Why do HR Strategies Fail?

We put a lot of effort in designing what is supposed to be a great HR Strategy. A couple of years later we look back and have not achieved what we envisioned. What went wrong?

It is very frequent that we find ourselves implementing a great program (a new Talent Management process, a better Leadership Development program, an on-line Performance Appraisal system, etc.), we invest time and effort, and frequently a lot of money, and a few years later we find that we need to change it because it doesn’t work. Then we start looking for the next best program, we convince the organization that it is the perfect solution, we roll it out and a couple of years later we are again thinking of the next best thing.¬†Where are we failing?

If we want to prove to the business that Human Resources can add value to the bottom line, we need to define a robust strategy that will strengthen the organization and help develop the engagement and talent that we will need to deliver the business strategy. Easy to say … but not so easy to do!

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In my post “We need an HR Strategy – What about the Business Strategy?” I touched on the point that it was necessary to have all functions represented when defining the business strategy, including HR. If we are at the table with the business, we understand where the company is headed, what the challenges are and what will be required in order to achieve the business strategy, then we can start to work on our own strategy.

Are we growing? If so, how? Is it through mergers or acquisitions or is it through the introduction of new products or technologies? Is there a change in the business that will require different skill sets than what we have today? Are there economic threats that we need to prepare for? There is no specific set of questions, the only way to know what the gaps are is to be immersed in the business, know it in detail and work with your leaders to figure out the human aspects of what will be needed to sustain it.

We have to be careful not to fall into the trap of stating the HR Strategy as what it should not be. James W. Walker in his book Human Resource Strategy states the following:

“Some company statements of human resource issues are so broad that they could apply to any company and imply directional plans, challenges, or goals rather than the business-related issues. For example:

  • More effective utilization of our human resources
  • A more risk-oriented, high-performance organization
  • Managing a more diverse work force
  • Skills obsolescence”

He goes on to say that many times we define our “strategy” more like assumptions, and therefore miss the point which is to focus clearly on the issues that matter the most, the ones that will help drive the business strategy.¬†

In his book “The Nature of Business“, Giles Hutchins looks at the business of the future in the following terms:

“What could a firm of the future’s business vision look like? It could consist of the following aspects:

  • Strategic objectives where value and values are understood and interrelated.
  • Organizational culture rooted in well-being, diversity and clarity of purpose. One where individual and collective potential is encouraged through empowerment, local ownership and shared responsibility.
  • A business ecosystem where there is a sense of belonging to a community of stakeholders, each having clearly understood win-win synergistic relations within the diverse ecosystem.
  • Nature-inspired people, processes, products and places (infrastructure).
  • Reaching to attain positive holistic value (social, environmental and economic) for all stakeholders.”

I am not saying that all companies can relate to these, although more and more many organizations are including some of these aspects into their business strategy. If Human Resources is an active participant in the design of the business strategy, then we will be able to not only influence our leaders to think about these issues, but certainly it will be much easier to identify the components of our HR Strategy that will drive business results.

If you look at the list proposed by Hutchins, you can see that all of those are things that will help drive employee engagement. If we can develop the organization to think and act in those terms the only natural result will be a motivated and engaged workforce that will strive to achieve. And this can only deliver positive bottom line results.

So the key factor in ensuring that we develop a great HR Strategy is to carefully analyze the business strategy and extrapolate all the people aspects that we can influence. Then we need to assess where we are today and figure out the gaps. Only then are we in a good position to start defining what we will do to help drive the business.


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