For some years, there was a debate about whether or not Human Resources should have a “seat at the table.” In other words, should HR be treated like the other functional areas of the organization and participate not only in the strategic planning but the implementation of that strategy. I have always believed that HR had a seat at the table. The challenge was not do we have a seat but what we do with that seat. In other words, how can HR create and deliver value to the organization and deliver results in the same way that other functional groups deliver theirs.
The 1997 book, Human Resource Champions by the University of Michigan’s Dave Ulrich revolutionized the way in which human resource are organized and laid the foundation for answering these questions about value. By reorganizing the HR Department, through the centralization of the administrative functions, by moving the specialists into the Centers of Excellence (COEs) and by the creation of a new type of HR professional, the HR Business Partner, the model was intended to take advantage of the efficient provision of administrative services and the customer service focus of the CRM, or to describe more accurately, take advantage of the economies of scale provided by centralization but, at the same time, take advantage of the closer customer relationships created by decentralization.
While the book and the resultant efforts have clearly changed the thinking in HR and about HR, there is a general belief that the benefits of the HRBP’s model and, more importantly the role of the HRBP, have yet to be fully realized.
The challenge, I believe is that we as a profession have not focused clearly enough and deeply enough to truly understand how we deliver value to the organization and how we deal with the challenges that HR faces. More importantly we have not truly embraced the need for new competencies in order for the HRBP to provide more strategic focus and support to the business.
Among these competencies and, I believe, the most difficult one for the HR function to focus on is that of Organizational Effectiveness and Design (OED). It is critical that HR organizes itself to effectively translate HR knowledge, skills and abilities (KSAs) into business value. For example, while most large firms use the shared services model for their administrative and transactional functions, too often they are not organized around the strategic focus of the firm but as if they were an end unto themselves.
We can define the concept of organizational effectiveness and design by focusing on the two aspects of OED; efficiency and effectiveness. OED, then, focuses on the entire organization and its performance. Through the use of planned interventions, we can determine if the organization is using its resources in an efficient manner in order to create value and is the organization effectively meeting or exceeding its strategic goals. Planned interventions are structured activities that are used to interrupt the status quo in order to make changes that could improve outcomes.
Used properly, OED becomes the competency most closely aligned with the strategic orientation of the firm and it requires HR to continually adjust and adapt both the products and services we provide to our employees and the value provided to the organization as a whole. Like any conversation about “value” HR needs to engage the operational managers in conversation and evaluation of the strategies, their impact on the different units of the organization and the responsibility to understand and act on the strategies.
While an important competency, OED is not the only one that the effective HRBP needs to develop and demonstrate.
Relationship building, including the ability to develop trust, political awareness and influencing, negotiation and conflict management skills is necessary to motivate the organization to change.
Critical evaluation skills, including the ability to gather and analyze data help us make provide timely, accurate and relevant information to management so that we can make fact based decisions.
Diagnostic skills that ask the right questions and develop the right interventions help to build internal capabilities in the organization.
Understanding the environment in which the organization operates, the perspectives within the organization and its stakeholders and an understanding of the strategic orientation of the organization demonstrates our business acumen
Lastly, in order for the HRBP to be respected and listened to, because of their knowledge of the business and because they have the confidence to translate that knowledge into actions the HRBP needs to become a credible activist, or “HR with an attitude.”
The Value Chain
With these competencies in mind, the HRBP can now focus on how to deliver real value to the organization. Value is generally used by the organization to answer the questions, “why does the customer buy from us?” and each organization must answer that question, regularly, in order to stay successful.
For the HRBP, understanding what value is and where they fit in the value chain and how the products and services offered by HR are essential part of the value chain is the key to gaining the confidence and trust of their strategic partners. Value added services will vary from organization to organization but will generally have three basic components:
1. Formulation efforts, which includes the SWOT analysis, the strategic competitive advantage of the organization and the specific steps to achieve and sustain that advantage.
2 . Implementing the strategy, primarily through the appropriate allocation of resources; capital, human and technology.
3. Measure and evaluate the results to make adjustments or refine the strategy.
What can the organization do to develop and improve the strategic skills of the HRBP?
- Focus on enhancing HRBP competencies by emphasizing new strategic capabilities over standard processes.
- Educate the HRBP on the need to predict and adapt to changing business
- Connect the HRBP to the same information to help them keep pace with evolving business
- Improve HRBP business and financial
Job Rotation. Move people between HRBP roles and other functions to develop a more analytical and business savvy mindset. HR people who have had commercial experience have much broader perspectives and greater understanding of business challenges.
Business Education. Require HRBP’s to participate in business certification programs or receive MBAs. Develop quantitative skills and financial metrics as part of the “language” or HR.
Attract the best and the brightest. Work on making HR an exciting place to work. Focus the HR department on developing innovative capabilities to build a new generation of leaders, engage the talent of the organization and implement new technology solutions. This includes recruiting younger professionals into HR.