The economic downturn has provided a real life case study of Strategic HR management or mismanagement. For a long time I have been saying that if HR wants to be regarded as a real strategic player, then they have to be willing to take accountability for the achievement of the organisational goals. As an example, if Company X wants to achieve a 20% top-line growth for the next 3 years, HR should be held accountable for x% of that 20% growth figure. The HR solutions that they provide should be measurable to the extent that they can show they have or have not contributed their fair share.

Likewise Human Resources should also be partly accountable for not achieving the organisational goals ~ you can’t be a strategic player, then in the bad times absolve yourself of your obligations to help achieve the company goals and return to being the “shoulder to cry on” for all the retrenched employees. If companies are retrenching because of the economic downturn, who’s fault is it? To blame the economy is a cop-out and simply too easy for HR.

An effective strategic HR department would have been regularly monitoring and doing scenario planning  with regards to their strategic workforce plans. This strategic activity would have highlighted the possibility of excess staff in the forthcoming months. Out of the scenario plans, HR solutions would have then been produced to support the likely scenarios. These could have been practical plans like reducing non critical skill recruitment, active skill redevelopment of resources that you would not want to leave the organisation, preparation of the organisation for a slowdown, early retirement options, flexible work arrangements. 

Being proactive to possible scenarios is what makes HR a value adding department and will certainly breed trust and support by line management and executives. Being reactive and thinking that your role is to execute the retrenchment policy and procedure is not value adding and is a sign of misunderstanding what it means to be a strategic HR department.

So is HR to blame for retrenchments in this economic downturn? – absolutely if they consider themselves a Strategic HR department.

[Rob Scott writes] – I attended a dinner function in the last week with a couple of colleagues. During the evening we got onto discussing my favorite subject ~ HR strategy, and were having a debate about the usefulness of HR departments. The chap I was chatting to was in a typical mid-management line function and was complaining about the lack of HR support he was receiving and how much “HR work” he was doing.

I immediately said to him that this was a good thing, which took him by surprise. I continued to put my argument forward that it is not HR’s role to be managing his staff, and that the concept of HR being the department that deals with “People matters” is old and not contributing to organisational growth.

His counter argument was that he is there to make sure his business unit achieves its output goals and all this other HR mambo-jumbo is wasting his time. I did concede that if HR is dumping a lot onto him that is not value adding then he may have a point and should push back on doing stuff that fails to help him achieve his outputs. But, achieving his goals involves people, and he could not abdicate this role to HR or anyone else. Management of a business includes effective management of people. I asked him about his HR department in some more detail and how they had got to this point.

There are a number of interesting take aways from this discussion that took place. Firstly this is not a unique situation and its been an ongoing debate for many years. What it does tell me is that the role of HR in that organisation in not understood or positioned properly. Even though HR is trying to do the right thing by getting line management to take accountability for their staff in a holistic manner, they are fighting an uphill battle and will continue to do so until the executive reposition the HR department correctly.

The second point I would make is that the HR department does not realise the long term damage they are creating when they execute an approach without the proper backing and strategy. It backfires like we have seen with this line manager. His view of the HR department is not positive and he sees them working against him. Correcting this is now going to be a bigger problem than before.

Thirdly this does highlight a major concern with the level of strategy knowledge within HR departments. HR folk tend to be good at designing and executing activities inside the “HR space”, but can do with some support in executing programmes into the larger strategic realm. It points typically to the lack of business understanding and how to position HR strategically.

The forth point is about line managers themselves – I personally think that most of the push back to managing all aspects of their staff is related to fear and uncomfortableness with dealing with difficult people situations. This highlights the need to select management correctly, and not just appointing the good salesman into the sales manager role. Not all people are good and dealing with people matters, but it must be a requirementfor management and supervisory positions, and training and development in this space is a necessity.

Lastly it is also senior managers responsibility to measure people correctly to achieve particular behavior changes. If this line manager is rated on how he achieves his output goals, then that’s what will drive his behavior, however, if he is also measured on how he effectively manages people and gets the best out of them then that will drive another set of behaviours – but its all part of a well thought out HR strategy.

Some of you may be thinking whether there is a need at all for an HR department if line management become super proficient in managing people. The answer is not as simple as a Yes/No, but I do think that you can get rid of the HR department as we know it today. Concepts such as HR shared services and other components that are administrative and transactional in nature can be owned by an inclusive services division. But HR strategy and expertise groups would still need to exist, but could be intertwined into the organisation in other ways than a separate department. Sounds like a good topic for a later discussion.

Check out the poll below about how you feel about your HR departments.

The great thing about the internet is that it’s easy to see if you have any like minded homo sapiens out there thinking about the same things you are. I decided to do a search on the phrase “HR Strategy” on the Google search engine. Well at least one thing was confirmed – there are a lot of people thinking about HR strategy. With more that 30 million hits on the search engine, I began to wonder what value my views on the subject would add to the improvement of the “HR Business World”. But then I was also struck by the notion that real HR strategy is such a rare phenomenon in businesses, that with all this information out there, how come we are not seeing great strategies being formulated by organisations.

After some thought on the matter it dawned on me that all this information out there on the topic is probably about what you should do to create a great HR strategy, advise, pitfalls, best practices and the likes or even perhaps, a posting of their own  HR strategy. OK, so if I can find out what to do, then I should be able to build a grand strategy? – Mmmm, again I came back to my concern that finding an organisation with real HR strategy was as rare as hen’s teeth, so maybe all of these contributions to the topic on the internet are missing the point, but surely the 30 million contributors can’t all be wrong!

I went back to the fundamental question – what is HR strategy? Of course it is a conscious effort to make ones organisation more competitive than the next through its employees. So if you have a strategy that does this, why on earth would you publish it onto the internet – surely not so your competitor could download it and re-strategise their HR thinking to be a more competitive company!

Here is the one key issue – people don’t understand that real HR strategy is about business competitiveness, most think it is about implementing HR best practices, and this is why you see so much commonality in the strategies and other documentation flooding the internet. HR strategy is only possible if the organisations executive firstly understands and accepts that employees can be a competitive advantage, and has the courage to change the organisation in structure, value, culture and thinking in order to achieve this. This is often just too difficult a mountain to climb, so instead the HR director implements interventions that are supposed to make the employees and the organisation better. The director buys into industry best practices, implements all the gizmos such as performance management systems, career planning systems, review systems and the like. What he has not seen is that he has become a clone of the industry they operate in. He is doing the same things as every other “Excellent” HR department and by default not differentiating themselves to become more competitive.

So what’s wrong with “HR Gizmo’s” I hear you say – they are after all good HR practice. Well, in isolation they may be of some value, but in all likelihood they will be viewed as an add-on to the already overloaded manager and employee work plate. You see, one of the other fundamentals of real HR strategy is that it must intertwine seamlessly within the organisation, and this can only be possible if HR activities are supporting a business objective that in itself supports growing business competitiveness through employees. If this is not the case, sooner or later your HR intervention will develop holes in it and sink to the bottom of the ocean – sucking along with it, the reputation of the HR department.  

Most organisations will not expose their business strategies for fear of giving their competitors the edge, and until organisations see HR strategies in the same light, they will continue to miss the boat. From this it should also be obvious that the formulation of an HR strategy must be developed from within the organisation based on the knowledge of the overall business strategy, if it isn’t done this way, it cannot be regarded as a competitive HR strategy.  

So I will stick my neck out and say that of the 30 million references to HR Strategy on the internet, most are singing the HR best practice tune. To all those organisations who have published their HR strategies for the world to see – may your employee competitiveness rest in peace.

Im still amazed at the amount of HR professionals that are offering totally the wrong services, but are convinced they are acting in a strategic manner. Even sadder is that these HR folk think their organisations are lapping it all up and experiencing the the wonders of their works! ~ the ultimate result is that these HR people seemed to be the most shocked when they are terminated or their HR role is severely minimised because they “are not adding any value”

One of the key reasons for this scenario playing out so often in organisations across the world is that the level of “HR Maturity” in out of sync with what the organisation wants and in particular what the Executive layer in the organisaiton wants out of HR. Paul Kearns wrote a great book circa 2003 on the HR Maturity scale, and I think it is still so relevant today.

An organisation with a low level of HR Maturity ~ meaning that the organisations executive DOES NOT want more than basic & good HR administration, but definitely nothing near strategic operational HR services, don’t get what they want because of “blinded ” HR professionals. The HR manager often has an HR professional “hat” on and concludes that what this organisation needs is all so called “HR Best practices” because it’s what all good HR departments are doing! – boing! wrong!.

Lets take a practical example. Mr Good HR Manager pushes hard to enforce the company performance management system – he regularly feeds back at the HR management meeting that x% of staff have not completed their Performance review and spends enormous amounts of time ensuring everyone complies. During the annual promotion cycle the VP- Sales decides that John Soap will be getting promoted for his great efforts during the year. Mr Good HR manager protests that the Performance management system shows 3 other candidates are more deserving. The Sales VP dismisses it at ‘nonsense’.

Although the HR manager may in theory be right to be pushing a PM system, if the organisation does not use it because the HR maturity level is low, then its a waste of effort – he would be better off removing the PM system as it actually is a destructive tool ~ staff would not want to use it if they know VP’s simply have their own criteria for promotions.

In my view the level of HR maturity has a direct relation to what value HR can offer in an organisation. If its out of sync then you either get HR departments feeling sorry for themselves and constantly moaning that “nobody understand the value we can bring” or you get Executives that do actually understand what value HR can offer, but HR has their head in administration and don’t offer much value beyond this. Execs tend to then think “Just as i thought – HR is useless”

The important thing is to realise that not all companies want a strategic HR department, and there is nothing wrong with this. What you don’t want is an HR manager who cannot see beyond his HR blinkers and misalignes the HR offerings to his organisation.

The critical steps are:

• Understand the HR maturity level in your organisation
• Analyse your current HR services against the HR Maturity level and determine if these services are adding value
• Stop value destroying services as soon as possible
• if you are below the desired HR maturity level – develop a plan to get to the higher level
• If you are above the desired HR maturity level – either educate and motivate change in your organisation to see the value these services can offer, or reduce the HR offering to support a lower HR Maturity level. It is always better to remove services not supportive of a particular  HR Maturity level (surprisingly it builds confidence in HR!)

By aligning your HR services properly to the level of HR Maturity in your organisation, you are guaranteed a “kiss to remember”