So You Want To Be Strategic – What Next?

Which of These is True? “The next ten years will be the HR decade.” Professor Dave Ulrich, University of Michigan “I am describing your human resources department and have a modest proposal. Why not blow it up?” Tom Stewart, editor Fortune Magazine

The (REAL) Question??? How can HR professionals produce significant value and deliver results???

THE ANSWER

BE A STRATEGIC PARTNER

ON BEING A “STRATEGIC PARTNER” Only 34% of HR Executives Are Viewed As “Strategic Partners” Source: SHRM/BSCol Survey, 2002

HR Competency Domains Personal Credibility Strategic Contribution HR Delivery Business Knowledge HR Technology

HR Competency Domains Strategic Contribution 43% Personal Credibility 23% HR Delivery 18% Business Knowledge 11% HR Technology 5%

WHAT IS STRTEGY? Strategy is about how we compete. Strategy is about creating value. Strategy is about making choices. Strategy is the allocation of scarce resources.

Three Easy Steps to Strategic Partnership 1. THINK 2. PLAN 3. ACT

THREE ELEMENTS OF STRATEGY 1. STRATEGIC THINKING (Formulation) 2. STRATEGIC PLANNING (Development) 3. STRATEGIC ACTION (Implementation)

STRATEGIC THINKING (Formulation) – step #1 What is “Strategic Thinking”? How do you get it? How do you let others know you have it?

NO ONE “ANNOINTS” YOU AS STRATEGIC Being strategic is not what we do … It’s how we process information Being strategic is not about having the right answers … It’s about asking the appropriate questions

CONSIDER THE FOLLOWING: “A fool and his gold are soon parted” First, process the information Then, frame a question that you would ask about the statement

CONSIDER THE FOLLOWING: “Your company’s key, intellectual talent will be in extremely short supply in five years, jeopardizing your company’s future” First, process the information Then, frame the questions that you would ask about the statement

STRATEGIC PLANNING (Development) – step #2 ASKING THE RIGHT QUESTIONS

KEY STRATEGIC QUESTIONS Where is the company now? Where does the company want to go? How will the company get there?

STRATEGIC QUESTIONS What business are we in? What’s going on in the world in which we do business? What business should we be in? What are our resources? What are our core competencies? Who are our competitors? How will we compete?

STRATEGIC CHOICE HOW WE WILL COMPETE? 1. Differentiation 2. Low cost provider 3. Customer Intimacy 4. Innovation

STRATEGIC CHOICE Differentiation Cost of doing business High Low High Low

STRATEGIC ACTION (Implementation) – step #3 “Operational Effectiveness”

Operational Effectiveness: A process in which the discrete activities of the organization are aligned in a way which maximizes the capabilities of the organization to achieve competitive advantage.

What is the appropriate role of Human Resources in achieving competitive advantage?

Visioning Strategic Planning Operational Effectiveness Competitive Advantage

Sources of Competitive Advantage Economic/Financial Capability Strategic/Marketing Capability Technological Capability

Sources of Competitive Advantage Economic/Financial Capability Strategic/Marketing Capability Technological Capability Organizational Capability

Organizational Capability “Organizational capability is a business’s ability to establish internal structures and processes that influence its members to create organization-specific competencies and thus enable the business to adapt to changing customer and strategic needs.” Source: Organizational Capability: Ulrich & Lake

Nordstrom’s – A Strategic HR Plan You are the VP of Human Resources for Nordstrom’s Department Stores. Your CEO has just briefed you and other senior staff on Nordstrom’s strategic decision to compete based on differentiation; the differentiator being “superior, world class customer service.” Your assignment is to align the organization’s human resource practices to support this new strategy. Please address the following questions: 1. What are HR practices that need to be considered? 2. What are the changes that you would make to those practices? 3. How would you proceed to implement the necessary changes?

Becoming Strategic Define your job Be competent Know “business” Ask the right questions Practice ThinkPlan Act

Business Literacy Information Technology Marketing Finance and Accounting ???

Sources Books, magazines, internet Teaming with other executives Courses, seminars, conferences Job rotation

Strategic Assignments 1. Present a summary of a new trend/technique to others. 2. Write a proposal for a new system, product, procedure. 3. Spend a week with customers; write a report. 4. Do a competitive analysis. 5. Write a speech for someone higher in the organization. 6. Write up a policy statement. 7. Study customer needs. 8. Do a postmortem on a failed project. 9. Do a problem-prevention analysis. 10. Study innovation among customers/competitors. 11. Interview outsiders on their view of the organization. 12. Evaluate the impact of training. 13. Construct a success/derailment profile. 14. Write up a contingency scenario. 15. Work on affirmative-action planning.

Practice Being Strategic

Five Strategic Partnership Activities 1. Sit in on budget meetings and annual planning meetings for departments outside of HR. 2. Form a business book club for the executives in your organization. 3. Find a mentor (outside of HR) two grade levels above your own. 4. Write a job description for the job you want to have in five years and discuss with your boss how to get there. 5. Review your organization’s strategic planning process and recommend appropriate changes.

Wall Street Journal Vice President, Human Resources Global Fortune 500 Company of 30,000 employees, the leader in its field, is seeking a Corporate Vice President of Human Resources with a strong background and focus in organization effectiveness, development and training. “Partnering” with corporate senior management and business sector heads to bring forth a new business culture, the VP will establish HR as a strategically focused internal consulting arm to the company. The successful candidate will have a businessperson’s perspective and a demonstrated track record in change management, re- engineering, leadership development and training. Respond to: M-67, P. O. Box 17182, Philadelphia, PA EOE.

Suggested Readings Dave Ulrich, Human Resource Champions. Harvard Business School Press, 1997 Michael E. Porter. Competitive Advantage. The Free Press, 1985 Dave Ulrich & Dale Lake. Organizational Capability. John Wiley and Sons, Inc., 1990 Becker, Huselid and Ulrich. The HR Scorecard. Harvard Business School Press, 2001 Jim Collins. Good to Great. HarperCollins Publishers, Inc., 2001

“Ships may be safe in the harbor, but that’s not what ships are built for.”

Thank You