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Three Steps to Strategic Actualization For HR professionals, seeing one’s department become a strategic partner is the ultimate goal, and while some of us working in an international environment are closer to that goal, others are not so lucky. Most writings on the topic of HR assume that organizations already have a well-developed HR department, seldom do we come across one that reflects more of a how to guide, this piece is going to do exactly that. I have had a lot of jobs that required me to transform an organization’s personnel department into a functioning HR department and I must admit that the first few times were not easy. However, out of tribulation comes the chance for exploration, and those experiences helped me put together a framework that can better guide this transformation. The framework itself proposes a pyramid approach to transformation, emphasizing a strong HR administration base acting as a foundation for HC practices, which will then allow growth into Organizational Development. The pyramid approach puts one level as a priority before the other, which will make sure that organizations avoid the common error of skipping steps and building on shaky foundations, eventually leading to inefficient processes and an overwhelmed HR staff. But before an organization can start implementing this framework, it needs to make sure that the HR department itself is structured in a way that will allow for growth and advancement. This is not something that can be discussed in an article as each organization has a different structure. But if there is no room for hiring new employees that can be easily slotted or current employee tasks are distributed in a non-efficient way, then the department is headed for major frustration and is more likely to end up shooting itself in the foot.

Organizational Development

Human Capital

HR Administration

Step One: Building a Base Now I am aware that having HR admin as a base might strike you as strange, but HR admin is a central hub for many metrics that will be needed later on and will help in making decisions regarding the organization’s human capital. Furthermore it is at this operational level that an organization should decide on the policies that will govern its employees. This has to be the starting point of all HR transformations, and although organizations will most probably have other HC related processes, such as recruiting or training, they must take a step back and ask themselves the following questions: 1. Do we have a set of uniform policies that are transparent and well communicated? Do our policies create employee accountability and set a positive culture not simply one of compliance? Are we sticking to these policies or do we have many workarounds and exceptions that might impact our credibility? 2. Is data about our employees readily available? Are we keeping track of important information concerning our employees? 3. Do we have a clear organizational structure with clearly marked units and departments? Are we aware of whom the decision makers are at the front line level? Does each employee have a job description, corresponding and reflective title, and do they know what their role is? 4. Is there a channel that allows employees to voice their concerns and get feedback? What kind of communication does/should the department engage in? Having the answers to these questions is the first step in empowering the HR department to move forward. It will make sure that the department has spread its roots throughout the organization and employees are aware of the department’s role. Step Two: Managing Human Capital Once the basics are in place the department can now start playing a larger, decision based role concerning the management of human capital. This management is done through the generic four functions expected to be played by any HR department. -

Recruiting Performance management Training and development Compensation and benefits

Going into depth into the best practices of each of these functions is beyond the scope of this piece, however, at this level the HR department should begin by developing key processes that will increase the department’s decision impact. And by decision impact we are referring to the ability of the HR department to assist in making management related decisions concerning the organizations human capital.

This is where having a strong HR admin base plays its role, since to be able to make these decisions the department will need to rely on metrics to provide its input, and suggest programs to management emphasizing how they will impact the bottom line. Furthermore, having already established rapport within the organization the department will have an easier time rolling out new programs and will be met with less resistance. To have a higher decision impact the HR department needs to focus on one key factor in each process, this key factor has to allow the department to be proactive, cut costs, and ensure a higher level of performance across the organization. On the recruitment front the department should focus on planning, making use of metrics on turnover rates and expected business growth. This will allow for budget minimization allocated to sourcing, and focused recruitment efforts. To manage performance, the department will need to create a competency model that is reflective of the knowledge, skills, and attitudes needed by the organization. The HR department can do this by using the factor analysis method, where job descriptions are reviewed and commonalities arise. It is not enough to just have a competency model, but the department should incorporate them into evaluations and performance feedback; this will push employees to advance based on the organizations needs and perform at a higher level. Training and development closely follows performance management and should be based on the competency model. The department can take cost cutting measures by decided what employees should attend what trainings as opposed to having non focused organization wide course offerings. This is especially true if the department uses external training providers. As with training and development, compensation and benefits should also be tied into performance. The key element that will increase decision impact is a competitive study of market compensation and using that information to develop an internal grading system to help slot future hires and ensure equity. To recap the above, step two of the transformation deals with taking up 1 key process related to each of the 4 general HR functions that will allow the department to have a higher decision impact. These key processes are: Function Recruitment Performance Management Training and development Compensation and benefits

Key process Planning Competency model Targeted training Grade levels and market research

Needless to say, that all programs launched by HR should be directly tied to the overall organizational strategy.

Step Three: Strategic Actualization The final step in the transformation involves stepping up the HR department’s involvement from one that deals only with employees, to dealing with other departments and the organization as a whole. Of course to get to this step the department should have developed solid HC practices and mastered the previously mentioned 4 functions. To elevate itself to “Strategic Actualization” the HR department has to involve itself with 3 additional processes: Objective Setting, Business Process Redesign, and Career & Succession Planning. By Objective Setting we are referring to the HR department taking a lead role in assisting departments with setting Key Performance Indicators (KPI’s) as well as how these KPI’s will be measured. This will help set the entire organization on a strategic path, while holding managers and department as accountable for overall performance as employees. These KPI’s can also be incorporated in Managers’ and unit heads’ performance score card to measure their own performance, thus directly tying the performance of a department or unit to its leader. Business Process Redesign is concerned with streamlining the processes within other departments leading to higher efficiency and a possible restructuring of capital within that department. Finally, Career & Succession Planning will make sure that all key positions within the organization will have a trained employee who can readily assume the responsibility in the event of a resignation. General career planning will also make sure that all employees in the organization have a straight forward progression plan that can be tied into their performance. The Big Picture The transformation to Strategic Actualization is not an easy one at all, and will be impeded by the resources available to the organization as well as a strong strategic will to make it happen. But all in all having a strategic HR department can only benefit the organization as a whole and if this framework is implemented any organization can avoid stumbling in the process. And if the process were to be reversed and an HR department were to push for a greater strategic role then they simply need to follow 3 steps: 1.Have a strong HR administration that acts as an informational hub 2. Develop effective HC functions with key processes that create high decision impact; and finally, 3. Elevate involvement from the employee level to organizational wide management via organizational development.

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Three Steps to Strategic Actualization - 002