VALUE-ABLE HR RESEARCH
VALUE-ABLE HR HR IS THE AWKWARD CHILD IN MANY ORGANISATIONS. ITS RELATIONSHIP WITH ‘THE BUSINESS’ IS CHALLENGING, CHANGEABLE AND NOT UNIVERSALLY WELL-UNDERSTOOD. KEEN TO MAKE AN IMPRESSION, CHASING THE DREAM OF ‘A SEAT ON THE BOARD’ LIKE A DOG CHASES A BALL, AND MISUNDERSTOOD BY MANY; ITS ADOLESCENT YEARS HAVE BEEN CHALLENGING ONES. STRUCTURAL MODELS AND NAMING EXPERIMENTS HAVE DONE LITTLE TO IMPROVE ITS REPUTATION, AND A GROWING SENSE OF FRUSTRATION REMAINS, BOTH FROM BUSINESS LEADERS AND HR LEADERS. Over the first three months of this year we engaged in one to one conversations with Board level business leaders and experienced HR Directors and specialists, working in organisations across the world in a range of sectors and industries. Some of their organisations are pursuing growth whilst others are seeking efficiencies, however ‘change’ is common to all. We asked the same questions of all research participants and were surprised by the level of agreement in terms of priority focus areas, albeit described in varying ways. The results of our research are probably not surprising; many are noticing the cracks and missed opportunities. We hope that this small piece of research will encourage the process of dialogue in organisations, create energy for forward planning, a focus on commercial and pragmatic solution generation, and ultimately create CLARITY and MOMENTUM for VALUE-ABLE HR.
QUESTION 1: WHAT ARE THE BIGGEST EXTERNAL ISSUES POTENTIALLY IMPACTING YOUR ORGANISATION OVER THE COMING THREE YEARS? Unsurprisingly, FISCAL POLICY and changing POLITICAL and REGULATORY environments were perceived to be important to most respondents. There was general agreement that it was important to understand these areas and to recognise changes and trends that may impact an organisation well in advance. There was a trend among HR professionals to speak of GLOBAL EXPANSION and the need to understand and maintain an organisation’s CULTURE as this takes place. HR leaders also spoke of the likely move towards a CANDIDATE DRIVEN MARKET over the coming years and the competition this may create in terms of SECURING THE CAPABILITIES REQUIRED for an organisation’s future. Business leaders spoke more about MARKET EXPANSION, MARKET MODERNISATION and the impact of ADVANCES IN TECHNOLOGY upon the PRODUCT TO MARKET OPTIONS and the broader SUPPLY CHAIN. COMPETITOR PRESSURE on the supply chain was a key concern and, in some organisations, optimising the interface with a parent company and managing the potential implications of a PARENT COMPANY STRATEGY also featured heavily. Whilst HR professionals show an awareness and understanding of the broader external environment, they appear to demonstrate less analysis of some of the more commercial external and ‘quasi external’ pressures faced by organisations; instead moving quickly to consider high impact HR focused issues. It may be that they have thought through some of the issues raised by business leaders in order to reach these functionally coloured reflections, however there was little evidence to suggest this. A simple solution may be for business leaders and their HR professionals to jointly engage in a regular PESTLE and SWOT analysis exercise.
QUESTION 2: WHAT ARE THE MOST IMPORTANT AREAS OF FOCUS FOR YOUR ORGANISATION OVER THE COMING YEAR? ‘GAINING ALIGNMENT’ was universally cited as the most critical focus. Some respondents felt that there was ‘no clear direction’ espoused, recognised and acted upon throughout their organisation and stated that ‘establishing the defining strategy’, ‘getting on the same page’, and ‘removing discontent and working against each other’ were critical to success. Most respondents spoke of CHANGE and TRANSFORMATION focused on the introduction of NEW TECHNOLOGY, CHANGING WORKING PRACTICES, driving GLOBAL GROWTH and / or ORGANISATIONAL CULTURE development.
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GALLUS CONSULTING Only business leaders spoke of driving REVENUE GROWTH, although one HR leader did voice an ambition to become a contributor to the bottom line as opposed to a cost. Business leaders spoke in terms of the exploration and development of JOINT VENTURES and acquisitions whereas HR leaders focused upon OPERATING COST MANAGMENT, TALENT, DEVELOPMENT, TALENT RETENTION and the creation of STRUCTURE, both in terms of ‘structured thinking and planning’ and ‘creating structure in terms of roles’. The subtle difference in emphasis is interesting. There is no doubt that many organisations, even those with a growth agenda, focus upon the management of operational costs at all levels. However, business leaders consistently neglected to mention this when talking about their priorities, focusing instead on the more positive message of revenue creation and driving growth. Joint BUSINESS PLANNING AND PRIORITISATION discussions would go a long way towards creating greater alignment between business leaders and HR leaders, and a clearer, more consistent message being propagated throughout the organisation.
QUESTION 3: ARE THERE AREAS OF THE ORGANISATION THAT YOU ARE LOOKING TO TRANSFORM OVER THE NEXT THREE YEARS? Transformation seemed to feature for all respondents. NEW PRODUCT OFFERINGS, alternative ROUTES TO MARKET and EVOLVING TECHNOLOGY were coupled with the development of new ORGANISATIONAL STRUCTUTRES, centralising and optimising SUPPORT FUNCTIONS, optimising BUSINESS PROCESSES and developing new BUSINESS CAPABILITIES ‘in response to market pressures’. Importance was placed upon the workforce developing a greater ‘value chain and cost/benefit understanding – a focus on why we’re here’. Some organisations had plans to ACQUIRE another organisation, to enter into a JOINT VENTURE and/or to DIVEST a part of the business.
QUESTION 4: HOW DO YOU BELIEVE WORKPLACES IN GENERAL WILL CHANGE OVER THE NEXT FIVE YEARS? LIKELY CHANGES RAISED BY RESPONDENTS
% HIGHLIGHTING CHANGE
DEMOGRAPHICS
63%
WORKFORCE FLEXIBILITY
38%
STRUCTURE
25%
GLOBALISATION
25%
TECHNOLOGY ENABLED
25%
RESPONDENT’S COMMENTS
Some respondents spoke of an ‘ageing population’ whilst others focused on the ‘workforce of the future.’ There was an acceptance that, in order to create a flexible workforce, ‘we will need to be more flexible and creative about the way people work’, and will need to work out ‘how to create fluidity and flexibility to be innovative whilst maintaining some kind of organisation’. There will be ‘more matrix environments and people working on projects rather than a job.’ The additional complexity created and need for individuals who can operate across regulatory, political and cultural boundaries will become more important. ‘Challenges regarding culture, knowledge sharing and efficiencies will become more complex.’ Technology was seen to have a significant impact on working methods and client experience. Respondents did however highlight that face to face communication will still be critical, ‘you can’t get away from the face to face to embed culture’, and that globalisation may drive ‘more travel despite technology.’
SKILL-SET REQUIREMENTS
25%
Respondents talked of knowledge sharing and ‘stretching knowledge and multi-skilling’ across organisations. Language skills are likely to become more sought after.
DATA DRIVEN
12%
There is a general sense that a ‘more analytical approach’ coupled with evidentially supported critical thinking and decision making will evolve.
12%
Employees, clients and investors are becoming more environmentally aware and demonstrating a greater conscious focus on their impacts upon the communities in which they work.
ENVIRONMENTAL FOCUS
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VALUE-ABLE HR RESEARCH
QUESTION 5: HOW CAN THE HR FUNCTION ADD MOST VALUE TO THE ORGANISATION?
VALUE-ABLE FOCUS AREAS
BUSINESS LEADER COMMENTS
HR LEADER COMMENTS
STRUCTURE
RESPONDENTS HIGHLIGHTED THE NEED TO ACHIEVE ‘A BETTER DEMARCATION OF ROLES’ AND TO ‘MAP OUT THE FUTURE ORGANISATION’ PARTICULARLY IN THE CONTEXT OF FAST GROWTH.
MOST HR LEADERS HIGHLIGHTED THE CREATION OF A STRUCTURAL FRAMEWORK AS A CRITICAL ELEMENT FOR SUCCESS.
PERFORMANCE MANAGEMENT
BUSINESS LEADERS SOUGHT A ‘BETTER IDENTIFICATION OF OVER AND UNDERPERFORMANCE’ AND A GREATER LEVEL OF SUPPORT IN CREATING A CRITICAL CASCADE OF OBJECTIVES ACROSS THE ORGANISATION ‘SO THAT PEOPLE ACROSS THE BUSINESS KNOW WHAT THEY SHOULD BE DOING AND REMAIN FOCUSED ON RELEVANT ACTIVITIES’.
ONLY 20% OF THE HR LEADERS WE SPOKE TO CONSIDERED PERFORMANCE MANAGEMENT AND SHAPING OBJECTIVES TO BE A MANNER IN WHICH THEY COULD ADD VALUE.
WORKFORCE PLANNING
THE FOCUS OF BUSINESS LEADERS WAS VERY MUCH ON TALENT ACQUISITION STRATEGIES AND RECRUITMENT. THEY SPOKE OF NEEDING HR TO ‘BE MORE STRATEGIC IN RECRUITMENT – IDENTIFYING GAPS EARLIER AND SOURCING QUALITY PEOPLE’ AND ‘FINDING THE RIGHT PEOPLE IN THE MARKET.’
HR RESPONDENTS UNSURPRISINGLY SOUGHT TO BROADEN THEIR IMPACT WITH REGARDS TO WORKFORCE PLANNING AND FELT THAT THERE WAS A NEED ‘TO EDUCATE BUSINESS LEADERS ABOUT THE GENERATIONS THEY WILL BE EMPLOYING’ AND THAT WORKFORCE PLANNING ITSELF ‘NEEDS TO BE MORE DISCIPLINED AND FOCUSED ON AREAS OF ORGANISATIONAL FOCUS – WHAT SKILLS DO WE NEED’?
TALENT DEVELOPMENT & RETENTION
BUSINESS LEADERS DESCRIBED THE NEED TO ‘DEVELOP TALENT TOWARDS THE FUTURE ORGANISATION’.
HR LEADERS SPOKE OF THE DEVELOPMENT OF RELEVANT ‘TECHNICAL SKILLS’ AND ‘PROVIDING THE TOOLS FOR LEADERSHIP’.
CULTURE
IN GROWTH ENVIRONMENTS, BUSINESS LEADERS RECOGNISED THE THREATS TO ORGANISATIONAL CULTURE AND EXPLAINED THAT A KEY ROLE OF HR IS TO ‘MAINTAIN CULTURE AND TAKE TEMPERATURE CHECKS AS THE ORGANISATION GROWS.’
HR LEADERS, HAVING MENTIONED CULTURE ELSEWHERE IN THE CONVERSATIONS, DID NOT HIGHLIGHT IT AS AN AREA WHERE THE FUNCTION CAN ADD MOST VALUE.
In order to deliver value in the areas above, business leaders wanted the HR function to consciously CHALLENGE them in their thinking. There was a feeling that HR focused on challenging around process and procedure rather than in terms of the impact of actions and decisions on the value chain and the ability to do business in the future. Business leaders felt that HR ‘should provide challenge, but not suffocating barriers via bureaucratic processes;’ they should ‘show risks to inform decision making but allow the business to make decisions’. Both business leaders and HR leaders alike highlighted the need for HR to operate as PART OF THE BUSINESS rather than from an IVORY TOWER. It should ‘be part of the business – part of the process – not separate’. This would enable the function to ‘ascertain and deliver what the business needs,’ as a ‘commercial function – to grow the bottom line and not just add cost.’
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QUESTION 6: WHAT ARE THE CRITICAL ENABLERS FOR A VALUE-ABLE HR FUNCTION (WHAT REALLY MAKES A DIFFERENCE TO CREDIBILITY AND CONTRIBUTION)?
COMMERCIAL
UNDERSTAND THE BUSINESS
‘understand the commercial nature of the business - at the heart of everything’
MARKET UNDERSTANDING 'totally understand the employment regulatory environment’
‘Don’t underline the ‘fluffy’ stigma’ ‘HR is only the framework you draw on - question if your action will damage the bottom line’ Understand the numbers - help with forecasting- identfy gaps and sensibly prepare for these’
'acutely understand the market trends' 'know where restructures are happening and where we can go to fish' 'know the industry and have standing within it' 'use benchmarking'
KNOW YOUR STUFF
THINK BROAD AND THINK FORWARD 'aware and collaborative within the HR team'
JOINED UP
EVIDENCE BASED 'demonstrate a strong track record' 'give practical advice' 'deliver basic services' 'do something that makes a difference to the business or part of it’
'well connected' 'in dialogue with network and contacts' 'driving people decisions that fit the strategy' 'challenge assumptions'
'in touch with managers and understand individual employee performance’ 'accurate' 'facts and figures to support decisions'
MAKE A DIFFERENCE
QUESTION 7: WHAT ARE THE MAIN DE-RAILERS THAT PREVENT AN HR FUNCTION FROM DELIVERING VALUE? In many ways, the responses here were the direct opposite of the enablers in the previous question. Again similar themes were identified by both groups, however HR leaders were particularly frustrated by the level of capability demonstrated by those entering the profession; highlighting that ‘many people coming into HR don’t seem to understand what’s required.’ 1. Lack of commercial awareness: HR leaders expressed more frustration than business leaders in terms of the lack of commercial awareness prevalent in some HR teams. HR was seen to be ‘doing irrelevant things’, and adopting an ‘inward looking view’ all too often. 2. Out of touch: A lack of commercial awareness coupled with a ‘lack of industry awareness’ and a commonly held perception that HR professionals were ‘not up to speed’ let alone ‘ahead of the curve’ led them to ‘not knowing reality’.
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VALUE-ABLE HR RESEARCH
3. Remote: HR leaders cited an ‘unwillingness to listen’ and almost territorial ‘HR ownership of processes’ leading to a text book approach to the resolution of business problems that didn’t always create the optimal result. Business leaders recognised this and suggested that HR are ‘not engaging sufficiently with the people they are serving resulting in a ‘we call the shots – you listen’ approach from HR which is not well received by commercial leaders and employees. 4. Inflexible: the text book approach extended to ‘stubbornness’ in the mind of one HR Director. Business leaders demonstrated frustration in the lack of practicality of solutions and the ‘one size fits all’ approach. 5. Lack of capability: Business leaders were concerned that it had at times become evident that their HR professionals ‘didn’t know the right concerning (and of) underperforming individuals’ and as a result needed ‘excessive external counsel’, cost the business money or, ‘kept underperforming people in the business for too long.’ 6. Inappropriate behaviour: HR Leaders and business leaders alike stated that complete discretion and adherence to an organisation’s policies and regulations were not negotiable for HR professionals. 7. Lack of cultural understanding: Business leaders described this as ‘losing the thread of the type of people we want to attract’ – again a major link to talent attraction and recruitment activities. 8. Excessive bureaucracy: A number of respondents described this as a ‘fine line’ but felt that ‘relying on bureaucracy and processes’, ‘following process for process sake’ and placing ‘process above everything else’ were potential de-railers for the function. 9. Lack of data: Evidence based decision making and the effective ownership and analysis of data were recurrent themes throughout the research. HR Directors highlighted that a ‘lack of ability to manage and analyse data to tell a story’ did not support the development of greater credibility. 10. Getting the basics wrong: HR Directors felt that the drive to influence at a strategic level and the volume of transactional employee relations issues that required intervention could at times lead to a reluctance to focus time and energy on foundation processes. There was also a propensity to ‘take on too much’. The HR leaders we spoke with recognised the damage created by focusing on the wrong things before the basic foundations are optimised and consistently performing.
QUESTION 8: WHAT DOES YOUR HR FUNCTION FOCUS ON THAT IS SUPERFLUOUS? There was some real irritation here from business leaders in relation to a perceived obsession with the ‘profiling of roles’, JOB MAPPING and SALARY BENCHMARKING. One business leader described this as a ‘preoccupation with bureaucracy and market norms to the exclusion of the reality of the markets.’ BUREAUCRACY and PROCESS was again raised as an area over focused upon by HR professionals; ‘too much gold-plating of everything’, ‘overcomplicating everything – keep it simple.’ HR leaders recognised this and felt that, at times, they were involved in processes that delivered little or no value to the organisation. HEADCOUNT APPROVAL was cited by many respondents as an area where HR could and should hand over greater control to the business; one HR Director described it as a ‘laborious process that should be managed by managers as part of a budget.’ EMPLOYEE ENGAGEMENT surveys and projects were also questioned in terms of their validity and impact; one HR leader suggested that it ‘makes no difference as a project’ and to ‘just use ten questions regularly as a pulse check.’ Some business leaders expressed concern regarding the ratio of HR people to those in commercial business areas; one leader was ‘astonished by the number of people in the HR department – it can’t be sustainable.’ This suggests that either HR functions in some organisations are inefficient and are not delivering expected results, or that business leaders are not fully cognisant of the role that HR performs and the impact the HR function has in their organisation. Either way, it is a situation that needs attention. HR leaders felt that they could make greater impact if MANAGEMENT CAPABILITY was improved across the organisation. They presently felt that their teams were ‘doing stuff that managers should be doing’ and that HR is ‘too involved in people management’. HR leaders highlighted a ‘need to increase management capability and responsibility’ and that ‘upskilling managers is critical.’ HR professionals ‘presently own the HR process and save managers from doing something stupid’ rather than ‘going and doing it being mindful of and mitigating risk.’ Although there was agreement that HR should ‘do with, not do to’ and broad support for Line Managers taking on more responsibility; ‘Line Manager responsibility is to manage their people and to engage. HR should facilitate this process’; there was concern that this could create additional risks as ‘the business is more focused on results not people.’ HR leaders felt a pressure to aggressively manage OPERATING COSTS and, in some organisations, had little control over the providers they could engage with for support, due to STANDARDISED FEE STRUCTURE expectations, PROCUREMENT FUNCTION LED SUPPLIER MANAGEMENT and the drive to use the provider with the CHEAPEST proposals. A number of HR Directors made the point that ‘the cheapest and/or standardised option is not always the route to true value creation.’
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GALLUS CONSULTING QUESTION 9: HOW DO YOU KNOW YOUR HR FUNCTION IS MAKING THE DIFFERENCE YOU NEED - WHAT METRICS / MANAGEMENT DASHBOARD DO YOU USE TO MEASURE HR CONTRIBUTION? Most participants felt that they did not have clear measures that demonstrated the contribution the HR function was making to the organisation. A range of measures were cited; ENGAGEMENT SCORES, RECRUITMENT COSTS and ON-BOARDING STATISTICS, ATTRITION LEVELS and HEADCOUNT all featured. Some organisations use EXTERNAL BENCHMARKS such as the Times ‘Best Companies’ list and others use internal QUALITATIVE FEEDBACK to ascertain value-add. Some measure very little and others appear to measure too much. One HR Director shared that they ‘don’t know how we’re performing – we focus on too many metrics that have little or no true predictive value.’ What is clear is that most HR functions have not yet got to grips with the METRICS THAT MATTER and that tell the story of their contribution to the bottom line, future growth and risk mitigation.
QUESTION 10: HOW COULD YOUR HR FUNCTION BE MORE EFFECTIVE?
Most business leaders considered HR to be an operational function with a very clear message that the basics must be delivered effectively and efficiently before HR will be considered credible to contribute strategically. HR was described as ‘largely operational – it is a critical foundation. Its level of strategic contribution depends on what mode you’re in as a company’ and ‘only strategic in specific areas but predominantly operational.’ Many HR professionals are likely to be concerned by these opinions but there was recognition amongst the HR leaders who participated that HR ‘won’t get credibility at a strategic level if it can’t get the basics right – get these right and then you can have more conversations at a strategic level.’ Increased effectiveness was an ambition for all of our leaders, HR or business focused. Use of TECHNOLOGY TO STREAMLINE AND MANAGE PROCESSES along with the potential OUTSOURCING OF GENERIC, HIGH VOLUME processes were suggested. HR Directors were keen to SIMPLIFY PROCESSES wherever possible and to understand the real value created by a given process or risks created by its removal. There was general agreement that HR can demonstrate a tendency to ‘try to make HR more important than it needs to be with irrelevant processes’ (said by an HR Director). A greater CLARITY OF FOCUS coupled with a DEEPER AND BROADER UNDERSTANDING OF THE BUSINESS were regularly suggested as ways to increase effectiveness. Business leaders wanted HR to ‘demonstrate an innate understanding of the business they’re in at the time they’re in it (critical paths, engagement, resistance and energy levels)’, and not ‘blindly following what’s gone before or one person’s opinion.’ HR were encouraged to ‘bring a questioning eye, discipline and analysis’, ‘clarify who does what – remove ambiguity – and create clarity of remit, responsibility and reporting’, and to ‘simplify what needs to be done to make things happen.’
QUESTION 11: HOW INNOVATIVE IS YOUR HR FUNCTION?
Many participants felt that their HR functions were unable to be particularly innovative due to the potential risks involved. HR Directors felt that HR ‘should be at the forefront but HR professionals don’t stick their heads above the parapet’; a behaviour that, at times, was driven by change averse leadership at the very top of HR in larger organisations. HR and business leaders alike would like to see a more innovative approach. They would like to see the employment of more TECHNOLOGICAL SOLUTIONS, DATA ANALYSIS TO IDENTIFY LEADING INDICATORS, TAILORING OF PROCESSES and a greater willingness to CREATE BESPOKE APPROACHES WITHIN A FRAMEWORK and to PROACTIVELY ANTICIPATE NEXT STEPS. HR leaders wanted HR to ‘adapt best practice to best fit’, ‘make things work for the organisation and don’t be too rigid’, ‘be open and hungry and avoid creating needless roadblocks’ and business leaders agreed. On the ground it seems that that this approach isn’t being embraced……
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VALUE-ABLE HR RESEARCH
QUESTION 12: WHAT KNOWLEDGE, SKILLS AND BEHAVIOURS ARE REQUIRED OF HR PROFESSIONALS OF THE FUTURE? KNOWLEDGE • • • • • • • • • • •
•
BEHAVIOURS
SKILLS
Legal Resourcing Talent Management Required processes Required documentation Technology Financial 'understand the P&L and the budget - use the numbers to work out where to place your attention' External market Organisation's value chain 'to be credible in the business you need to be able to be inquisitive about the groups you're supporting and find stories within' ‘know the business inside out and identify trends well in advance’
• • • • • • • • • • • • • • •
Critical thinking Problem solving Process management Consulting Facilitation Coaching ‘ability to probe and question’ Interpersonal ‘ability to engage with people and to be respected and trusted’ Exemplary management Organisation Design Project Management Negotiation Sound judgement Decision making
• • • • • • • • • • •
Collaborative Approachable Professional Willingness to challenge and advise appropriately Agility and flexibility ‘able to adapt and be flexible to the environment’ Creativity ‘take calculated risks’ Intellectual curiosity Alignment Complete discretion
HR LEADERS MUST BE BELIEVE-ABLE We would suggest that HR professionals need to demonstrate leadership skills regardless of their seniority. In order to gain the trust of their internal clients, to lead change and to engage employees towards organisational success they need to be BELIEVE-ABLE.
Our research has shown that commercially successful leaders are perceived as believe-able by those around them
Learning Agility must come first; it’s the enabler that allows a leader to develop game-changing dimensions effectively. Connected leaders value people and relationships and understand how to get the best results from any team, in any situation, anywhere. Game-changing leaders are informed; they look for emerging themes and are amongst the first to recognise their significance. Innovation and creativity are natural extensions of intellect and intuition for insightful leaders at the cutting edge. Game-changing leaders are focused. They cut through complexity and do the right things well; always with their eyes on the final outcome. Valuable leaders are committed to making a difference and creating long term value for their organisation in everything they do.
An appropriate element of technical expertise is the foundation of incisive questioning, dynamic decisions and solid judgement. Ultimately, game-changing leaders are believe-able; people choose to follow them.
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QUESTION 13: HOW CAN HR PROFESSIONALS DEMONSTRATE THAT THEY ARE COMMERCIAL IN APPROACH (AND UNDERSTAND THE BUSINESS)? The research found that there are a number of ways that HR professionals can demonstrate a commercial approach. FACT FIND AND SHOW AN INTEREST
• • • • • •
USE COMMERCIAL LANGUAGE CREATE LINKS
‘have conversations with managers about the business and not just about HR related issues’ ‘seek to understand the numbers’ ‘sit with the business on a regular basis – show that you understand the front line’ ‘understand what the business does – sit with people in the business and know what’s important’ ‘attend business planning sessions and be part of your strategic business unit’ ‘understand what’s good for the business – focus for the coming year and priorities’ ‘talk in the language of the business’
• • • •
•
‘link HR stuff to business results’ ‘demonstrate ROI and efficiency gains’ ‘don’t do things that nobody needs’ ‘have a compelling story to start the journey with the leaders in the business – understand and resolve their issues’ ‘strategic fit between internal requirements and market trends – manage supply and demand’ ‘align with business goals’
KNOW THE MARKET
•
‘get out into the market more and talk to Directors regularly to apprise of market trends’
BE PROACTIVE
•
‘don’t wait to be approached’
BE BUDGET AWARE
• •
‘drive OPEX and efficiency’ ‘think about the bottom line’
USE DATA
• • •
‘go to the business with data and a story’ ‘justify what you do – acknowledge the cost/benefit ratio’ ‘use data to avoid appearing fluffy and emotionally driven’
BE VISIBLE
• •
‘prioritise personal interaction’ ‘sit in the business and hotdesk in amongst business teams’
•
We asked whether it was important that HR professionals had a commercial background or were rotated into the business from time to time in order to retain currency. There was a definite trend for favouring HR professionals with commercial roles in their earlier career background, particularly at more senior levels. One HR Director explained that they had ‘no issue with people going straight into HR from university, but to be credible you need commercial experience to operate strategically and have an opinion’, another agreed that a commercial background ‘gives more credibility – the worst HR people don’t ask about the business – the best HR people have worked in the business’. Ultimately it is important that HR professionals ‘must show respect for people in the commercial business.’
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VALUE-ABLE HR RESEARCH
QUESTION 14: HOW CAN HR PROFESSIONALS DEMONSTRATE THAT THEY ARE COMMERCIAL IN APPROACH (AND UNDERSTAND THE BUSINESS)?
STOP Creating and promoting excessive bureacracy Being process driven Operating as a silo, an ivory tower Handholding Line Managers Delivering payroll START Strategic forward planning Being true business partners Delivering commercial solutions Structuring and organising the HR function optimally Become data driven and evidence based Developing and working with external and internal networks Managing performance CONTINUE Getting the transactional stuff right Asking 'why' for everything HR does Transferring Line Management responsibility to Line Managers Business Partnering Developing organisational capability
‘HRBPs need to be all things to all people; need to understand all specialist areas’
‘Simple Processes’
‘Line Managers should be able to do a lot more for themselves’
‘small things matter!’
‘at all levels of the business – ‘be careful that ‘HR is too inflexible, too get out there and experience, technology doesn’t insular and needs to grow network, increase replace the person’ understand its place in the understanding of the business value chain’ ‘avoid being process driven – – BE IN IT!’ doing what we always did ‘take on a for the sake of it’’ ‘target talent management structure and ‘don’t be distant – be and development activity – form that’s fit for visible in times of don’t just do things for the purpose’ change’ ‘really understand the sake of it’’ business, team and skills required’ ‘HRBP is a good story but I haven’t seen ‘analyse, forecast, and it working anywhere. Be in the provide value to the ‘avoid business; don’t sit in your own business through this’ ‘with everything we do, emails – go microcosm; get in the real world; know think – what is the purpose and talk!’ what’s going on and how people feel’ and outcome that we want?’
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WHAT CONCLUSIONS CAN WE DRAW FROM THE RESEARCH? What can HR functions do to build credibility and perform at an optimal level?
Steps to take the HR function towards its best self. 99 99 99 99 99 99 99 99 99
Really understand the commercial environment - Engage in regular organisation environment analysis (PESTLE and SWOT etc.) with business leaders. Know the organisation’s value chain inside-out and how to positively impact results. Regularly spend time with front line employees, clients and investors. Get the basics right – business leaders are only interested in listening to strategic advice from HR when foundation processes, procedures and systems are working as they should. Keep ahead of developments with potential relevance to the business, or at least up-to-date. Listen to futurologists, attend conferences beyond the confines of HR and develop a broad and deep network. Get involved in broader business planning and prioritisation processes and conversations. Demonstrate curiosity, understanding and contribution more broadly across the organisation. Know how to support the business in strategic acquisitions, joint ventures and divestitures. Know your figures and those of the business. Maintain an understanding of growth, revenue generation and operating cost objectives and anchor HR activities to them. Create a people strategy that focuses on enabling the organisation to deliver, grow and protect itself.
THE JOURNEY TO A STRONG PEOPLE STRATEGY:
Win the right to influence.
Ask critical questions and challenge assumptions. Deliver interventions to make it easier to do business and achieve results. Win the credibility to influence.
Targeted interventions to: Increase present performance. Build an organisation fit for the future. Protect the organisation, its people and its assets. Create the evidence to influence more broadly
Influencer
Drop vanity projects, any obsession with 'being at the top table', glory hunting and all such behaviours.
Know the value chain.
Value Creator
Get the basics right.
Trusted Advisor
Service
Gaining credibility and influence across the organisation at every level should form a critical element of the function’s strategy. By carefully and honestly considering what the organisation requires and desires from the HR function and by remaining visible and connected at every level, the HR function can deliver sustainable value.
Contribute on a broader scale. Collaborate and facilitate strategic conversations. Create high performance and make others look good. Help the organisation to learn from experience. Influence strategy effectively and efficiently.
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GALLUS CONSULTING DELIVERING VALUE-ABLE HR The research provides very strong support for our OPTIMISED BUSINESS SERVICES model; a model capturing the critical elements required to gain credibility, win support and ultimately deliver sustainable value within any organisation:
A powerful strategy and operational process excellence that are both aligned to business plans and lock-stepped to performance analytics. A commercially sound proposition and an environment that expects and rewards tangible business contribution. A team that adds commercial value and enables the organisation to succeed‌. Believe-able professionals in any discipline know their stuff. Breadth and depth of knowledge is important but experience and a drive to perform at the crest of their capabilities is critical. Truly commercial and embedded support functions are rare. Every member of the function must align towards the overall direction of the organisation and fully understand the value chain of the business; identifying where and how they can have a positive impact upon performance and create sustainable value. Metrics that matter are vital in two respects; identifying where to intervene in a complex system and measuring the tangible results of such interventions. Creating a clear map of critical data, processes, people and responsibilities is a high priority activity.
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No Ivory Towers or Empires Engage the redundant hierarchy principle; enable talented individuals and allow them space to perform. Give them authority to make decisions and to design and implement value-able interventions. Concentrate on value creation and facilitating the business model. Become efficient and effective. No Flights of Fancy Explore the drivers for interventions value chain optimisation, risk mitigation, or is it really a vanity project? Systemic targeted innovation becomes the order of the day. Nowhere to hide Expect, recognise, celebrate and reward success. Create fans who are committed to the cause and seek to make a positive impact in all they do. Become accountable and responsible; let results drive reputations. Leverage the right levers Drive transformation through commercially relevant and robust analytics. Define the impacts required and ascertain which levers to use to drive results and become a true commercial partner in analytics driven transformation. What stage is your HR function currently operating at? When was the last time your HR function took time out to examine its purpose, align priorities and generate focus and momentum towards commercial results?
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VALUE-ABLE HR RESEARCH
Gallus build sustainable, high performance environments that everybody can believe in. With particular expertise in leadership capability and alignment, organisation design, business transformation and enterprise risk management, Gallus challenge assumptions, cultivate belief and drive positive change by making performance excellence systemic. An established business with Headquarters in Northampton, UK and offices in London, Manchester and Aberdeen, Gallus work with ambitious organisations across the world from a wide range of sectors. Find us at www.gallusconsulting.com or call +44(0)20 3751 6345.
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