When I saw the line “HR struggles with Strategy” in a recently published white paper by a reputed firm, my immediate thought was, “Why?” The paper also opined that 83% of HR teams are Reactors or Partners, and not Anticipators ( Anticipators lead a strong talent strategy, use analytics and data to predict talent gaps and provide insights about how talent quality relates to business goals ). I’ll be glad to share the paper with those who wish to read it.
Why does HR struggle with strategy? This paper is an attempt to help HR decode strategy and leave HR Practitioners with some simple steps to execute them well.
What is Strategy?
Michael Porter says, “Strategy is creating fit among a company’s activities. The success of a strategy depends on doing many things well – not just a few – and integrating among them. If there is no fit among activities, there is no distinctive strategy and little sustainability.”
Ireland, Hoskisson and Hitt say, Strategy is an integrated and coordinated set of commitments and actions that exploit core competency and deliver competitive advantage.
If you carefully read both definitions, you will notice the similarities:
- Creating fit among a company’s activities = Set of commitments and actions
- Doing many things well = Core competence
- Integrating among them = Integrated and coordinated
- Sustainability = competitive advantage.
Some questions that HR should ask themselves,
- What is our organizations’ core competence?
- How do we enable and support it?
- What actions do we need to take to develop that competence within ourselves as HR?
It is also very important to understand that doing routine activities more efficiently, at a lower cost, with less errors, is operational excellence. Operational excellence, while beneficial and necessary in every organization, is neither strategy nor core competency.
What can HR do to strategise and execute successfully?
Integrate and Coordinate
It is important to ensure that the activities chosen are well integrated and coordinated with both the company’s overall purpose, mission and strategy and also with the other functional – Marketing, Sales, Production – strategies and initiatives. It should also be aligned with developing the core competency.
Commit and Act
Once the strategy is clear, and the identified activities are designed to integrate and coordinate with it while developing core competency, it is critical that HR establishes its own commitment ( HR vision/mission statement) to it. This step is critical to ensure that all team members in HR are aligned from within. It is also critical that all procedures and work routines are established to ensure that the action is aligned with the stated commitment.
Deliver Sustainability and Competitive advantage
Once actions have been taken, HR should establish its own evaluation criteria and monitoring mechanism to ensure that their activities are delivering value to the organization, in other words, “creating fit among a company’s activities”. It is imperative that the company also develops feedback mechanisms and ensures that lessons learnt are shared within the organization.
Periodically, review your strategy, and ask yourself, “Is my strategy working for my organization? Is it delivering sustainable competitive advantage?” If it is, then many congratulations to you. If it is not, the next question is, “What amongst the above is not working for you?”
When all of the above are done consistently, achieving sustainable competitive advantage aka success is a natural result.
The Final Piece of the Jigsaw Puzzle
Peter Drucker says, “Only three things happen naturally in organizations, friction, confusion and underperformance. Everything else requires Leadership”.
To make the strategy work, to execute flawlessly, to evaluate and monitor effectively, to learn from successes and failures, to consistently achieve sustainable competitive advantage, requires Leadership. So Go, Lead!
Shridhar Sampath is the Founder and CEO of Motivaluate Consulting & Training FZ LLC, a company that offers a unique combination of business and financial consultancy services. He is an expert on Leadership, Strategy and Finance and speaks at various conferences and forums on related topics. Shridhar has a CPA from the USA and a CA from India. He is a Certified Master of the Leadership Challenge & Student Leadership Challenge and a Certified facilitator of the Capsim Business Simulation. He is also a facilitator for Duke Corporate Education as a member of their Global Learning Resource Network and adjunct faculty at the SP Jain Global school of Management. Shridhar can be contacted on firstname.lastname@example.org