This presents a great opportunity for HR to move front and centre in the strategic debate. How can you take advantage of this?
HR in strategy-making
Pre-recession, research from strategy consultancy firm, Cognosis among top executives and managers in leading international organisations showed HR failing badly to contribute effectively to the broader strategy process. Finance, marketing, operations, sales, and even IT were seen to add far more value to the strategic debate, by a factor of between two and five times.
Five years on, not much seems to have changed. When it comes to strategy, CEOs still lean heavily on finance, operations and marketing. Many HR directors express their frustration at finding themselves bystanders in key commercial decisions; sometimes they aren't even in the room. This seems bizarre in light of the 'people' challenges confronting most businesses. Now, more than ever, to realise their growth ambitions companies must find and grow talent, develop their leaders, build their employer brand, breakdown internal silos and tackle falling levels of engagement and productivity. HR should be a key to growth and recovery.
In contrast, in too many cases recession seems to have caused HR to become even more inward looking, more mired in specialist issues, and more peripheral - out of touch with business' commercial needs.
How can HR play a bigger part in strategy, post recession?
I have always felt HR should wield more weight in the process of creating business strategy and turning it into action. It must secure that role now, as recovery gathers pace. But for HR to earn a place at strategy's 'top table', fully involved in day to day business decisions, it needs a different approach. Five practical actions can help:
1) Businesses need HR leaders who think strategically and act commercially: That means donning the mantle of business leaders, not just HR specialists, and championing leadership programmes across the organisation.
2) HR leaders must take their lead explicitly from the business' commercial agenda: That means building a broader and deeper understanding of their business and its challenges, and forging clearer links between these and the HR agenda.
3) The function needs to get far better at communicating and networking across the organisation: Breaking down silos, 'joining the dots' of strategy and building alignment - still an issue in most big organisations and a huge opportunity for HR to deliver tangible results.
4) HR needs far stronger analytical skills, both financial and operational: HR must learn to talk 'outcomes' and 'impacts', not 'processes' and 'outputs'. If you don't speak the language of the CEO, COO and CFO you will never be part of the core group - the real decision makers in most organisations.
5) HR must attend to its own development needs: This means training and developing HR talent in broader skills. Strategic thinking, commercial acumen, financial analysis and project management are the skill most in demand post-recession.
Most of this is not new of course; HR managers are well aware of the challenges they face in influencing the C-suite. What is different this time is the business context post-recession, and the unique opportunity that presents to reposition the function and seize real influence. It's an open goal - what are you waiting for?
Richard Brown (pictured) is the managing partner of strategy consultancy, Cognosis