Making HR a True Business Partner: Aligning HR to a Company's Business Objectives and Strategy
Editor’s Note: This is the second of five articles in our Jack Bucalo series “Making HR a True Business Partner.” Subscribe to HR Exchange Network to receive our newsletter and access all of our valuable content, including future articles, columns, videos, reports and more.
Chief Human Resources Officers always desire to be an equal business partner to their line executive peers, and they feel that their job title should entitle them to that status. Such status cannot, and should not, be handed to them. In most companies, they must EARN it.
Recently, the use of HR analytics has become the means that some CHRO’s are using to try to achieve it. However, the use of HR analytics is found solely in large companies who can afford such an expensive venture. Meanwhile, there is a much quicker and effective way to EARN that status.
If HR leaders really desire to have HR connect with the company’s business objectives and strategy, there is a way to do it. However, you must temporarily take off your HR hat and put on your business person’s hat.
The first step is to have a lengthy meeting with your CFO to understand the key numbers in: (a) the company’s latest Income and Cash Flow Statements, and Balance Sheet and (b) the company’s current financial priorities. Second, meet with the COO to understand the key operating priorities and business objectives of each major division or group. Thirdly, meet with the CEO to clarify the business strategy for the company and each of its major divisions or groups.
Now, you are ready to connect the company’s business objectives and strategy to your HR resources, recognizing that you may have to realign some staff to do it. The examples below illustrate how.
OBJECTIVE: Improve earnings per share from “X” to “Y” $/share and increase cash flow by “Z”$.
1. With Finance, implement a Cost Control/Productivity Improvement Workshop to identify potential profit improvement opportunities.
2. With Inventory and Manufacturing, implement an Inventory Reduction Workshop to identify items that can be eliminated, reduced or replaced by less expensive items.
3. Train Sales personnel how to collect outstanding receivables to bring in more cash.
4. With Engineering and Marketing, implement a Product Innovation Workshop that identifies product innovations which can gain market share, reduce product cost and use more efficient technology.
OBJECTIVE: Improve the market share of the company’s main product line from “X” to “Y” % by acquiring a business that utilizes a new technology that currently does not exist in the company.
1. Develop a plan to support the new business regarding recruitment, salary and management incentive compensation, sales incentive compensation, technical skills development, performance appraisal, innovation recognition, etc.
2. Develop the knowledge data base to evaluate the due diligence data uncovered on each potential acquisition candidate from an H. R. perspective.
OBJECTIVE: Develop about 50 business unit presidents to possess sound general management skills while operating a $50 million or larger business.
1. With a top tier business school, develop an Executive Management Education seminar that covers Strategic Market/Product Planning, Financial Management, Product Development, Customer Retention, and Leadership Development
2. Enhance the Succession Planning program to ensure that all succession candidates have an annual Personalized Development plan that is approved by the CEO.
3. Update the company’s executive compensation strategy for stock, incentive comp and salary.
OBJECTIVE: Improve the customer service image of the company to exceed future industry standards.
1. With Customer Service, survey outside and company service experts to catalog the key service principles needed to drive the new image campaign.
2. With CS management, survey appropriate top management executives to determine the industry CS requirements for the next two to four years.
3. Develop the new service principles and requirement for top management review and approval.
4. Assess the skill levels of all CS personnel in relation to the new service principles.
5. Train appropriate CS personnel on the new service principles, including any shift to generating new sales revenue from each customer service interaction.
6. Establish on-going workshops designed to continually improve CS innovation.
OBJECTIVE: Increase sales revenue for product “X” by 15% through the introduction of new technology.
1. With Sales, update the product’s Sales Incentive Plan to recognize the technology and its profit impact.
2. Assess the competency level of all Sales personnel in the new technology and retrain as needed.
3. Assess existing recruiting sources and identify new ones.
OBJECTIVE: Reduce the time-to-market of product “Y” by 25% to exceed current industry standards.
1. With Engineering and Marketing, implement several task forces to reengineer and streamline the entire design and launch cycle, while synchronizing with key quality and manufacturing checkpoints.
2. Retrain management personnel on the key changes before implementation.
3. Implement a Project Management Workshop to help ensure that the reengineering project and subsequent product development projects are achieved on time.
Each CHRO will have to determine if he/she wants to accept the difficult challenge of connecting with the company’s business objectives and strategic plan goals, and thereby bringing HR into its operational mainstream, or just remain as an administrative afterthought.