Practicing Strategic Human Resources

Strategic human resource management

involves a future-oriented process of
developing and implementing HR programs
that address and solve business problems
and directly contribute to major long-term
business objectives.
HR management has changed dramatically
in recent decades. It was once largely an
administrative function focused on day-to-
day responsibilities such as employee
recruiting and selection and managing
employee benefits. Changing labor market
conditions and new business thinking call
for HR business strategies that include
recruiting and retaining the right people, as
well as providing ethical and cultural
leadership.
Strategic planning presents great challenges
and opportunities for HR professionals.
Nearly all HR leaders in the largest global
companies are involved in strategic
decision-making and participate on the
organization's strategy team, and a majority
of HR professionals report that strategic
planning is part of their function. In contrast,
HR professionals in many medium and
small organizations are not often involved in
organizational or functional strategic
planning. Consequently, to achieve long-
term strategic HR objectives and to be a key
player in the organization's strategic
planning process, some HR departments
may need to overcome stereotypical
negative views of the HR function.
Benefits of HR Strategic Planning
The closer the alignment between HR and
an organization's overall business strategy,
the better the company's ability to anticipate
and respond to customer needs and to
maintain competitive advantage. Rigorous
research, planning and development
involving workforce culture, behaviors and
competencies promote the successful
execution of business strategy.
Particular benefits of HR strategic planning
include the following:
 Avoiding costly and disruptive surprises
that interfere with achieving goals.
 Addressing key issues in a timely
manner to avoid crises.
 Promoting employee productivity and
overall organizational success.
 Providing a sense of direction to
positively affect how work gets done.
 Keeping employees focused on
organizational goals.
 Providing a strategic focus to guide
training and development initiatives.
  Giving leaders tools to help focus and
implement their strategic initiatives.

Developing a Strategic HR Plan

HR's role includes developing a plan of HR
initiatives to achieve and promote the
behaviors, culture and competencies needed
to achieve organizational goals. Results-
oriented goals broadly include the
following:
 Correctly assessing staffing and skills
needs and keeping training up-to-date.
 Developing and maintaining competitive
pay and benefits.
  Managing performance and designing a
rewards system that keeps employees
motivated. 
 Knowing what competitors are doing to
recruit and retain talent.
 Providing training, including ethics,
which reinforces corporate values.
The strategic planning process begins with
four critical questions:
 Where are we now? (Assess the current
situation.)
 Where do we want to be? (Envision and
articulate a desired future.)
 How do we get there? (Formulate and
implement a strategy and strategic
objectives.)
 How will we know if we are on track
toward our intended destination?
(Establish a mechanism to evaluate
progress.)
The following sections examine each step in
greater detail.
Step 1: Assess the Current Situation
Being a strategic business partner means
carrying out HR activities with the long-
range goals of the organization in mind. To
do this, HR professionals must do the
following:
 Understand how the various
organizational components interact and
recognize the long-term implications of
HR decisions. The impact of HR
decisions must be thoroughly researched
and analyzed before changes are
implemented.
 Have a firm grounding in business
basics, including finance, marketing,
sales, operations and IT. These skills
help with budgeting and with
 maintaining a workforce with the correct
mix of skills.
 Develop and exercise analytic skills
directed at "the why" as well as "the
what." This may mean spending more
time on so-called translational work
(such as coaching business leaders,
planning and implementing HR practices
that effectively execute strategy, and
helping teams manage change) than on
transactional work (such as recruitment,
training, human resource information
systems and other traditional HR
functions).
 Conduct a strengths, weaknesses,
opportunities and threats (SWOT)
analysis of their organizations. The
SWOT approach offers a clearer picture
of customers, markets and competitors.
Step 2: Envision the Future
 When the HR strategic planning team
has fully evaluated the current situation,
it should consider what the ideal future
would look like from an organizational
perspective. The question "Where do we
want to be?" can be answered and clearly
articulated by creating statements of
vision, mission and values. A vision
statement provides a description of what
an organization wants to become or
hopes to accomplish in the future. An
effective vision statement paints a mental
picture of the organization's preferred
future that is inspirational, aspirational,
compelling and concise. A values
statement describes what the
organization believes in and how it will
behave. This statement can serve as the
organization's moral compass and should
be used to guide decision-making and
assess actions taken.
 Step 3: Develop Strategic HR Objectives
Setting strategic objectives is an important
part of the strategic planning process.
Therefore, these objectives must be aligned
with the organization's mission, vision and
overall strategy. Strategic objectives will
vary from organization to organization. o
identify whether strategic objectives have a
solid foundation for success, HR should
consider the following questions:
 Have the benefits of obtaining the
defined objectives been outlined and
communicated?
 Are the strategic objectives relevant to
the organization's position in the external
market? For example, do they consider
competitor positions, organizational size
and financial strength?
 Do the strategic objectives recognize the
organization's strengths and weaknesses?
  Do employees throughout the company
understand how these objectives affect
them and how they contribute
independently and collectively to the
defined objectives?
 Are the strategic objectives realistic and
feasible? Unrealistic objectives typically
result in disappointment for all involved.
 Have timelines for benchmarking
progress and targets for completed
objectives been set?
 Will the organization realistically be able
to identify the success or lack of success
in the accomplishment of strategic
objectives in some quantitative fashion?
Step 4: Monitor and Evaluate
The final step should be establishing a
mechanism to monitor and evaluate progress
toward the achievement of strategic
objectives. Most organizations conduct
annual or quarterly strategic reviews for this
purpose. These reviews do the following:
 Determine whether the organization is on
track to achieve key objectives.
 Provide the opportunity to identify and
adapt to significant internal or external
changes that affect the strategic plan.
 Update annual action priorities.
Some organizations may find that systems or
tools such as balanced scorecards,
benchmarking and dashboards are helpful
for keeping focus and monitoring results.

Ask ‘What,’ Not ‘How’

Thinking strategically is an elusive concept
for many managers. Simply put, it is a high-
level decision-making skill. It involves
recognizing trends and challenging
assumptions while maintaining a global
view of situations and an affinity toward
embracing change. It requires appreciating
the organization’s or department’s current
situation while looking for ways to
capitalize on opportunities. Strategic
thinkers ask what can and will be done to
move forward, not how a project will be
executed. “What” is strategic; “how” is
tactical.
Benefits
Whether you are working solo or as a
member of a cross-functional workgroup,
strategic thinking allows you to focus on
what is truly important.
Organizations that systematically encourage
strategic thinking are ready for the
unexpected and have the ability to adapt
more easily to unforeseen changes. At the
managerial level, strategic thinking
guarantees that focus and scope will become
more targeted, allowing for more-purposeful
activity. And, strategic thinking gives
employees the ability to make decisions and
understand how their decisions move the
organization forward.
As a manager, strategic thinking will help
you stand out to senior-level decision-
makers and become more valuable. Your
decisions and recommendations will be
recognized and appreciated as the
foundation for organizational efficiency.
Strategic thinking also will help you make
the most of your time at work.
Super Strategic Strength
Whether you’re an experienced strategic
thinker or new to the idea, you must use the
skill or risk losing it. The following are
some exercises to assist in the development
and maintenance of strategic thinking:
Think what, not how. If you find yourself
thinking about how to accomplish a project,
stop. Change your perspective and think
about what must be done to meet your
objective. Asking “how” or focusing on the
minutia of basic needs and outputs is a
tactical exercise. When a group devolves
into how something will get done before
thoroughly exploring what members want to
accomplish, the discussion will lead to
rehashing past history or worrying about
potential obstacles, thus hindering strategic
progress.
Ask the right questions. Generate strategic
conversation by asking higher-level
questions, such as “Where do we want to be
in the next three years?” and “What must be
done organizationally to accomplish this?”
By focusing on the larger picture, group
members’ thinking will automatically
become more strategic.
Observe strategic thinkers, ideally in
team environments. How do they approach
challenges? What types of questions do they
ask? How do group members respond? Once
you have had the opportunity to observe a
strategic thinker in action, emulate the
behavior.
Learn from history. Examine a past
situation where strategic thinking was
required. Consider 10 ways it could have
been approached differently and alternative
outcomes that could have resulted. If you
have difficulty coming up with 10 ways, ask
what additional information is necessary,
acquire this knowledge and start again. You
will begin to think strategically and develop
new, tangible ideas that may be put into
action.
Look toward the future. Consider a future
challenge where strategic thinking will be
required. Repeat the exercises above.
Keep up with current trends. Subscribe to
trade journals, join groups, attend
conferences, or sign up to receive automatic
e-mails on a topic. When you are informed
about your external environment, you will
be better-equipped to respond to your
internal environment.
Become involved in planning activities.
Join a strategic workgroup within your
organization, serve as a board member in a
nonprofit organization, or take on a
leadership position in a professional
association. By immersing yourself in
situations that require strategic thinking, you
are bound to develop these skills naturally.
Encourage Strategic Thinking
If members of your team or workgroup lack
strategic thinking skills, it can be difficult to
generate a strategic discussion or decision. It
then becomes your duty to enhance their
understanding of strategic thinking for
everyone’s benefit. So how do you go about
instilling these skills in others?
For a boss or management:
 Ask leading questions to enhance the
quality of decision-making.
 When discussing a decision you have
made, present the full scope of the
process, including research
methodology, background information,
various alternatives, and desired and
expected outcomes.
 Model strategic thinking behavior.
For peers:
  Increase knowledge by sharing relevant
research findings and articles.
 Ask leading questions to challenge
conventional thinking, such as “Are there
other options we haven’t considered?” or
“What must we do to take this idea to the
next level?” or “Why?”
 Model strategic thinking behavior.
For staff:
 Create opportunities for employees to
become more involved in situations that
require strategic thinking.
 Make strategic thinking a valued part of
departmental culture.
 Measure strategic thinking behavior
during the performance review process.
 Model strategic thinking behavior.
By approaching situations in a strategic
manner and inspiring others to do the same,
you will create a culture of strategic
thinkers, allowing you and your team to
become critical players in the organization’s
future success.