Some years ago, I was privileged to be invited to give a talk on what does “Strategic HR” looks like, to a group of MBA students. The students who are on a “part-time” program are full-time working professionals . During the preparation for the session, I was wondering what about HR to cover that would be of interest to the students. After much deliberation and numerous drafts, I decided to share on the process of developing a HR strategy (the differences in scope for Global, Regional and Country strategies), the linkage of HR strategies to Organizational and Business strategies, how HR strategies are supported by the various HR functions (holistic HR), growing the HR function (and leadership), and close by sharing some common challenges that HR functions encounter (to be strategic). When we started the session, I thought we’d begin by getting some participation (and minds working) by posing a question to the group. As the students were from a mixed range of organizations (from multi-nationals to small and medium sized organizations-SMEs), I thought that it would have been a good platform to get them to share “adjectives” that would concisely describe their own HR “experience” at the work-place. Initially, they were “restrained”, but after much prompting, a few started sharing, and soon, they were very open with their experiences. The adjectives that they used were not positive nor flattering about their HR functions. In someway, I was not surprised, as these were similar to unsolicited feedback that I have heard from different groups of professionals. In general, they describe HR as purely “administrative”, “police like”, and that they were not at all satisfied with the level of HR services, communication or support. Another feeling that I came away from this short exercise, was a general feeling that they may also not have a basic (thorough) understanding of their HR function’s roles, functions and projects. It was a somewhat helpful start as it supported several points that I was going to make later, on the “challenges” that some HR functions may encounter, and how some organizations view HR. In this post, I would like to highlight a topic that I covered in the session; and that is about the fact that HR function has to “grow” or go through “growing” phases. When a young organization starts out as an SME or a global company that is starting an “office” in a region, it makes tremendous sense to start small. There needs to be a time of embryonic growth, where “seed” teams are small and allowed to develop. Here, the HR function start out as being administrative (ensuring that all legislation and governance are adhered to, draft people related policies; provide essential services of recruitment, induction, payroll, and where appropriate; separation). Over time, when the business expands and work volume increases, most teams (sales, operations, manufacturing, etc.) would have to grow. The structure of the organization inevitably becomes more complex. With this, the nature of the organization changes, the HR service needs would transition from focusing on the administrative to being operationally effective (excellent). With this, the HR function should “grow” accordingly to support the organization and business by the installation of more (in numbers and later quality) professional functions (beyond basic recruitment and administration). Some examples would be functions like, learning and development (to strengthen staff competencies and the organization’s knowledge inventory), Compensation and Benefits (for surveys, benchmarking, reward programs and installing appropriate compensation-structures), Employee relations (to create channels of communication with staff and to sense the organization’s “pulse”), Organization Development (to work on Culture programs, change management, M&A integration for people), HR Information Systems (to collect staff information, facilitate efficient reporting and trend analysis of metrics) and most importantly, staffing these functions with talents with the relevant competencies (and ideally for future needs). At this phase, the HR function should grow from being effective operationally to being “HR Business Analysts” to partner with the businesses to provide for programs that will grow high performance teams and enhance a high level of competitiveness. I cannot emphasize enough
that being a “business partner” administratively, and for operational support is very different from being a true “HR Business Analyst” partner. To be a proficient “HR Business Analyst”- type partner requires a very different set of skills and mind-set . This is where the proverbial “tyre touches the ground”, where HR effectively becomes a “consultant” who “enables” the businesses and organizations to “truly engage” into the higher gears and gain competitive edge through people……. the most important resource! The ultimate stage for the HR function to grow into would be one where the function is also effective at playing strategic roles. To get to this stage or phase, the function would need to have strong administrators (and policy implementors), experienced “HR Business consultants” (not HR who are called “partners”…. but whose focus is dedicated HR administration and basic operational support to a particular corporate or business division) who are in a sense truly HR business representatives. With these as foundations, HR would then have the information, knowledge of the businesses and the organization, and combined with broad HR experience and expertise to be visionary and to develop future-oriented HR strategies. With these capabilities, the organization will then be able to move from being a market leader to a market change agent. This is where all the organization's “engine-pistons” are all firing at the same time, and where the businesses have empowered “people resources”, where innovation can permeate the organization, where the Brand promise “blooms”! To be able to develop the HR function to this level, HR leadership, becomes extremely critical. It is very important to differentiate HR leaders with their respective competencies. As we have mentioned earlier, the perquisites (the skill-sets, competencies, experience, personal-profile and mind-set) for leading HR function at the different stages (start-up type functions, basic and broader HR operations, “HR business-analyst” partner, “HR-business type” consultant and the truly “strategic” ) are varied and very different. Throw in the additional variable of regional expertise and experience, and we have a very broad range of different HR profiles that needs to be looked at to get the right match for the HR role. Getting back to the HR growth phases, I do believe that at the initial start-up phase, it is appropriate and prudent to start with a HR manager and a handful of administration to cover the essentials of legislation and administration (with small teams, it is not uncommon that everyone has to multi-task and have multiple roles). Over time, when the organization grows into the next phases, and there will be a creeping and urgent need for a broader range of in-depth HR competencies for support. With the addition of more functions (business and HR teams), a more complex organization, increased talented staff, more geographic range; the HR leadership roles needs to filled with experience and competencies that go beyond the initial installation, operations support and maintenance type of expertise. There will be the need for a more strategically inclined and business minded type to fill the HR leadership role. In the “challenges” that I shared with the group, I mentioned that some organizations may forget to “grow” the HR functions and the related competency and capabilities needs. The HR functions are “frozen” at a particular stage for a variety of reasons. Such organizations may also want HR leadership to be “operational” and at the same time “strategic”. I am not sure if such a combination works (on a long term basis), it’s analogous to having a CEO be actively running the day-to-day activities of every function within the organization and yet be able to “rise above the muck” to be strategic (if ever there’s time left for thinking!). How effective will that be? Having said that, I believe that the kind of HR team and leadership needs depends on where the organization is on “development or growth continuum” (this will be a challenge to identify as organizations go through change and growth on an ongoing and some on a “creeping” basis). However, over time, it is essential that organizations regularly review their HR needs, and those with fore-sight and business smarts will invest to recruit a strategic, experienced and competent HR talent who can lead the organization through the phases of change. For those who are more short-termed, going for anything less would short-change the leadership team and ultimately be putting the organization’s growth at risk. In my opinion, it is when most companies are overly conservative with their budgets and hiring that they do not grow the HR functions fast enough or hire strong HR leadership talent. Ultimately, the organization is made up of talented people, and it only makes good sense to get the best talents (with experience and exposure) to lead the HR function to gear-up the business and organization to the next level of growth. The cost for not doing this, could result in poor retention (all the best talents will go to the competitors), poor attraction (talents want a positive and nurturing working environment that they can engage in), the brand promise will be difficult (if not impossible) to achieve and these will ultimately have bottom and top-line impact on the rate of growth of the organization and it’s businesses. It seemed from the initial responses of the students, that their companies may (unknowingly) be keeping their HR functions at the administrative level (some at the basic operational level) and “hoping” that that would be enough, and some even “expect” (unfairly or foolishly) to derive strategic and growth direction and capabilities from the same group. In summary, I shared with the group that if they have not had experienced HR in the way I have described (with their initial feedback, it is clear that they have not), they should consider taking my examples as “ideal” situations HR should strive for and be capable of. My encouragement to them was that as they are potential leaders of their organizations (some already are), they might now have a different perspective, and that they can make the case for the right changes to ensure that their businesses and organizations get the competitive edge from their people talents.