In the first part of this six-part series on ‘Making HR truly strategic’, HR expert Jon Ingham makes the case for putting people at the heart of business strategy.
HR practitioners sometimes report being conflicted about whether to align with the business to be more strategic or to better support their people. However, it is actually much more useful to see these poles as a paradox rather than a dilemma.
That is, we need to do both – to focus on the business and support its people. And it is only when we do both that we act in a truly strategic way.
The problem with solely focusing on the business is that the rest of the business already does this, and when HR takes this approach we offer no additional or unique value.
HR’s unique focus
Our unique focus should be on the people working for the business. When we address ourselves to these people, we offer something new in an area that is now the centre of competitive success, yet remains sorely missing in too many businesses.
This is not about returning to the old days of personnel. Instead, this is about understanding the potential inherent in our people, and communicating with the rest of the business what new value we can provide through helping people take advantage of their own potential.
For example, if we believe that engagement is the main aspect of people’s attention that can be enhanced, we should talk to our business colleagues about the level of engagement we believe can be achieved, and ask about the business benefits this would provide.
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If our colleagues agree these benefits will be useful, we can then identify the best way to provide the people attributes that are required.
The consequence of people being the most important asset is that we should not just treat this asset like any other resource in the business.
HR creating value
I call this approach ‘creating value’ – putting people at the centre of the business and creating people-based business strategy.
The need for doing this is not new. In fact, all we are doing here is acting on the commonly repeated phrase, ‘people are our most important asset’.
The difference is understanding that this phrase has to have consequences if it is to have any real meaning at all. And the consequence of people being the most important asset is that we should not just treat this asset like any other resource in the business. Instead, we should build the business around this asset.
The growing need for creating value
When I first started talking and writing about creating value, around twenty years ago, I found it a difficult point to explain. These days, I frequently find people catch on to the idea quickly.
Perhaps I have just got better at explaining it? Or perhaps, more importantly, it has become an increasingly common way of doing business and HR. Quite often, when I speak about creating value, someone will refer to what they are doing, and ask whether this is what I mean. And usually it is.
HR needs to be able to not only talk the language of business, but also get the business speaking the language of people.
Business requirements for creating value
I also ran a workshop a few years back to help develop a new people strategy. The CEO joined us to explain what the business needed from HR to support the existing business strategy. However, he also noted that if he added up all the separate strategic business activities this would only provide about half of the increase in revenue and profit that was required.
The CEO then turned to HR and said that he hoped the workshop and therefore the new people strategy could identify what HR could do to provide the other half. This was the first time I have seen a business leader basically come to HR and say, come on, create some value for me.
So creating value is not just an idea some HR functions have, it is increasingly something businesses require from HR.
Talking the language of people
Focusing on the business provides the table stakes, it gets us into the game. But in order to make a difference we need to focus on people and the additional value people can provide.
To do this, HR needs to be able to not only talk the language of business, but also get the business speaking the language of people.
Furthermore, while we also need to understand the business, we ideally require more of our business colleagues to understand key insights from psychology, sociology, anthropology, behavioural economics, cognitive neuroscience and other people-related arts and sciences.
We need to be deeply interested in how we can help people become more motivated, how they can be helped to learn and how we can ensure their propensity to collaborate is improved.
It is from these people-related insights that the basis for creating value lies.
About Jon Ingham
I am a consultant, researcher, writer, trainer and speaker focusing on strategic people management and organisation design. I have worked in HR and change management for 20 years (including as an HR Director). I am based in the UK but have a global focus to my role.
I help HR departments raise the level of their ambition to have more impact in their businesses. This often involves developing innovative, value creating people management strategies, sometimes focused on the development of human, social and/or organisation capital (see my books / blog for more details on these outcomes).
I also design and implement strategic HR programmes, for example in talent management or culture change. And I help increase value in individual HR processes eg performance management.
I also help HR teams develop their own strategic capabilities.
My latest book is The Social Organization.