with desired outcomes tend to share certain characteristics. The best incentives specifically tie rewards to the achievement of measurable strategic goals. Accountability is critical, but success is not measured in terms of "all of nothing"; it is measured in "degree of accomplishment along some continuum of performance," writes Hrebiniak.
Controls supply critical feedback about execution and provide the organization with either reinforcement or an opportunity to learn and make adaptations. To determine if there is any significant deviation between objectives and actual performance, organizations need valid and timely information. (Making Strategy Work [Hrebiniak], 2005, pp. 185-191, 194, 204)
Leveraging HR Expertise to Explain Strategy, Issue 12/20/06
Building a Dynamic Strategy, Issue 12/6/06
Firms need to look outside (to the market) and inside (to their capabilities) to develop their strategies, according to a 2006 Harvard Management Update article. Unfortunately, once some firms find a strategy that works, they want to stick with it indefinitely and, therefore, fail to hone needed strategic thinking skills. But environments change and strategies must too, so strategy formulation must be a continual process that leaders "permanently embed" in their firms, according to Michael Porter, a Harvard Business School professor. Following are several steps toward building a strategy.Study the external market to determine threats (such as new competitors, demographic changes, economic trends and access to suppliers) and opportunities (such as new customer segments and better technology). Create a team with broad representation, and invite customers, vendors and other external experts to share their views.
Examine internal resources (capital, skills, capabilities, management practices) to see if they align with the strategy. The best strategy in the world can't succeed if the resources are not available to facilitate it.
Discuss each threat and opportunity broadly and prioritize them. Validate facts and assumptions and seek out missing information. Come up with several alternatives and run them by trusted colleagues to avoid "groupthink."
Determine activities that support the strategy and link them into a chain that both provides mutual support internally and blocks the competition.
Use communication and coordination to ensure that every employee understands how his or her job contributes to the organization's strategy. Create alignment from employees to activities to strategies.
(Harvard Management Update, January 2006, pp. 11-12)
Technology, Globalization and Governance, Issue 12/6/06
There are a number of ways in which corporate governance issues are affecting today's leaders, and technology and globalization are behind most of them, according to Eleanor Bloxham, CEO of advisory firm The Value Alliance and Corporate Governance Alliance. There's been more cooperation lately between countries - such as the relationship between the U.S. Securities and Exchange Commission and similar panels in other countries - but jurisdictional conflicts still flare within countries, especially in matters concerning financial oversight. Issues regarding shareholder rights and the timeliness, content and format of shareholder communications are important concerns now. Likewise, debate continues about accounting standards related to economic performance and how that links to pay. Boards are likely to become even more involved in strategy and oversight, while the understanding of how the interests of various constituents intersect will provide further challenges. (Wharton Leadership Digest [Bloxham], March 2006)
Senior Leaders' Vital Role in Alignment, Issue 11/21/06
The involvement of senior management in communicating strategy is a key factor in employees' understanding of organizational strategy and how their jobs contribute, according to Angela Sinickas, president of international communication consultancy Sinickas Communications, Inc. Her recent analysis of audits showed, however, that there is plenty of room for improvement. On average, 38% of respondents categorized themselves as well informed or very well informed about their firms' organizational strategy, showing little change since 2002. Also, 43% said they were well informed or very well informed about how they could contribute to organizational goals - another response showing little movement. In comparing firms at the high end of communication scores with those at the low end, Sinickas discovered certain practices that affected score variation. Following are some of those practices and the differences in scores for those firms at the high end.
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frequent strategy explanations from senior management (12 percentage points higher)
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access to an intranet (11 percentage points higher)
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frequent access to a printed or electronic newsletter (9 percentage points higher)
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frequent communication about company strategy from supervisors (5 percentage points higher)
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access to staff meetings (5 percentage points higher).
Employers: Strategy Communication Needs Help, Issue 11/21/06
Employers are not as successful as they'd like to be in communicating strategies to employees, according to a global survey by Right Management Consultants and the International Association of Business Communicators (IABC) Research Foundation. Of the 472 organizations participating in the survey worldwide, the two biggest employee communications goals are aligning employees to business strategies (63%) and actively involving managers and leaders in worker communications (42%). In addition, employers aren't especially satisfied with how well those communications are going. Only 37% said their efforts to align employees with business strategy have been successful, and nearly half (48%) said their efforts were not effective at getting managers and leaders actively involved in worker communications. Chris Gay, a senior VP with Right Management Consultants, said, "Companies with employees who understand and can carry out their employer's business strategy tend to have higher worker retention rates and are generally more productive than those with disengaged work forces." ("Only One-Third of Companies" [IABC News Centre], press release,
Consistent Strategy Execution Challenges CEOs, Issue 11/7/06
Consistent execution of strategy by top management is one of the top 10 challenges facing CEOs, with one-third (33.4%) choosing it as the challenge "of greatest concern," according to the CEO Challenge 2006 survey from The Conference Board. Overall, the 658 leaders responding to the survey placed consistent execution of strategy by top management third in the ranking of 91 challenges, with leaders from the U.S. ranking it second and those from Europe ranking it fourth. By industry, it was tops on the list of challenges for firms in both the manufacturing and financial services sectors and ranked second for firms in "other services."
Speed to market also figured prominently in the list of top 10 challenges. It was in eighth place overall, with 22.7% of respondents citing it as the challenge of greatest concern, and it tied for fifth among firms in Asia, ranked eighth among European CEOs and placed 10th among those from the U.S. (CEO Challenge 2006: Top 10 Challenges [The Conference Board], 2005, pp. 3, 5, 9)
Applying the Balanced Scorecard to Corporate Strategy, Issue 11/7/06
While corporate structures have morphed over the years, strategy execution may be enhanced if firms find a structure that works and then customize a system to align it with strategy, according to Balanced Scorecard experts Robert S. Kaplan and David P. Norton. While many firms have implemented the Balanced Scorecard methodology for business units, Kaplan and Norton say it can also be applied to corporate-level strategy.
For example, the financial quadrant of the scorecard might be used to monitor resource allocation, acquisition of new businesses and negotiations with external parties such as suppliers and unions.
The customer quadrant might reflect synergies realized "by leveraging relationships across multiple business units to offer common customers lower prices, greater convenience or solutions more complete than specialized competitors can provide."
The process quadrant might track savings or improvements generated through coordination with various business units, such as manufacturing, purchasing and distribution.
And the learning and growth quadrant might reflect the value of knowledge management and human capital development initiatives.
The alignment of enterprise-level scorecards with business-unit scorecards can be accomplished through "strategic themes," say Kaplan and Norton. Three to five themes are a workable model. For example, reducing the costs of providing customer service, identifying new customer segments, and strengthening customer relationships through encouragement of additional product purchases might be three separate themes that would then be reflected in each initiative's goals, measures, resources and actions. To execute each strategic theme, Kaplan and Norton suggest that executives first communicate its value - "how the whole is more valuable than the sum of the parts" - then name a senior executive to take ownership of the theme and have a team develop the strategic initiatives that will support the theme. (Harvard Business Review [Kaplan and Norton], March 2006, pp. 102-105, 107)
Public Sector Embraces Strategic Role for HR, Issue 10/18/06
HR exec