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HR STRATEGY
NEVER BREAK THE CHAIN Feeling undervalued and taken for granted in your organisation? Wesley Payne McClendon suggests that constructing a ‘strategic HR value chain’ may transform your standing in your business OVER THE past 40 years, the pedestrian view of HR has changed significantly. From its infancy as the personnel department, the function of managing human resources has shifted its perceived value as a transactional, administrative mechanism towards a transfunctional, business partnering support service. HR is almost at the stage of working in tandem with CEOs and senior leadership teams as a strategic transformer and trusted adviser. While HR practitioners have spent decades trying to crack the code to be able to operate at a strategic and commercial level, most find themselves stuck in the middle – at the bottom end of the value chain – even with the best of intentions. Executive education and short courses including big data analytics, performance management and leadership development can build capability within the HR community. Seldom, however, are these programs executed at their optimal strategic level and ROI validated with tangible business results. Critically, HR’s ability to embed itself in the process of strategic thinking and debate, business planning and decision-making is tantamount to achieving maximum returns.
From transactional to strategic The reality is that HR’s value and ROI potential is determined less by its technical skills and
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expertise and instead more so by the CEO and senior leaders’ perception of HR as being strategically indifferent, neutral or essential to achieving commercial business outcomes. While technical HR expertise and business acumen are required tools in which to operate at a strategic and commercial level, it is the perceived value of HR – outside the function’s span of control – that is more
Shifting perceived value With this reality as a backdrop, one of the key challenges for HR to move up the value chain is a robust process that assesses, qualifies and quantifies their perceived strategic value in the eyes of the CEO, senior business leaders and the broader organisation. And subsequently, it involves drilling down into the nuts and bolts of HR’s strategic capabilities, expertise
HR’s ability to embed itself in the process of strategic thinking and debate, business planning and decision-making is tantamount to achieving maximum returns likely to influence and determine where HR sits along a strategic value chain. Put more bluntly, senior leaders must, for all intents and purposes, consent to HR engaging with the business at a strategic and commercial level. Without this deliberate and explicit mandate, and ability to influence and change strategic value perception, HR are often limited to a transactional existence regardless of their capabilities and expertise to provide greater value to the business.
and influence, and the tangibility of their commercial outcomes. From this evidencebased perspective, HR can better understand and validate the requirements for changing and solidifying their strategic value.
Defining the strategic HR value chain The strategic HR value chain is built on the basis of three distinctive points along a continuum of value and commerciality for the purpose of providing a framework
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