HR: So You Want to Lead as a Strategic Business Partner?
For decades we’ve been talking about getting HR to the table. But what does that mean, now that HR has a seat, and how can HR continue to play a more strategic business partner role?
Business leaders are “looking toward HR for more insight, more innovative thinking, more strategic abilities to connect to and influence business strategy, writes Peter Cheese in The Rise of HR, a compilation of HR thought leadership sponsored by the HR Certification Institute® (HRCI®). (The e-book is available for free download.) “However, business leaders are still not fully confident in HR’s ability to play a bigger role.”
Cheese, the chief executive of the Chartered Institute of Personnel and Development, is not the first to make such a claim. Several studies back him up:
- 42 percent of business leaders believe their HR teams are underperforming or just getting by, according to Deloitte.
- As few as 15 percent of business leaders think that HR provides insightful analytics, according to KPMG.At the same time, it is believed that 70 percent or more of the total value in a business is intangible – people, skills, organization and competencies. This puts HR in the driver’s seat for driving business performance.HR Execution Is Critical
“HR has to change itself into an entity that exploits opportunities to directly and tangibly contribute to company financials,” note Kenneth J. Carrig and Aki Onozuka-Evans, also contributors to The Rise of HR. They believe that focus on execution is as critical as having the right strategy.
Carrig, a corporate executive vice president and chief human resources officer for SunTrust Bank Inc., and Onozuka-Evans, a principle at AOSIS Consulting LLC, identified three factors that make strategy execution possible:
- Alignment: This framework represents the strategic intent of the organization. “When the organization is united around a set of clear goals, performance expectations, culture and accountabilities, employees are more focused and able to prioritize activities that drive performance,” the authors write.
- Ability: In other words, human capital. “Ability, therefore, is more than building a collection of superb individual capacity; it is a company’s ability to optimize talent potential and overall human capital ROI, and create an organization-wide climate where people are encouraged and empowered.”
- Architecture: This the organization’s blueprint. “It is a framework in which individual and collective efforts are organized and maximized to yield the best outcome through focused, coherent and stable processes.”
Learning How to Lead
In “Stop Advising, Start Leading,” Kristi McFarland, chief people officer at New Seasons Market, writes that HR now has a seat at the table. What’s key now is learning how to lead.
Too often, HR opinions at the table are about “what other leaders should do, rather than a point of view on what’s right for the business – one that we can own and where we can be accountable for the income,” McFarland says.
She provides a number of leadership tips for the HR professional, including some limiting beliefs that are common in the HR profession. For example, many in HR believe that only those with big titles and revenue-generating roles are leaders.
“Hogwash,” McFarland says. “There is leadership talent in every corner of our organizations, and we miss out on innovative solutions by selectively listening only to those in sanctioned leadership roles.”
HR professionals have indeed made their way to the leadership table. Now, it is time for HR practitioners to act the part by aligning HR goals with business goals, driving performance through human capital management (HCM) practices and creating frameworks for sustainable success.