Linking HR Strategy with Business Strategy: Optimizing the Impact of HR practices on Business Results | Queen's University IRC

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Linking HR Strategy with Business Strategy: Optimizing the Impact of HR practices on Business Results

Paul Juniper, Jim Harrison
Publication date: February, 2013

We have moved into an era where traditional support services – HR, Finance, IT, Administration, Legal etc. – are under increasing daily pressure to produce a more direct impact on business results. The business rationale for this pressure is easy to understand. Organizations – both public and private – are being pushed by customers, boards of directors, analysts, and investors to do more with the resources they have or - in many cases - do more with less. Deliver more services. Deliver them faster and with more value in more locations. Customize the experience. Gather, analyze and integrate data in a multitude of ways to enhance controls and cross-selling. Provide 24/7 access. Allow flexible work hours. Provide life-long learning and work-life balance. Move everything online – and make it accessible everywhere, with full privacy and security.

You get the picture. And we well imagine that if you are reading this article you are – in many ways – living that picture.

To be taken seriously as HR professionals, we need to be relevant to our audience. To be relevant to the organizational leaders and C-Suite executives we serve, we need to understand and adopt the goals and objectives of the organization and make them our goals and objectives. To do this requires that we directly link our HR strategies to the strategies – and ultimately the success – of the business we are serving.

A strategy is an articulated plan that enables an organization to make optimum use of its people, resources and investments in order to achieve its goals and objectives. In this article we offer a small taste of what it means for HR practitioners to connect their HR strategies to those of the business leaders they serve. These ideas, mindsets, and skills are explored and expanded upon in a hands-on, interactive programs offered by Queen's IRC called Linking HR Strategy with Business Strategy.

Where do you start if you are an HR practitioner who wants a relevant and impactful relationship with the leaders of your business or organization? We offer the following actions you can take to start to build those relationships and begin the journey.

1. Understand the goals and objectives of the business – and make them your own

To be relevant we must understand what our business colleagues are working to achieve and the strategies they are employing to achieve them. Read their documented strategies, mark them up, ask clarifying and challenging questions, and discuss the objectives and strategies with your HR team. Most business leaders love to talk about their businesses. Where possible, set up a monthly meeting to go through the strategy and the needs of the business unit. If you are embedded within the unit, analyze their plans and results, attend all the meetings and invite team members to coffee or lunch to soak yourself in what they are trying to accomplish and how you can help.

One challenge you may face is that your organization may not have a written strategy. If that is the case, then use the business ideas below to piece together those areas of strategic focus that will help you to create a deliver a relevant HR strategy. Every organization operates to some strategy, whether they state it or not. Sometimes our job as HR professionals requires that we figure out what that strategy is before we are able to serve it.

2. See your HR practices through a business lens.

Lens #1: The first lens focuses on key business drivers. As you work to understand and digest the goals and strategies of the business, remember that business goals can usually be directly connected to one of three primary objectives: revenue growth, cost control, or risk management.

By starting with these primary objectives, you can then trace back the HR practice you are recommending through the value chain to show how it directly impacts that objective. Let's use the example of recruitment and how it might impact a growing sales force. The primary objective of a talented sales force is revenue growth. Our experience shows that a structured recruiting process that combines the candidate's previous sales results with scenario testing and experienced-based interviewing, when conducted in partnership between HR and the sales leader, dramatically improves the sales success of new recruits and helps to drive faster revenue growth. In discussing HR practices, work to tie your story or recommendation back to one – or more – of the three primary objectives – revenue, cost or risk.

Lens #2: The second lens for HR professionals to look through is how a customer's needs and how they make decisions are impacted by the business's value proposition. To attract and keep customers, successful businesses create a value proposition designed to satisfy their targeted customers, deliver outstanding value, build loyalty and differentiate the business from its competitors. It is your job as an HR professional to enhance that value proposition with relevant and focused HR practices. For example, in a sales or service organization, compensation plans and training and development programs need to be tailored to specifically build the motivation, skills, knowledge and confidence of the front sales and service staff. In this way, the investment in HR practices can help those staff members execute the value proposition in a way that creates a unique and positive customer experience.

The leading HR expert Dave Ulrich says this is one of the fundamental mindsets that drives the impact of HR practices in specific organizations; that HR professionals must learn to look at the business from "the outside in"; that we must start with the point-of view of our customer's customer and how those customers make decisions if we want to have a meaningful dialogue with our customers, the leaders of the business.

3. Make the connection: Link HR strategy and practices to business results

Once you understand the goals, objectives and strategy you can work to directly link everything you do to the success of the business. You build your strategy and execute your practices to serve the overall goals of the organization. This is true in commercial, union and public sector organizations. There are sound strategic reasons why the top organizations in the world execute a suite of progressive HR practices, including performance management systems, learning plans, organizational design, change management programs, and employee feedback and engagement initiatives. When they are well designed and professionally delivered, these programs enhance the overall value proposition of the organization and provide a key piston in the engine that drives success.

4. Talk their language: Numbers are the language of business

One of the biggest complaints we hear from business leaders about their HR support teams is that HR practices are rarely discussed in the same financial or numerical manner that other business decisions are discussed. If you want to be relevant with business leaders and C-suite executives, you have to speak their language and their language is numbers: numbers are the language of business.

Numbers come in two forms when looking at business decisions. The first and most obvious one is dollars and cents, the financial impact. Value is measured and decisions are driven by the financial impact that an investment or program can have on a business. We will acknowledge that for many HR practices it is hard to calculate a specific dollar benefit, but we have to at least show estimates and potential impact. Most executives are not draconian about needing a business case for all HR initiatives. They understand that the building of a strong, knowledgeable, informed staff is a key strategic need for success. But our willingness to at least estimate or wrestle with the financial impact of a program shows them that we understand what they wrestle with in making investment decisions; it places us on their side of the table in looking at the best use of the organization's limited financial resources.

The other numbers you must be familiar with are activity and satisfaction surveys, and operational and change measurements. If your firm runs a balanced scorecard that identifies customer satisfaction, financial results, operational processes and change or learning initiatives, then take the time to study in depth how these numbers (or scores) are derived, how they link to the value proposition, and how the executives who run the business units are shaping their strategies to achieve top scores and thus strengthen the long term sustainability of the business. HR practices can directly influence the majority of the scores that make up a balanced scorecard. But to have an "informed" discussion about how the business units can best take advantage of those practices, you have to understand these numbers and how to impact them.

5. Who do you show up as?

Finally, ask yourself: "Who do I show up as?" for conversations with my organizations leaders. Do you show up as a well-informed business professional who is deeply immersed in their strategy and value proposition? Do you show up as someone who understands how your customers make decisions, and who is willing to have in-depth discussions about the measures of their success? Do you show up as a professional who can help them implement change in a way that maximizes effectiveness and minimizes risk?

For HR professionals, the challenge is to show up with compelling arguments to business leaders that show the positive impact of HR practices and programs on the results of the business or organization. But in order to make those compelling arguments and have a positive impact as HR professionals, we need to directly link our HR strategies and practices to the strategies of the business.

To be invited to the table, our programs need to have impact. To be invited back, we need to establish ourselves as trusted partners who understand the issues, can speak the language and can deliver practices and programs that have a direct and sustained impact on everyone's success. It is an exciting challenge for all HR professionals, to be a key player in the work to grow and sustain a business, union or public sector organization. And the time has arrived when we all have to rise up to meet that challenge.

 

About the Authors

Paul Juniper, Director, Queen's IRC
Paul Juniper
Paul Juniper

Paul Juniper became the sixth Director of the Queen's Industrial Relations Centre (IRC) in 2006. Paul is a leading and respected figure in Canada's HR community, with over 30 years of experience in human resources and association leadership.

Paul is particularly sought for his views on the future of the human resources profession. He speaks regularly at national and international conferences on trends in human resources, and the ways in which individuals and their organizations can continue to raise the bar on HR. Paul developed and designed the IRC's Advanced HR programming to meet the increasingly complex professional development needs of HR practitioners. His research focuses on the state of the HR profession both in Canada and around the globe.

Paul is currently a member of the Advisory Board for the Banff Centre for Leadership. He is also a member of the Board of Directors for the Global Organization Design Society. Throughout his distinguished career, Paul has served as Vice-President of Human Resources for national and international companies, and also managed a Toronto-based consultancy, focusing on strategic planning and recruitment. Paul was an interim CEO of the Human Resources Professionals Association of Ontario (now known as HRPA), President of its Board, and was instrumental in the adoption of a degree requirement for certification in human resources. He is a former member of the Board of Directors of the Canadian Council of HR Associations, and sat on its Independent Board of Examiners for many years. In addition, he has taught in both college and university environments, including the Strategic HR Planning course for York University in Toronto.

Jim Harrison, Queen's IRC Facilitator
Jim Harrison
Jim Harrison

Jim Harrison is an international consultant focused on relationship management, senior level strategy, and business development skills for large organizations. He has a background in financial services and professional writing, and has more than 18 years experience in consulting, training, and development. He teaches in North America, Europe, the U.K., Australia, and Asia, and has facilitated training programs for Manulife, Clarica, Deutsche Bank, HSBC, and Bank of Nova Scotia. He designed and delivered a sales and negotiating program for Group Insurance Representatives that supported significant increases in business for a major group life insurance supplier.

In recent years, Jim has focused predominantly on helping senior sales executives understand, plan for, and build trusted advisor relationships with senior business executives. There are specific requirements of building relationships in the "C-Suite" and Jim has chosen to refine his knowledge in helping others to succeed in this realm.

Through his continuing work with Accenture, Agfa, Deutsche Bank, and IBM, Jim has developed the expertise and focused tools to help account teams land large dollar contracts and to build meaningful long-term relationships. Jim has also helped structure and deliver strategic partnering workshops with long-term clients.

Jim received his B.Sc. in Finance from Florida State University and Masters Degree in English from University of California, Irvine. In addition, Jim has won the Canadian Junior Golf Championship and the Ontario Amateur Golf Championship.