Beyond Tactical Frankie S. Jones, Ph.D. 2009.

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Presentation transcript:

Beyond Tactical Frankie S. Jones, Ph.D. 2009

Strategic Human Resource Management This module is divided into three sections: Transformation to strategic human resource management (HRM). Strategic engagement. The future of strategic partnerships. ©SHRM 2009

Transformation to Strategic HRM By the end of this section, you will be able to: Describe the evolution of HRM. Define strategic HRM. Distinguish between strategic and tactical HR activities. Explain the role of the HR professional. Understand steps in building a strategic relationship. ©SHRM 2009

Evolution of the HR Function Purchasing Labor Relations Personnel Human Resources (HR) Strategic HR What is today known as human resources (HR) has evolved dramatically in name and function since the mid 20th century. Early on, an organization’s purchasing department included human labor in its purview. The purchasing department hired and fired at best cost and negotiated labor contracts. The function added professionals skilled in labor law and negotiation with the rise of unions that were bargaining for talent and wages. The term “personnel” became common as professionals in the function took over the administration of employee benefits and compensation. Another change in name gained popularity—human resources—though there was little difference in the core functions of the past: administration, labor law and employee relations. The next step in the evolution is upon us—strategic HR—where professionals manage organizational and employee performance. According to Christensen (2006), “HR needs to go from focusing on transactional tasks to delivering strategic and transformation work. The catalyst for this change is a new set of business realities: globalization, customer choice, technological change, and employee diversity. HR expertise should help business leaders reach their goals. The new HR must include OD and change programs. HR professionals should have competencies in large-scale systems change.” The skills necessary to meet this modern transformation include a background in business strategy, people, systems and the organization. In addition to the new business realities that Christensen refers to, outsourcing is sparking change. According to a 2004 SHRM study, almost 60 percent of organizations responding said they currently outsource at least one HR function. Many of the most common functions outsourced are transactional and administrative in nature, including employee assistance and counseling, health benefits administration and temporary staffing (Robinson and Robinson, 2005). As more transactional, administrative tasks are taken off the hands of internal HR professionals, they now have the opportunity to focus on more strategic, value-added projects and initiatives. Source: Christensen, R. (2006). Roadmap to strategic HR: Turning a great idea into a business reality. New York: AMACOM. ©SHRM 2009

Definitions of Strategic HRM Is focused on “…building competitive advantage, to enabling business strategy, to fulfilling customer needs” (Christensen, p. 12). “…the majority of HR time and resources is focused to optimize workplace performance in order to maximize the results of the organization. HR departments must be accountable not for what they do but for the results they are providing—from providing perceived value to demonstrating actual value to the business” (Robinson & Robinson, p. 4). Here are two definitions of strategic HRM. ©SHRM 2009

Three Categories of Work Transactional work: Administrative, order-taking. Benefits individuals. Tactical work: Solution-focused. Benefits employee workgroups. Strategic work: Long term. Linked to one or more business goals. Solution-neutral in early stages. Requires multiple solutions or tactics to be implemented. Benefits business units and perhaps the entire enterprise. Strategic Tactical Transactional Now let’s talk more about what types of work are considered transactional, tactical and strategic. Transactional: Administrative, order-taking. For example, updating an individual employee’s HR records, filling a vacant position, locating a training program for an individual. Completing this work efficiently and effectively is a requirement to earn credibility to work strategically. Tactical: Solutions offered. Most HR work over the past 20 years is tactical. For example, recruitment initiatives, training programs, restructuring of departments, succession-planning process. Strategic: Work that moves the business into a favorable position, supporting one or more courses of action developed by the organization’s leaders. Characteristics of strategic work -- Long term (two or more years). Linked to one or more business goals. Solution-neutral in early stages of partnering. When a client approaches you with a tactical request (for example, increase negotiation skills of sales teams), resist the urge to offer an immediate solution (for example, more training). Focus on the result the client is seeking to achieve (increased sales revenue) and propose ideas for analyzing the root causes of the business problem (for example, analyzing the contributing factors to low sales revenue). Requires multiple solutions or tactics to be implemented. It’s macro (focuses on department, functions or entire enterprise). Source: Robinson, D. G., & Robinson, J. C. (2005). Strategic business partner: Aligning people strategies with business goals. San Francisco: Berrett-Koehler Publishers, Inc. ©SHRM 2009

Transactional, Tactical or Strategic? Sort the following activities into the appropriate work category: Updating an employee’s HR records. Re-assessing and projecting talent needs based on the latest business strategies. Recommending a training class for an employee. Creating a new-hire training curriculum for the sales force. Aligning reward systems across the organization to ensure that they consistently encourage the fulfillment of customer needs. Creating and implementing a new incentive plan for company engineers. Let’s do a quick exercise with real-world examples of each type of work. On a piece of paper, indicate if each activity is transactional, tactical or strategic. Answers: Transactional (Robinson). Strategic (Christensen). Tactical (Jones). ©SHRM 2009

Becoming a Strategic Partner (SP) Build Client Partnerships Identify and Partner on Strategic Projects Influence Business Strategies and Direction through Strategic Engagement How should a strategic HR partner start to engage in strategic work? The Robinson and Robinson (2005) model for progressing to this partnership level is a three-step process. First, you must build client partnerships. Second, you must identify and partner on strategic projects with your clients. In doing those things, you will ideally earn the opportunity to influence business strategy and direction. This is often a process that happens over time. In the next few slides, we’ll discuss the first two steps in greater detail and discuss a case study that illustrates a real-world example. In the next section, we’ll explore strategic engagement. Source: Robinson, D. G., & Robinson, J. C. (2005). Strategic business partner: Aligning people strategies with business goals. San Francisco: Berrett-Koehler Publishers, Inc. ©SHRM 2009

Step One: Build Strategic Client Partnerships Identify client. Identifying the true client can be a challenge. Gain access. Techniques to gain access: Volunteer to serve on high-visibility projects and task teams that are important to the client. When in meetings with the client, ask questions that expand the thinking and discussion of the group. Ask to attend the client’s staff meetings as an observer. Build credibility and trust. Directly relate your depth of knowledge of the HR functions to the “business of the business”. Deliver results with integrity while demonstrating the organization’s values. Read through slide. The true client is an internal leader who can articulate the goals of the business and has ideas about the critical success factors that are key to reaching those goals. Gaining access to the true client is important, since only the true client engages in strategic work. When you have access to the true client, you must prove that you are capable of delivering business results. ©SHRM 2009

Step Two: Identifying and Partnering on Strategic Projects Go for the business and performance SHOULDs G Analyze the business and performance IS A Pin down the CAUSES Factors external to the organization, internal to the organization, and internal to individuals P Select the right SOLUTION S Once you’ve identified the true client and gained access, trust and credibility, it’s time to identify and partner on strategic projects. You may come across strategic projects reactively or proactively. A reactive example is when a client comes to you with a solution in mind and you reframe their request. For example, “What training program will enhance the negotiation skills our sales force?” You need to reframe the request and probe for the business problem. A good question would be, “What leads you to believe the sales people need negotiation skills?” If you have a true strategic business partnership with your client, he or she will hopefully discuss business problems with you and you can proactively engage the client in partnering to find the right solution. A proactive example might be that your client mentions during a staff meeting that he has to reduce employee turnover by 20 percent and asks if you have any suggestions for how it can be done. Whether you come across strategic projects reactively or proactively, Robinson and Robinson (2005) suggest you use the GAPS model to engage the client in strategic thinking and problem-solving before jumping to a solution. (Read slide. See page 98 in Robinson and Robinson for specific examples.) Source: Robinson, D. G., & Robinson, J. C. (2005). Strategic business partner: Aligning people strategies with business goals. San Francisco: Berrett-Koehler Publishers, Inc. ©SHRM 2009

Case Study Part 1 Case study introduction (5 minutes). Role-play activity (15 minutes). Debriefing (5 minutes). Distribute the case study. Case study introduction: Read the introduction aloud to the class and ask the following discussion questions before reading the last paragraph: What should Karen do? Should she continue the discussion and try to build a long-term, strategic partnership with Jacob? Is he the true client? If not, how should she identify and gain access to the true client? Possible responses: Karen should politely end the conversation as soon as possible and thank Jacob for his time and insight. Jacob is not the true client because he doesn’t know the company’s business goals and strategic direction. He will not be able to partner with her for truly strategic projects. Not familiar with leadership levels within the sales department, she should probably consult Thomas, the VP of HR, for his advice. Role-play activity: Students divide into pairs. One assumes the role of the VP of sales, Wendy Harris, and one assumes the role of the SP, Karen Johnson. Teams read through their role summaries and then role-play the meeting between Wendy and Karen. Debriefing questions: What was challenging from Wendy’s point of view? What was challenging from Karen’s point of view? Possible responses: Wendy may find it challenging to pull away from her tactical agenda. She really needs to increase sales revenue and has a solution in mind. She doesn’t want to wait on analysis to explore other interventions. Karen may find it challenging to steer Wendy away from her preconceived solution and persuade her to explore other possibilities. ©SHRM 2009

Break for 10 minutes If you will be presenting this module in three 50-minute classes, this concludes the first class. ©SHRM 2009

Strategic Engagement By the end of this section, you will be able to: Explain the four stages of strategic engagement. Create a roadmap for a strategic engagement. ©SHRM 2009

Influence Business Strategies and Direction through Four Stages of Strategic Engagement Contribute to formation of business strategies and plans Integrate HR strategic plan and initiatives into business plan Implement people initiatives in support of business plan Measure and be accountable for results Recall from the previous lesson (slide 8) that step three in engaging in strategic work is to influence business strategies and direction through strategic engagement. This third and final step is perhaps the most complex and is where the most strategic work occurs. There are four stages in this step-three endeavor. Source: Robinson, D. G., & Robinson, J. C. (2005). Strategic business partner: Aligning people strategies with business goals. San Francisco: Berrett-Koehler Publishers, Inc. ©SHRM 2009

Stage One of Strategic Engagement Contribute to formation of business strategies and plans: Have a deep knowledge of the business. Ask thought-provoking questions. Familiarize yourself with your organization’s strategic planning process. Avoid “HR speak.” Speak with candor. Disagree privately and agree publicly. So let’s assume you’ve: 1) Identified and partnered with top business leaders on multiple strategic projects for multiple business units, and 2) Built access, credibility and trust with top leaders who’ve touted your capabilities in initiatives that have improved performance. The result is that you’re engaging with business unit executives. You attend top-level strategy sessions about where the business is going and proactively listen for opportunities to integrate strategic performance plans into the business plans. For instance, during a strategy session business leaders discuss expanding market share outside of the U.S. The discussion may turn to you as you’re asked, “What is required for us to meet our goals from a performance perspective?” During these types of discussions (Robinson and Robinson, 2005): A deep knowledge of the business is critical. Know the business language of your organization. Resist suggesting immediate solutions. Instead, ask thought-provoking questions. Use the SHOULD-IS-CAUSE logic of the GAPS model: “What business are we in—and what business SHOULD we be in” (Robinson and Robinson, 2005, p. 192). Be familiar with your organization’s strategic planning process. How does your organization go about conducting situational or environmental analyses to create its vision, mission, goals and strategies? Avoid using HR jargon that would be unfamiliar to business leaders. Be courageous and speak with candor. Disagree privately and agree publicly (raise concerns privately when appropriate, but support the team’s final decisions). ©SHRM 2009

Stage Two of Strategic Engagement Integrate HR strategic plans, initiatives and processes into the business plan: Communicate the business plan to HR colleagues. Conduct organization-wide audits to determine readiness. Propose initiatives and solutions that ensure alignment of people with business requirements. Provide the business case for proposed HR solutions. Know the HR staff’s capability so you don’t over-commit and under-deliver. Once a business strategy is formed, SPs must engage in strategic planning as they begin to translate business into performance and workplace requirements (Robinson and Robinson, 2005, p. 198-200). Communicate the business plan to HR colleagues. Conduct organization-wide audits to determine readiness. Propose initiatives and solutions that ensure alignment of people with business requirements: Workforce planning and staffing. Learning and development. Organization development. Performance management. Employee relations. Provide the business case for proposed HR solutions. Know the HR staff’s capability so you don’t over-commit and under-deliver. A new business strategy will undoubtedly affect the major HR functions: ©SHRM 2009

Stage Three of Strategic Engagement Implement people initiatives in support of the business plan and manage the change process: Program manager. Broker of resources. Link between clients and those who are implementing initiatives. Program champion. Successfully executing the plans you made during the second stage of strategic engagement and managing the change process associated with those plans is critical for the SP. Doing so builds your credibility with business executives and HR colleagues, and ensures an ongoing partnership with clients. The SP wears several hats during the implementation phase: Must ensure that the projects associated with the initiative are on schedule and negotiate any major roadblocks. Must be a broker of resources, assigning work to the most appropriate resource (which may or may not reside in HR). Must communicate progress to the clients on a continual basis. Must keep the energy high around the programs for the initiative. These kinds of engagements last over a period of months; consistent momentum is needed. ©SHRM 2009

Stage Four of Strategic Engagement Measure and be accountable for the results: Performance change that is occurring for the employees whose roles are shifting. Results regarding the changes made to the work environment infrastructure and the capability of employees. Results that are occurring in the operational metrics and business goals that were drivers for initiative. SPs must create ways of measuring the results of their work in major areas (Robinson and Robinson, 2005, p. 205): Performance change that is occurring for the employees whose roles are shifting. Results regarding the changes made to the work environment infrastructure and the capability of employees. Results that are occurring in the operational metrics and business goals that were drivers for initiative. ©SHRM 2009

Case Study Part 2 Introduction (5 minutes). Small group work (15 minutes). Debriefing (15 minutes). Introduction: Read the introduction of the case study aloud to the class up to this sentence: “As a result, the CEO asks Thomas, the VP of HR, to attend the next planning meeting to determine the business model and strategy for the organization over the next several years.” Ask students: How should the VP of HR prepare? What skills does he need to participate in the executive team meeting? Possible responses: Thomas should study recent industry publications to see where analysts think the industry is headed in the future. He should also build his competitive awareness so that he understands where other companies in the same industry have gone and where they’re headed. He may also research if the organization has a strategic planning process. Based on his research, he should come to the meeting ready to do the following: Demonstrate his industry awareness and business acumen. Be prepared to relate business issues to HR-related issues. Ask thought-provoking questions. Resist suggesting immediate solutions. Small group work: In groups of 4-5 students, students brainstorm and chart the roadmap Thomas must present to the executive team. An example of a roadmap is provided on the next slide; instructors can distribute it to the students to use as a template. Debriefing: Each group presents its roadmap. The instructor facilitates the debriefing, comparing and contrasting the groups’ roadmaps. ©SHRM 2009

Roadmap Example Communicate the business plan to HR colleagues List your plans for this step Conduct organization-wide audits to determine readiness Propose initiatives and solutions that ensure alignment of people with business requirements List your plans for workforce planning and staffing, learning and development, organization development, performance management, and employee relations Provide the business case for HR solutions that are proposed Know the HR staff’s capability so you don’t over-commit and under-deliver Measure results Instructors may distribute this as a template for students to use to chart their roadmap. ©SHRM 2009

Break for 10 minutes If you will be presenting this module over three 50-minute class periods, this concludes the second class. ©SHRM 2009

Section Three: The Future SP By the end of this section, you will be able to: List the competencies required to become a Strategic Partner (SP). Assess your readiness to be an SP and create an action plan to address your areas for improvement. Summarize the transformation to strategic human resource management. Recognize the barriers to the transformation and develop solutions to overcome them. ©SHRM 2009

Case Study Part 3 Introduction (5 minutes). Small group activity (10 minutes). Introduction: Read the introduction portion of the case study aloud to the class. Small group activity: In groups of 4-5 students, students brainstorm and chart the competencies SPs need to master their role. ©SHRM 2009

Technical Process Competencies Analytical skills Business knowledge Change management skills Facilitation skills HR systems and process knowledge Human performance technology understanding Persuasive skills Project management skills Interviewing skills Relationship-building skills Strategic thinking skills Systemic thinking skills Technological skills ©SHRM 2009

Attributes Behavioral flexibility Objectivity Self-confidence Tolerance for ambiguity ©SHRM 2009

Self-Assessment and Action Planning Consider the competencies and attributes of a Strategic Partner and list five areas for improvement. Create an action plan to address areas for improvement. For 15 minutes, students consider the competencies of a Strategic Partner and list five competencies/attributes that they need to improve on to become a successful SP. Then they create a brief action plan to address each area. ©SHRM 2009

Module Recap Module overview. Barriers to strategic HRM. Overcoming barriers: Need strong HR leadership. Need direct access to client. Need business unit support for new HR mission. Form a change strategy; monitor progress. Get small wins and market them. Communicate, communicate, communicate. The instructor wraps ups the module: Summarize the main concepts of the module. Ask the class what they think the barriers are to engaging in strategic HRM. Ask them how they think those barriers can be overcome. Answers: Need strong HR leadership. Need direct access to client. Need business unit support for new HR mission. Form a change strategy; monitor progress. Get small wins and market them. Communicate, communicate, communicate. ©SHRM 2009

References Christensen, R. (2006). Roadmap to strategic HR: Turning a great idea into a business reality. New York: AMACOM. Robinson, D. G., & Robinson, J. C. (2005). Strategic business partner: Aligning people strategies with business goals. San Francisco: Berrett-Koehler Publishers, Inc. Ulrich, D., & Brockbank, W. (2005). The HR value proposition. Boston: Harvard Business School Press. ©SHRM 2009