What a HR needs to know and do about Business Strategy?

What a HR manager needs to know and do about Business Strategy?

Traditionally Human Resource is viewed primarily as an administrative function. But things are not the same in the current environment. While the administration of these activities is still important to business, HR Management is not seen as helpful in delivering upon business strategy. The HR Head is increasingly required to act as both strategist and steward, who orchestrates day-to-day HR operations and participates in overall business strategy.

Good news is that the transition has already started. Many HR leaders have recognized the need for this change and have acquired skills and amended their structures. But the focus has been on how HR strategy collaborates or supports overall strategy, how HR strengths of the organization can be used to attract talent and gain market share, etc.

But the story at the grass root level is very different. Mid-level HR managers see their administrative role more prominent and value-adding then the strategic aspect. How many HR mid-managers would be able to talk about what the strategies that their business partners are adapting and why? Not many.

A survey attempting to understand how organizations view business strategy suggests that HR as a whole have big leading role to play in it. This survey suggests that ‘Only 5% of the workforce understands the business strategy, only 25% of managers have incentives linked to strategy and 85% of executive teams spend less than one hour per month discussing business strategy.

While formation of business strategy itself may be the responsibility of Business Leader, HR should lead the deployment of business strategy by aligning people to the strategy, facilitating how tactics are evolved from strategy and how performance is measured and reported against targets.

All this suggests is that HR managers should play a leading role in deploying strategy rather than being participative.

If you are in HR, here are things you can do differently:

  • HR to play a lead role in defining the strategy
  • Lead role in Annual Business Planning Process
  • Collaborate in defining ‘Success Measure’ for each strategy
  • Audit the links between Business Strategy to Individual Performance Goals
  • Take ownership in resolving accountability issues between different stakeholders in the organization
  • Facilitate Culture of Empowerment which is required for executing strategies
  • Create an environment of predictable performance as a result of all the above

Hoshin Planning process adopted by many leading corporations puts HR in the forefront for driving business strategy. Hence a good appreciation of Hoshin Planning process will help you if you are in for a long career in HR.

Take a quick self-assessment to validate the role your peers in HR play in Business Strategy deployment.

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