We need an HR Strategy – What about the Business Strategy?

We all know that in order for the HR Strategy to be successful it is key that it is aligned with the Business Strategy. Now, what about the Business Strategy … How can we, from Human Resources, help in the process of defining the business strategy to make sure it is successful as well?

Have you found yourself in a situation where the Business Strategy was defined in a vacuum? A group of very senior leaders get together and decide “this is what our Company should look like by 2020 or 2025, or whatever. It might also be that they contract some very expensive consultants to help them with the process and bring in a key note speaker to talk about trends and predictions, how the industry is changing and what to expect regarding economic indicators, etc.

I am not saying that this is not a good process, it is … but it is not enough. The issue is that these leaders tend to be far removed from the people who are actually in close contact with customers, the people who know what is required in order to close a sale, in order to remain competitive. Their views tend to be tainted with the input received from a few of the people that surround them. The problem here, I might add, is that these people normally say what they think the leader wants to hear so, in many cases, leaders are oblivious to what is really going on.

What do we need to develop a great Strategy?

For me it is when you combine a good view of what trends and market dynamics are showing, with the values and vision of the company and you mix it with what the customer facing employees, your R&D team and  operations people know about what is going on and what might be possible. I know, you will probably say that I forgot about “Shareholder Value”, we can’t forget our Shareholders. Although I agree that the people that invest in our company are very important, I find that when you give them prevalence you end up missing the opportunity to deliver even more value. I find that cutting costs and showing better short-term profits is a short-sighted way of defining your future. The value will come, if you work on your Strategy well.

As Giles Hutchins‘ states in The Nature of Business:

 “The firm of the past is resolute in its goal – ‘to maximize shareholder return’. Over the last few decades, shareholders (and the investment market) have in the main become more interested in short-term returns. The goal of the firm of the past has thus increasingly become one of short-term profit, utilizing two main levers: cost reduction (bottom-line management) and value enhancement (top line growth).”

This is definitely not the way to define a long-term strategy and unless we want to be a “firm of the past” we need to change our approach.

My preferred method for working on the Business Strategy is to involve an eclectic group of people, from all geographies, functions and levels (yes … HR as well!). Get a group of people from Senior Leadership levels, Mid Level Management and Individual Contributors from every functional area in the same room and create the right environment for open interaction.

According to Steven Johnson in his TED video “Where ideas come from“, you get the most out of people when the environment is like a fluid network or a coffee house.

Everyone has the right to talk and express their ideas and the open and unstructured exchange will enable a better understanding of where we are, what we can do, and where we can go. Although we need to provide structure to achieve the goal of defining the strategy, ensuring that there are many opportunities for participants to interact fluidly is essential.

Giles Hutchins included the following quote in his book:

“Popular wisdom holds that the fittest survive, the strongest, leanest, largest, perhaps meanest – whatever beats the competition. But in healthy, thriving natural systems it is actually the ‘fitting-est’ who thrive. Fitting-est implies an energetic and material engagement with place, and an interdependent relationship to it.’  – Cradle to Cradle : Re-making the Way We Make Things, Michael Braungart and William McDonough.

It brings to the forefront the issues of engagement and interdependence, which are essential to developing a successful strategy. We need to ensure we engage employees from all over our organization and truly consider their opinions, and embrace the fact that to be sustainable we need to be interdependent. By involving all areas and levels of the organization in this process, we not only ensure that we have all the information we need. If we handle the process well, the participants will help drive the strategy because they own it and they will be able to translate the strategy into their everyday work helping the organization understand where “we” are headed and why.

This is also a way to nurture the organization or, as my husband Herminio puts it, “pastoral leadership”. If you take care of each employee, you provide them with an environment that fosters their growth and encourages empowerment and engagement, the result can only be one … success.



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2 thoughts on “We need an HR Strategy – What about the Business Strategy?

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