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Ensuring HR has Real Business Impact – Now’s the Time

February 12, 2014 - In Featured, Strategic Change and Organisational Effectiveness - No comments yet

The UK and US economies seem to be picking up and others are looking a little less sick although there is much more to do, including driving policies to build genuine sustainability and promote long term growth.  The financial crisis curtailed business investment and focused organisations on cost cutting and risk management.  The crisis also happened after years of short-term focus on results that prevented in many organisations the continuous investment in organisational development for sustainable high performance.

In 1997 Dave Ulrich’s article ‘A New Mandate for Human Resources’ was published in the Harvard Business Review.  In the article Ulrich observed that many of the ‘traditional forms of competition – cost, technology, distribution, manufacturing and product features – can be copied’ and that the only competitive weapon left is organization’.  It is this assertion that caused Ulrich to call for the transformation of HR approximately 17 years ago.

Where Are We Now? 

Certainly many organisations have set up shared service centres for HR administration and the title HR Business Partner is common place, but what do the non-HR communities in our organisations think, especially line managers?  We suspect it varies considerably, but some of the published survey findings suggest that the transformation of HR is incomplete.

In early 2009, some few months after Lehman Brothers collapsed, a Roffey Park survey found 81% of managers in a population of 1050 described HR as ‘out of touch with the rest of the organisation’; 57% said HR was reactive and 11% said HR produced relevant and timely initiatives.  Last November 2013, HR Review carried some data from a Hay Group survey which indicated relationships between line managers and HR could be better.  HR Directors believed that dealing with day-to-day enquiries was taking one third of their time and they were doing too much hand holding.  44% of line managers reported feeling disempowered about people management and over 50% did not think that they had sufficient support from HR to help them be a good manager.

Apart from the relationship issues that this data reveals, there is a sense of excessive ‘fire-fighting’.  It raises the question, how well is HR focused on the organisation as a whole?

One might also ask, how well are leading executives focused on sustainable organisational effectiveness.  Ulrich was clear that ‘the primary responsibility for transforming the role of HR belongs to the CEO and to every line manager who must achieve business goals’.  This is because line managers ultimately have to account to shareholders and customers, among other stakeholders, for business results.

New Business Organisation Focus

Now, with improving economic conditions, a new rejuvenated push to improve the effectiveness of organisations needs to be the joint work of leading executives and HR.  All managers are responsible for the results of their people, and so all managers ultimately need to play their part in building the organisation to sustain success.

Integrated Approach         

But how can there be an integrated approach to improving the organisation’s effectiveness?  This is where HR can demonstrate their value and use their professional knowledge as the experts in organisation.  HR needs to develop or adopt a model for assessing organisational integration and effectiveness so that opportunities for performance improvement can be prioritised and the implications of change successfully managed.  We recommend our Model for Organisational Integration.  This views the organisation as an open system, subject to the forces and pressures in the external environment.  Within the organisation there are five domains:  business purpose and direction, culture, organisation structure, processes and systems and people.

Organisational effectiveness, the ability to maximise results in the external environment, arises when culture, organisation structure, processes and systems and people are aligned to business purpose and direction. The model can be used to assess and plan change and monitor implementation so unintended consequences can be prevented.

Effective Leadership

Armed with a model that will enable the organisation to be developed in an integrated and coherent way, HR can help by improving leadership and management.  To bring about successful change, three essentials need to be established with the collaboration of HR and line management:

Effective leadership at the top of the organisation is about defining a purpose and vision.  These need to be underpinned by values or guiding principles about how the people in the organisation will go about achieving their objectives.

HR can help executive leadership in developing purpose, vision and values and assist managers communicate them to their people in a meaningful way to encourage engagement.  Building an organisation that has a unique character and a differentiated brand is as much about how it does things as what is achieved.  This is often the key to meeting customers’ expectations.

Management Quality

HR can help managers be more effective by ensuring that the organisation attracts and selects people who are predisposed to be effective managers.  A positive view about people and the manager’s role, accountable for generating results by others, are critical attributes if managers are to lead, build trust and engage their people with the organisation’s purpose and the work to be done.  HR can ensure managers can manage people competently by making sure that they have the development and training to undertake a management role.  Empowering managers to manage their people effectively will help high engagement as line managers have great influence on whether their people are engaged in their work and the organisation’s purpose.

HR Guidance:  Coaching High Performance, Teamwork and Innovation

Managers need support and guidance from HR in improving their coaching of high performance.  Improving the capabilities of staff is one of the most important things a manager can do.  HR also needs to work with line managers in developing teamwork.  Effective leaders build teams, teams do not build themselves.  Teamwork is one of the ingredients of a high performing organisation and a source of innovation.  Teamwork should be cultivated across the organisation as well as within organisational units so that co-operation is fostered for efficiencies across business units and between departments.  Team work provides the basis for people creating new ideas and innovations.

Monitoring Alignment

HR need to be constantly assessing the progress of organisational development and management effectiveness to ensure everything is operating in a mutually supportive way.  Here the organisational model will help in testing the alignment of culture, people, structure and processes and systems to business purpose and direction.  Remember Peter Drucker’s comment that ‘culture will eat strategy for breakfast’, highlighting a classic example of non-alignment.

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