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HR's Challenge for the Recovery!

Guest post by: Henry Gregor

Article Overview: As many companies think out strategies in response to the recent recessionary downturn, and its anticipated effect on them, HR's role in their corporation's activities must change. To help companies thrive, HR must work to lower workforce related costs and increase productivity. To improve business performance over the longer term, HR must revamp and realign its functional contributions, and its services, in order to seize the opportunities created by the economic recovery.

HR's Challenge for the Recovery!

The 2009 economic downturn was twice as deep as previously forecasted according to figures from the European Commission. However Deloitte has published results from their September 2009 survey:

"For the first time since this study was launched in January 2009, more surveyed executives now believe the worst of the economic downturn is behind us, rather than the worst is yet to come - and by a decisive 31% to 7% margin"

Despite indications of economic recovery, many companies have only marginally planned for it. Plus many lack the insights that ensure the right employees are retained (or planned for), and are aligned with the company's strategies.

These organizations typically lack the knowledge and the tools to enable the implementation of a meaningful Human Capital plan, a plan outlining how an organization's strategies will be implemented (if they have them).

Strategy implementation is inherently a Human Capital issue; HR by its very title should be responsible for managing the execution of corporate strategies. Without plans and actions, companies will languish in the backwater of the recovery; HR must take a leadership position to prevent this from happening.

HR's General Role

Lawler and Mohrman (2000) claimed that the HR function should be designed and positioned as if it were a strategic business partner, who participates in both strategy formulation and implementation.

HR is incredibly well positioned, within an organization, to affect strategy implementations since they are human centric. HR has an organization-wide, cross functional view, allowing it an excellent understanding of the business and operations.

The skills required for strategy implementation (and the inclination to use them) are more concentrated in HR than anywhere else in an organization. And due to its human centricity, HR is responsible for the acquisition and evaluation of necessary talent and its alignment with organizational strategies.

HR's Strategic Role

There are a number of barriers to the successful implementation of any corporate strategy. Some of these barriers are:

1. Lack of Leadership and Teamwork at the Top

2. Corporate Rigidities (Gregor 2008)

3. Strategies Morph to Tactics (no complete strategies)

4. Strategies, Goals and the Corporate Vision are Incongruent

5. Strategies are not Effectively Communicated to Employees

6. Employees Don't Buy-In to the Strategies

7. Necessary Human Capital is not Available (or applied)

8. Deficient Metrication and Capitalization

9. Inability to Tactically Execute on Plans and Strategies

If we think of the process as it were a decision-tree, then a failure of any of its branches will cause a failure of the whole process. HR must husband the process to ensure that failure for any of the above reasons, does not takes place.

In a study by Beer and Eisenstat (2000) they discovered six factors that led to the failure of corporate strategies. They termed them the "silent killers," elements that could kill a strategy implementation, and no one would know it had happened.

In the organizations they studied, the following six factors were the "killers" most often discovered when strategy failure occurred:

1. An ineffective management team

2. Poor vertical communication

3. Top-down or laissez-faire senior management style

4. Unclear strategy and conflicting priorities

5. Poor coordination across functions, businesses, or borders

6. Inadequate down-the-line leadership skills and development

It is clear that upon examining these factors, and the barriers that lead to failure, there are two major underlying causal effectors; poor management and/or leadership, and poor communications (in all directions) through the organization.

HR must pre-empt the possibility of failure by assuring that management quality is maintained, either by training, or by acquisition. At the same time HR must understand the impediments to effective communications and eradicate them.

HR is in the driver-seat for acquiring and developing management; as well as acquiring employees - their evaluation, training, and development. It can also play a key role in the development and implementation of a corporation's major strategies.

Strategy Creation vs. Implementation

The role HR can and has played in the past in the strategy creation process is hazy at best, especially in High Technology companies where understanding the complexities of products and their markets is the domain of the engineer.

However HR can play a significant role in assuring that the processes of strategy development are thorough and complete. It is at this point that strategies often get morphed to tactics and the process becomes product centric.

Often a strategy development process will cause situations such as in item #4 (above). Management teams often fail to consider all factors, such as the market, competition, finances, human capital, etc.

HR must ensure clarity and a buy-in from all participants. In this down economy many HR organizations suffer from lack of resources; HR should narrow its focus to the area of strategy 'implementation' for the opportunity to contribute to recovery planning.

And since resources are limited, HR (in its new strategic role) should set realistic and achievable objectives. E.g. implement a management/leadership development and HR Analytics process; set up recruiting, employee training, and development programs.

Actions HR should take:

1. Develop (with top-management) recovery-planning as a process

2. Develop and publish outcomes expected of the process

3. Get all players to accept that HR is leading implementation-planning

4. Communicate strategies, get understanding and buy-in by all players

5. Facilitate departmental planning for strategy implementation

6. Facilitate departmental organization and Human Capital provisioning

7. Measure progress, feedback status to all parties of the plan

Before strategy implementation can begin, the 'strategic plan' must be completed, i.e. products or services defined, markets identified , resources (human, economic, plant, etc) required and sources identified. HR must oversee the process.

Since Human Capital is a key element of strategy-implementation; provisioning it is a critically important HR function, there should be an HR Analytics processes in place to audit and evaluate current employees, and to assess new recruits.

Since divisional line-management will be responsible for the physical implementation of new strategies, HR should form strong alliances with this level of management throughout the organization.

The output of the strategic planning process drives the identification of the types and numbers of employees required to staff the new projects. HR should be heavily involved with line managers, creating job descriptions for all positions in these projects.

Employee Selection and Evaluation

Since HR resources will have been severely restricted during this recession by companies cost cutting for survival. HR must find innovative ways to source new employees, since many of the former contracting sources are probably out of business.

It is imperative that internal employee candidates be evaluated thoroughly for prospective capabilities; productivity potential and job-fit. HR can make capability audits of these employees using data-mined records (HR Analytics) and interviews. Interview information will be scope limited. (J & R Hunter Psychological Bulletin 1984)

HR must look at new ways (including psychometric tools) to assist in potential performance and capability evaluations, and interviewing. Multiple tools and approaches should be used to assure getting the 'best' candidates.

Candidates normally possess two skill sets; what we will call 'soft skills' and 'hard skills'. Soft skills are related to a persons thinking style and IQ behavioral traits and interests. Hard skills are related to education, specific experience, and previous jobs.

Soft Skills			Hard Skills
Thinking/IQ	Behavior	Interests	Prev Jobs	Experience	Ed/Training

Psychometric tools should be used in soft skills evaluation, interviews (with tools generated questions) and background checks will deliver an evaluation of hard skills. Soft skills are important in all circumstances, it is their attributes that are the "forcing function" for the employee. They provide the drum-beat that people march to.

Candidates (internal or new) for positions to be filled, should be measured against standardized norms, or internally generated profiles. Candidate selection should not be just a job-description matching and personality evaluation exercise.

Conclusions

Many companies risk being left behind in a recovering economy; not having conducted necessary strategy and resource planning. Nor will they have developed the talent and/or innovation 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 found successes.

References

Beer, M. and Eisenstat, R. A. 2000. "The Silent Killers of Strategy Implementation. ." Sloan Management Review

Gregor 2009: 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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Article Tags: backwater, business partner, corporate strategies, deloitte, economic downturn, economic recovery, european commission, execution, functional view, hr function, implementations, inclination, insights, lawler, leadership position, mohrman, nbsp, strategy formulation and implementation, strategy implementation



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