Supporting the business isn’t strategic HR – people centricity is
Related content
Replies (4)
Please login or register to join the discussion.
This is highly insightful article Jon, and a great read for all. We totally agree that people should play into any business strategy. At ENGAGE we break this down into one of two ways:
1. People are themselves a strategic pillar of business: in many businesses, talent is a vital part of the ability to create shareholder value. This applies across almost any industry, whether people contribute directly to the service experienced by customers (e.g. in a retail or service environment like hospitality) or to innovation (such as in a manufacturing or engineering environment).
2. People add value to other strategic pillars: Where talent is not a strategic pillar explicitly, HR needs to ask one simple question: how can people add value to the other strategic pillars for the business? For example, how can attracting new talent help to drive innovation in the firm? How can engaging people with customer needs help to improve service delivery? How can aligning employees with the business strategy help to drive growth?
All of our own data suggests that, where HR functions take this approach, ensuring they align their activities with adding strategic value, people activities can have an additive impact on KPIs (retaining talent, raising NPI ratings, enhancing customer loyalty and driving revenue growth).
We’d add a big proviso here though: for HR to be part of a fully integrated business strategy, the tools used to make strategic business decisions (namely data) must also be fully integrated. As HR becomes increasingly data led, we can only reap maximum value if we’re able to look at data and insight holistically.
Thanks for opening up a great discussion!
Hi Sarah, thanks for your support, but no, that's not what I mean. Both of your points are what I call Adding Value. In point 1, "people contribute directly to the service" indicates the business really thinks it's the service which is important, not the people. In point 2, "how can... help..." again puts people in a secondary, supporting role. They're both good points, but they're not Creating Value. Stick with the rest of the series for more explanation (next piece on Friday).
Thanks for your response Jon. I think the differentiation between ADDING value and CREATING value is an important one. But it still concerns me that as long as HR is being asked to develop a people strategy with reference to a wider business strategy, rather than playing a central role in developing THE strategy to support business goals, the value of people will always be considered additive rather than fundamental.
Thanks Sarah. It's a build. Adding value ("is being asked") comes first - what do we do to help the business do what it needs to do. Then it's about looking for additional creating value opportunities on top. These come from understanding the people, in the context of the business, but mainly about the people. But my experience is that it's the creating value part that both provides the difference that makes the difference, and gets people in the rest of the business sitting up and taking notice of HR.