2009’s economic downturn was twice as deep as previously forecasted however Deloitte’s recent survey shows:
"More surveyed executives believe the worst of the economic downturn is behind us, by a decisive 31% to 7% margin"
Despite indications of economic recovery, many companies have only marginally planned for it. Plus many lack the Human Capital insights necessary to assure success.
Companies typically lack the knowledge and tools to enable a meaningful Human Capital plan that is aligned with corporate strategies (if they have them).
Strategy implementation is a Human Capital issue; HR by its charter is responsible for influencing corporate strategy execution. HR must take a strategic leadership posture.
HR’s General Role
Lawler and Mohrman (2000) claim that HR must be positioned as a strategic business partner, who participates in both strategy formulation and implementation.
HR is well positioned, within an organization, to affect strategy implementations which are human centric. Plus HR’s cross functional view, allows an excellent understanding of a business’s operations.
The skills for strategy implementation are concentrated in HR. And HR is responsible for acquiring the talent necessary and aligning it with corporate strategies.
HR’s Strategic Role
The barriers to the successful implementation of any corporate strategy are:
- Lack of Top Leadership and Teamwork
- Corporate Rigidities (Gregor 2008)
- Strategies Morphing to Tactics
- Incongruent Strategies, Goals and Corporate Vision
- Strategies not Effectively Communicated
- No Employee Buy-In to Strategies
- Necessary Human/Economic Capital not Available
- Deficient Metrication
- Inability to Execute Plans and Strategies
Consider the process to be a decision-tree; a failure of any branch causes failure of the process. HR must husband the process to ensure that failure does not occur.
Beer and Eisenstat (2000) discovered six factors leading to failure of corporate strategies. They termed them the “silent killers,” (a strategy gets killed, and no one knows it happened).
In the organizations studied, the following factors were the “killers”, often discovered after failure occurred:
- An ineffective management team
- Poor vertical communications
- Top-down or laissez-faire senior management style
- Unclear strategies and conflicting priorities
- Poor coordination across functions, businesses, or borders
- Inadequate down-the-line leadership skills and development
It is clear upon examining these factors, and the barriers (above), the underlying causes are poor management and poor communications, throughout the organization.
HR must pre-empt failure by assuring management quality; by training, or acquisition. HR must also understand the causes of ineffective communications and eradicate them.
HR’s role! Develop managers, acquire the best employees; train and develop them. HR must also contribute to the development and implementation of corporate strategies.
Strategy Creation vs. Implementation
Previous HR roles in strategy creation are hazy at best, especially in High Technology where product complexities make it an engineer’s domain.
Often strategy development creates situations like item #4 (above). Management failing to consider all factors, e.g. the market, competition, finances, human capital, etc.
HR must ensure clarity, and buy-in from all participants. Many HR organizations lack resources, so they should focus on ‘strategy implementation’; an opportunity to contribute to recovery planning.
HR should specialize in areas affecting strategy implementation; e.g. management and leadership; HR-Analytics; recruiting, training and development.
Actions HR should take:
- Partner with top-management, institute a recovery-planning process
- Develop and publish expected outcomes
- Get players to accept that HR leads implementation-planning
- Communicate strategies, get buy-in from all players
- Facilitate departmental planning
- Facilitate departmental organization and Human Capital provisioning
- Monitor progress, report status to all parties
Before strategy implementation, the ‘strategic plan’ must be completed, i.e. products or services defined, markets identified, staffing defined. HR must oversee the process.
Human Capital is a key element of strategy-implementation; provisioning it is an important HR function, HR-Analytics and assessment processes should be available to audit current employees and new recruits.
Line-managers are responsible for the physical implementation of new strategies, HR should form strong alliances with these managers throughout the organization.
The strategic planning process drives identifying types and numbers of employees required for new projects. HR should heavily involve line managers in creating job descriptions to staff these projects.
Employee Selection and Evaluation
Due to company cost cutting for survival, HR resources have been severely restricted. HR must innovatively source new employees, since many former contracting resources may be out of business.
Current employees must be evaluated for prospective capabilities; productivity-potential and job-fit. HR can audit employees using interviews and data-mined records. Interview information may be inconclusive. (J & R Hunter Psychological Bulletin 1984)
HR must consider ways (including psychometrics) to assist in performance and capability evaluations. Multiple tools and approaches should be used to assure getting the ‘best’ candidates.
Candidates typically possess two skill sets; ‘soft-skills’ and ‘hard-skills’. Soft-skills are related to thinking style and IQ, behavioral traits and interests. Hard-skills are related to education, specific experience, and previous jobs.
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Soft-Skills
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Hard-Skills
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| Thinking/IQ | Behavior | Interests | Prev Jobs | Experience | Ed/Training |
Psychometric tools are used for soft-skills evaluation, interviews (with tools generated questions) and references for substantiation of hard-skills. Soft-skills are important in all circumstances; their attributes are employee performance "forcing functions".
Candidates for new positions should be measured against standardized norms, or internal profiles. The process should not be a job-description matching and personality evaluation exercise.
Conclusions
Many companies risk being left behind in this recovery, not having conducted strategy and resource planning. They will be unaware of talent requirements or innovative strategies needed to seize opportunities, presented by the recovery.
This situation presents HR with a golden opportunity to take a leadership role in leading companies to new successes.
References
Beer, M. and Eisenstat, R. A. 2000. “The Silent Killers of Strategy Implementation. .” Sloan Management Review
Gregor 2009: www.evancarmichael.com/Starting-A-Business/3885/Underperforming-Corporations.html
J & R Hunter, "Validity and Utility of Alternative Predictors of Job Performance" Psych Bulletin, July 1984
Lawler and Mohrman (2000) “HR As a Strategic Partner": Human Resource Planning. Volume 21
Managing Talent in a Turbulent Economy, Survey – Deloitte (Forbes Insights) September 2009
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