William J. Conaty GE Professor of Strategic HR The Strategic HR Organisation: Building Competitive Advantage Through People Patrick M. Wright William J. Conaty GE Professor of Strategic HR Cornell University

Developing an Effective HR Strategy Business, People, and HR Strategy Business Strategy: Pattern in a stream of decisions where those decisions are about where, how, and with what to compete. People Strategy: Answers who is important to the business strategy, why are they important, and how can they be leveraged to create competitive advantage? HR Strategy: Provides a roadmap for how the activities of the HR Function will support the execution of the strategy by having the right people in the right places doing the right things at the right cost

Strategic Human Capital Management What is Strategic HCM? Strategic HCM consists of defining, designing, developing, and delivering competitive advantage through people

People Operations (Doing) Strategy (Deciding) Business Operations Business Strategy Business Deliver Define People HR Operations HR Strategy Design Develop HR Function

People Operations (Doing) Strategy (Deciding) Business Operations Business Strategy Business Define People HR Operations HR Strategy HR Function

Define Defining consists of helping business leaders to identify the people implications of the business strategy including key talent pools (which jobs/people are critical to the successful execution of the strategy?) and key people issues (competencies, retention, engagement, cost)

People Operations (Doing) Strategy (Deciding) Business Operations Business Strategy Business Roles: Full Contributor Facilitator Subject Matter Expert Define People HR Operations HR Strategy HR Function

People Operations (Doing) Strategy (Deciding) Business Operations Business Strategy Business Define People HR Operations HR Strategy Design HR Function

Design Design entails identifying the most important priorities for the HR function, and developing an HR strategy to guide the function toward supporting the business strategy

People Operations (Doing) Strategy (Deciding) Business Operations Business Strategy Business Define People HR Operations HR Strategy Design HR Function Role: Implementer

People Operations (Doing) Strategy (Deciding) Business Operations Business Strategy Business Define People HR Operations HR Strategy Design Develop HR Function

Develop Develop refers to the creation and/or modification of HR systems and processes that will enable the firm to attract, develop, motivate, and retain the human capability necessary to successfully execute the strategy.

People Operations (Doing) Strategy (Deciding) Business Operations Business Strategy Business Define People HR Operations HR Strategy Design Develop HR Function Key Issues/Levers: HR Processes HR IT (data) HR Professionals Skills/Perspective

People Operations (Doing) Strategy (Deciding) Business Operations Business Strategy Business Define Deliver People HR Operations HR Strategy Design Develop HR Function

Deliver Delivery consists of ensuring that HR processes are effectively and efficiently conducted by line managers in the organization to achieve the human capability necessary to execute the strategy.

People Operations (Doing) Strategy (Deciding) Business Operations Business Strategy Business Key Issues/Levers: Line Managers’ HR Engagement Process Simplicity HR Professionals Competencies Deliver Define People HR Operations HR Strategy Design Develop HR Function

Key Findings Our work reveals the following features of an effective people strategy. A focus on business needs before deciding what to do. A good understanding of how the organisation’s people and capabilities enable success. Clear linkages between HR actions and business outcomes. Tracking and communicating performance against metrics. A feedback loop for evaluating the effectiveness of strategy and supporting the planning cycle.

Summary While the research for the report began with a focus on HR strategy, what became quickly apparent is that HR strategy cannot be clearly understood without the context of the business strategy and operations. While HR strategies varied in terms of formality, codification, etc., the key is that effective HR strategy is seamlessly connected to business priorities.