The Hindu Business Line : HR becomes the strategy!

HR professionals have spent the last decade and more debating about how HR can earn a seat at the strategy table and make for a strategic partner. It is, of course a journey that will continue, hopefully, with a sense of contribution from the HR profession and professionals.

As we take stock, there are new challenges and opportunities. Suffice it to say that times could not be better for HR. People-related challenges remain among the top priorities in the CEO's agenda globally. Be it creating a talent monopoly, encouraging employee engagement, developing the leadership bench, culture building or enhancing customer-focus, it is all about people and the HR agenda.

The agenda so far: Becoming a strategic partner

As strategic partners, HR professionals have been called upon to design high performance systems and processes to facilitate line managers execute the business strategy. While these were conceptually well-understood, they fell short in execution. In the process, a couple of things happened. One, HR professionals went into a "best practices mania" and picked up many HR practices from other companies and tried to implement these in their organisations with mixed results. Realisation dawned rather late that what was a best practice for one organisation was not necessarily a best practice for another. Second, HR professionals designed certain systems and processes but did not examine their relevance to the company strategy. These failed the "alignment test".

Part of the problem was that HR professionals recognised rather late that "charity begins at home" when it came to focusing on building competencies. While establishing competency programmes for the organisation, they forgot about honing their own competencies. Once recognised, efforts were made to design a comprehensive HR competency model under the aegis of the Confederation of Indian Industry and the National HRD Network. Many organisations have embraced this framework and HR professionals validate their competency against it.

The agenda going forward: HR becomes the strategy

The emerging agenda for HR professionals is radically different. It involves helping business leaders recognise that HR is the strategy! HR as a strategy is not to be interpreted in the narrow terms of the HR function. In essence, it means that human capital strategy becomes the business strategy. And every other piece of strategy would revolve around human capital strategy as a nucleus.

When Human Capital strategy becomes central to an organisation's success, growth and long-term competitiveness, we will be able to celebrate the arrival of the new leadership agenda that acknowledges HR as the strategy. Let us look at the three key ingredients of success: Innovation; Leadership; and Customer Delight. Organisations need more than these three, but these are the prime movers and differentiators.

Innovation as a prime mover

Gary Hamel commented that organisations need to out-innovate in order to out-compete. Innovations can happen in all spheres of an organisation's operation. Products, processes, strategy and business models and, perhaps, even management philosophies all constitute domains for innovation. While enough and more has happened in the arena of products and processes, there is vast scope in the domains of strategy/business models and management thinking. Building the capability for speedy innovation and ensuring a robust framework for dreaming and drumming up imagination and innovation is a huge challenge and an opportunity. Google and Apple, for example, have demonstrated the ability to tap into this human capital of imagination and innovativeness for establishing market leadership and superior business value for various stake-holders.

Leadership as a prime mover

Leadership is perhaps one of the most researched and least understood subjects. There are still debates about leadership in terms of whether it is nature or nurture, style or competency and whether it is position or action. Over the last decade , there has been a reasonable consensus that leadership is more a competence and capability that organisations need to build and well thought-out competency frameworks can be of value in this process. More recently, the concept of the "Leadership Brand' has caught the attention of HR and business leaders alike. In the past, organisations built businesses and profits on product brands and firm brands. New thinking based on research revolves around building a leadership brand as a source of lasting competitive advantage.

Customer delight as a prime mover

Delighted customers mean more customer advocacy, stickiness and more revenues. But the Dr Kano model has also taught us that what delights customers today becomes a baseline expectation of customers tomorrow and when that happens, customer delight becomes a moving target. More than training modules, it takes human ingenuity to activate spirited customer-delighting actions. Marriot Hotels and Disneyland are evidence to human capital capability.

Together, leadership, innovation and customer delight represent the three spheres of human capital that constitute strategic advantage for organisations. Having looked at the "next agenda" for HR in ensuring that HR becomes the strategy, let us focus on what will it take HR to deliver this strategy. I would like to offer a framework that will assist HR in meeting this tall expectation.

Delivering the new agenda: 7-E framework

Since the next agenda follows from being successful in the previous agenda, of being and becoming a strategic partner, the new agenda will extensively draw upon the resourcefulness of HR professionals as strategic partners. The 7-E framework will provide a vehicle for moving towards the new agenda. This basically represents two dimensions of HR professionals' capability, viz., self-management and stake-holder management. At the centre of these two dimensions is the professional integrity of the HR professionals. I call this "edge."

Self-management capability

HR professionals will do well to reflect on three aspects of their own self-management that relate to gaining confidence, competence and credibility.

Expertise: By expertise, I mean more than knowledge and skill. Expertise emerges when knowledge and skill are leveraged in the organisational context. Professional practices in the HR domain are changing fast and making them high-performance people systems requires contextualising the same. A deep sense of organisational culture and values, relationships and resources help HR professionals turn their knowledge and skills into expertise that business leaders respect.

Three key aspects to be kept in mind while choosing an HR system or process are its implementability; business impact; and cost.

Experience: Experience has its distinct advantages in managing oneself professionally. Of course, the right kind of experience is a must. Earlier, young HR professionals had to seek mentoring from experienced seniors with appropriate depth in the ever-growing facets of HR. We often come across misguided professionals who fancy corporate roles and assignments and in the process miss out on critical experience that only unit-level HR operations can offer. A stint in field sales or factory operations can also be a great leveller and helps appreciate business nuances better.

Energy: New agenda means a lot of sweat. Keeping fit, being cheerful and ready-to-go are essential ingredients of high energy. Highly successful and seasoned HR professionals have a high level of energy. When one is energetic, it is palpable in different ways. Energy is visible when you talk and when you listen. It is also visible when you act. Many competent HR professionals have lost out simply because they did not realise the importance of high energy and did not do anything to sustain it in the long haul!

Stake-holder management capability

The new agenda for HR calls for extra-ordinary resourcefulness on the part of HR professionals to manage the stake-holders who need to embrace human capital strategy as pivotal to executing their business. Key aspects of this capability involve Execution; Expectation Management and Engagement Framework.

Execution: In successful organisations such as Dell and Southwest Airlines, it is generally believed that strategy is execution! HR professionals have long been criticised for suffering from what I call the "Pussycat Syndrome". Like the pussycat that started out for London to visit the Queen but finally settled at threatening the little mouse under the chair, many HR professionals dream big and deliver little. And one can always attribute myriad reasons for poor execution. What is important is to build a reputation based on flawless execution of the plans and promises made.

Expectations management: Stake-holder management requires anticipating and analysing expectations from multiple stake-holders. Gone are the days when one could afford the luxury of serialised priorities. Welcome to the decade of simultaneous and competing priorities! HR professionals must learn to recognise strategy-enhancing demands and differentiate them from status-enhancing demands. The latter can be more enticing but the former is builds credibility.

Engagement framework: Being a strategic partner calls for a formal engagement with business leaders and participating in their business agenda. When we talk about the new agenda where HR becomes the strategy, HR professionals need to play a significantly proactive role in designing and defining an agenda around organisational capabilities that business leaders need to build and deliver. This engagement model is very different from the one of yesteryear.

Delivering HR with professional integrity, Edge that is: Building capabilities in both self and stake-holder management requires a dose of Edge. Therefore, this is at the centre of the other six capabilities HR professionals need to build. Edge is the professional integrity that becomes a hallmark of a capable HR professional. It is about standing up for certain well-articulated values and is not negotiable. This is what makes the rest of the business leaders sit up and listen to the HR leader. This earns them credibility, respect and resources. Without it, the remaining capabilities do not produce their potent value. With it, the potent value of these capabilities becomes stronger and longer lasting.

Preparing for the new agenda

If the new agenda is ensuring HR becomes the strategy, competent HR professionals must ensure that strategy discussions centre on people processes and capabilities. Human capital capabilities such as leadership, innovation and customer delight have to become business agenda and drivers for competitive advantage. When HR professionals accomplish a shared mindset around these capabilities as drivers for success and critical pillars for distinct and difficult-to-copy competitive advantage, we can claim to have realised the new agenda.

Well, every giant leap begins with a small step in the right direction. Becoming a strategic partner was the small step. The new agenda will represent the giant leap for the HR profession.

(The writer is the Executive Vice-President and Chief People Officer, Symphony Services Corporation. He can be reached at mahalingam.c@symphonysv.com)