· Features

"A business only needs one strategy"

Stephen Bungay on HR, communication and strategy

Bungay on: HR

“HR is much more varied than any other function. The finance function, for example, has a set of core skills, and you’ve either got them or you haven’t and they’re taught. There’s a minimum below which nobody sinks. But in HR, it’s not clear what that is; there’s not a set of core skills everyone can learn.

HR has evolved so much over the years. I remember the time it was personnel, which then became a bit more cuddly and known as ‘HR’. HR covered two basic areas: operations, process, hiring, firing, paying, lots of nitty-gritty stuff, keeping the engine oiled and moving. It attracted people who were good at management.

The other side of HR was about developing people. That introduced a different range of people coming from different areas. Now that bit is almost separating from ‘old HR’ and you get job titles like ‘talent development’. It’s moved from personnel to HR to talent, which is a stupid word to use; it suggests some people have talent and some people don’t.

The best HR people I’ve met have been extremely impressive. They’re characterised by the wisdom of the great director, people judgement, a sense of interpersonal dynamics, an ability to go in and read what’s going on in a boardroom, an understanding of what the business needs are, an ability to make tough calls and to think through what skills need to be developed. The best HR people do that by their own judgement; they don’t need some list of competencies.”

Bungay on: Banks post-crash

“We’ve created situations where it is possible for individuals to use organisations for their own purposes, which is one definition of corruption. You can optimise yourself as a trader in a bank, and we’ve set up incentive systems that more or less tell people that’s what we want them to do.

These processes continue because of vested interest around incentive systems and the belief that the only thing that motivates anyone is money, which is false.

The regulators are busy controlling what they can control, which is the stuff that doesn’t matter, and ignoring the elephant in the room, which is moral corruption. We’ve invited these self-optimisers in, and still have [processes] in place that are encouraging them to self-optimise.”

Bungay on: Communication

“One of the common characteristics of the great commanders from military history is they were all superb writers. They were able to put their wishes down in clear, concise and unambiguous prose. The standard of writing in business today is appalling and it’s getting worse as it gets easier. In the old days it was costly to send a memo.

Now, you shoot off emails which mean nothing. You create noise. Organisations have got extremely noisy. And the noise doesn’t only waste time, it creates confusion and makes it close to impossible to pick up the signal. Create an example by shutting up. Think before you get tapping. There ought to be writing classes for people [leading companies]. It’s a discipline.”

Bungay on: Strategy

“How many strategies do you think a business needs? One. Strategy is about making resource allocation decisions to gain a competitive advantage, in an environment where there are winners and losers. The entity that needs a strategy is competing with something else; that is what defines a business.

A corporation has multiple businesses, so might need a strategy for each of them, but by talking about HR, finance or legal strategy, who are you competing with? Are you competing with each other? Is IT your enemy?

If you’re all pulling together, why don’t you work out what contribution you’re going to make to the business realising its strategy, and not produce another one? I don’t see that happening much.

What is your business trying to achieve? The issue is: how do we contribute to the business’s strategy? The two critical resources that a business has to deploy to build capability are money and people. If you’ve got a good business plan, you can usually get some money. The scarce resource is people.”