Seizing the strategic role

first_imgHRhas long suffered from problems in selling the value of its services to theboard. But the time has come for senior members to press its case for taking aleading role in company strategy. Nic Paton reports TheHoly Grail of HR has long been how to translate business priorities intoeffective people management strategies. Yet, for many HR professionals, thereality is often sadly different from the aspiration. Too often managers willdismiss HR as a personnel function that simply hires and fires and makes thepay cheques arrive on time, but is not to be trusted with the really bigstrategic stuff.Asurvey last year by management consultants PricewaterhouseCoopers found seniorHR professionals in fewer than one in five companies were satisfied with theimpact they were having on their business. And only 32 per cent had secured aseat on the main board. But slowly, as businesses realise their people areoften the final competitive advantage they have, the notion that senior HRprofessionals can work with businesses and actually become valuable board-levelpartners is starting to catch on.PaulTurner, general manager of West Bromwich Building Society’s people developmentdivision, is one such partner. A finalist in last year’s Personnel TodayAwards, Turner has worked in partnership with chief executive Andrew Messengerto ensure a seamless flow of HR policy from board to department level. This hasincluded putting a targeted selection process in place, benchmarking resultsagainst the rest of the industry and carrying out substantial internal changes.”Inthe past, HR has been at the back end, thought of after the business plan hasbeen developed. But it is critical today that the HR function aspect isconsidered right at the beginning,” he says.Turnerasserts that if HR professionals want to get involved in strategic and businessplanning, they need to have credibility. And to have that, they need to be ableto speak the language of business. “If you’re talking about absenteeismgoing down by 25 per cent, tell them you have saved 800 man days this year, ormore than £100,000, or whatever it is,” he says. “If you are lookingat good people practices, you need to say how managers are achieving in terms ofsales and productivity.”Whenthe HR director becomes a partner, the respective roles of line and HR inmanaging and developing people should, ideally, be seamless, adds MartinBurridge, senior lecturer in international business at Henley ManagementCollege. “There are some companies that do not need an HR department, allthey need is an HR director, somebody who has a real stake in thebusiness,” he says. “HR needs to be in every department. It is therole of the manager to manage resources. If a manager is not managing theirmost important asset, what are they doing?”But,again, the reality is often sadly different, says Linda Holbeche, director ofresearch at Roffey Park Management Institute. “What tends to happen is thebusiness strategy is set by the business partners and HR is very much a supportfunction set short-term targets, usually recruitment, to service those businessroles. The board may have HR in such a box that it never manages to breakout,” she says.Translatingbusiness priorities into effective people management strategies requires”HR with attitude”, she suggests. First of all, “don’t cockup”  This may seem obvious but, ifHR has always been seen as a purely administrative function in an organisationand yet the HR director can’t even get that right, there is really no hope ofprogressing further.Oncethe core function is running smoothly, HR professionals should be looking athow they can help their organisation secure competitive advantage. “HR isnot just about disappearing into the night to the ivory tower. It is aboutdelivering specific needs, challenging, cajoling and having a framework.Short-term initiatives build up to give a bigger picture. It is aboutunderstanding the nature of the work and the nature of the people,” shesays.Forinstance, say an organisation wants to go for growth over the next three years,she argues. For the HR director it is not just about ensuring, in the shortterm, that the company has the right level of staffing to achieve this, butinterpreting what the business strategy is about and how the tools that HR hascan help. This might mean asking what type of business the organisation isbecoming and what sort of people or processes it is likely to need in two orthree years. Is it, for instance, becoming a global player, and, if so, whatsort of mindset is it looking to develop?Yet,however talented an HR director is, if the board does not want to listen, itwon’t. And, if line managers below do not buy into an HR strategy, gettinganything done may prove well nigh impossible. Advocacy, then, is a key elementin developing as a business partner, argues Holbeche. “You have got tohave line managers champion it.”Inhis book The Bottom Line HR Function, published last autumn, Paul Kearns, asenior partner at HR management consultancy Personnel Works, suggests the HRfunction can be divided into a scale of effectiveness. This rises from welfareand personnel administration at the bottom to internal consultant, businesspartner and organisation designer at the top.TheHR role is primarily stuck at the lower end of the scale, he argues, hamperednot only by managers’ failure to understand what HR can offer, but also by HRprofessionals not being assertive enough and not having enough authority. Evenif management started to accept HR directors as partners, too few HRprofessionals would have the necessary business qualifications to get there, hesays.”Thereis a serious shortage of people in the HR world, at the moment, with thenecessary skills to fulfil this role. This will seriously hamper the HRMprofession’s attempts to operate at a truly strategic level,” he says.Withcompanies becoming more international in outlook and the pace of mergers andacquisitions ever increasing, cutting it at board level means not just havingexcellent HR skills but acquiring business, financial and marketing acumen,argues Francis Wilson, international manager at the CIPD. Astudy last year by KPMG showed that while 80 per cent of senior executivesthought a merger or acquisition had provided shareholder value, in fact in 83per cent of cases it had failed to yield any benefit at all, largely because”the people factor” had been ignored.”Alot of the pointers can come from HR. It can offer cohesion and provide thecorporate glue. Being a business partner is about putting the business first,but with people at the centre,” says Wilson. ManyHR professionals, even now, are locked into a jargon-riddled”HR-alone” mentality that makes chief executives reluctant to letthem loose higher in their organisations, argues John Nicholson, chairman ofbusiness psychology consultancy Nicholson McBride. “Insome respects, HR people are their own worst enemies. Thirty years ago you didnot even have finance directors on the main board, they were just beancounters. HR people have to convince themselves first,” he says.Butthat’s not to say it can’t happen. HR directors can become valuable partners –if they can back their words with clear, tangible results, insists WestBromwich’s Turner. “Managers have a fear that HR will interfere and willstop them doing things,” he says. “Once they understand that HR willmake their life a lot easier and help them get to the place they want to get toquicker, well, you only have to prove it once. After that they will come toyou.”Seaton the board led to better staff retentionWhenDr Barry Winter was appointed as board-level director of personnel anddevelopment at public relations firm Countrywide Porter Novelli six years ago,it was a groundbreaking move.”Ibelieve it was the first board-level HR appointment in an industry that hasquite a revolving door mentality,” he says.DrWinter, who trained as an occupational psychologist before becoming a PRconsultant and has an MBA, immediately set about reshaping Countrywide’s HRfunction, which had previously been very much one of administration andmaintenance. Heoverhauled selection processes, bringing in, among other things, psychometrictesting, to improve short-term retention. “Our retention rate is now 20percentage points above that of the industry average,” he says. He alsoimplemented a policy of coaching, feedback and management training for allaccount managers, while exit interviews were made a standard procedure.Thekey to adding value and expanding your influence, he argues, lies in buildingup credibility and in having a cogent grasp of where the business is going.When it came to credibility, he ensured – in an industry where awards areconsidered important – that Countrywide won a number of prestigious gongs,including the Public Relations Consultants Association’s training anddevelopment award twice in the past three years.DrWinter and other key team members also handle fee work with clients, so theyare not seen as just sitting in an “HR ivory tower”. The team itselfalso deliberately includes people from a client-handling background to give asbroad an outlook as possible.TheMBA helped Dr Winter to attune to business priorities, but his key belief isthat strategy should mean implementation. “You need to get some form ofbusiness experience behind you. It is no good if you get to the top and you aresitting there talking about the latest fad or fashion when you need to befocused on the business. You need to find out what is really important to theindustry,” he says.Evenwhen management is behind you, becoming a valued business partner does nothappen overnight, he warns. “The first two years are difficult. You arenot going to walk in there and immediately have credibility. You have to earnrespect.”Ihad two or three key members of the board who believed in it and stuck with it.You need to have someone who will champion your role.” Comments are closed. 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