By Mark Thomas who can be contacted at

www.mce.be 

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Can you say why your internal customers should use your services in no more than ten words? This is a critical question that all HR managers should be asking themselves in the face of relentless competitive pressures and organisational change. The continuous war of attrition being waged against excessive corporate costs means that all internal support functions have to demonstrate their worth. Whether you are in information technology, finance, internal audit or human resources, the name of the game is value added. Without it many traditional support functions will find the going tough as sooner or later they can expect to be asked some challenging questions about their activities and effectiveness.

In this context the HR function has to be able to ensure that it is providing a business-led people management strategy. So how can a HR function, audit its performance and begin the process of ensuring that its efforts are business focused? The difficulty for many HR professionals is that they frequently do good things for their organisation but fail to market the fact. In effect they often work on the mistaken assumption that everyone else is aware of their contribution. So for a first step the HR function needs to think about its approach to marketing. Simply challenging a HR function to define what it is offering the organisation in terms of business value added can provoke a heated discussion. Indeed the fundamental questions that are posed when developing any marketing strategy can provide a very strong focus for developing a value-added function.

A classic marketing failure for many HR functions is falling into the trap of confusing what they are offering or selling, with what their internal customers want to buy! It does of course happen in all functions. Witness the large IT departments that devote huge efforts and investment to systems that fail to deliver on the fundamentals. Or the finance department staffed by qualified professionals that runs a company into financial difficulty. HR is no different. It can very easily get caught up in debating the intricacies of competency frameworks or performance management systems and in so doing lose sight of the fundamental customer requirements.

Being business led means a constant alertness and sensitivity to the customer and their needs. It requires line managers and the HR professional to work together to uncover and develop the people management processes needed to compete and succeed in the marketplace.

As well as reviewing its service offerings the function also needs to examine its operating posture. What focus does the HR function have across the following dimensions:

>> HR focused - technical prowess?

>> Business performance focused?

>> Business team member?

>> Employee - welfare focused?

Too often an overtly HR technical focus at the expense of a business strategy can lead to the danger of chasing fads and fashions. Such behaviour provokes line management to criticise the HR community for being "out of touch" and not delivering relevant and timely people management solutions. One of the more recent traps that HR people have fallen into has been the explosion of competency frameworks that have in some cases become far too complex and burdensome for organisations to manage. At the same time a lot of reinvention occurs as organisations create their own leadership competency profiles, when in fact a selection of some common profiles and dimensions would suffice.

Too much focus or identification with employee welfare can also create an impression of a function that is overly concerned with making people happy or drowning the organisation in goodness, instead of focusing on creating a successful business. Clearly, motivating people and creating an exciting place in which to work is a real challenge and a vital role of the HR function. But HR also has to implement other tasks such as restructuring or downsizing, which may temporarily cut across those aims. Of course when the balance is well struck and you achieve a synergy between effective and innovative HR thinking and the business strategy, you ultimately get the best results i.e. people management solutions that help managers in their day-to-day tasks of delivering business performance through effective people management.

But being technically complex is not always the right solution. There are organisations that focus on executing some core people management activities through the power of simplicity. Keeping processes transparent and easy to operate means that such companies achieve a strong business led HR strategy without reverting to the latest trends. I know of one US-based global company that has two key guidelines for its people management. Firstly, it is a business that really does love talent - if the HR function is attracting great people it's doing a great job. Secondly, it delivers outstanding business results by a superbly implemented performance management process. Indeed this process which is facilitated by the HR function, but owned by the most senior management groups, actually does drive the business. So these two key activities, talent attraction and performance management, provide the function with enormous focus and clarity for their day-to-day work. It does of course do lots of other interesting HR activities, but the HR managers focus on these key drivers as part of a process of continuous improvement. It may not be overly complex or state-of-the-art, but it works and that's what having a business-led HR strategy is all about.

One other vital element in this equation is the role of the line manager. It is very easy to criticise the HR function for not delivering the right response but line managers also need to recognise their responsibilities to the business strategy and HR linkage debate. They also need to recognise the potential role and contribution that a strong HR function can make towards business performance.

The relationship is quite clear - the business strategy is about setting the wider financial and market goals, whereas the HR strategy is concerned with fundamental questions about how the business wants to manage people in order to deliver these strategic goals.

These questions are:

>> What type of people do we need (skill sets, attitudes and motivation) to deliver the business or organisation goals?

>> How and where do we attract these people?

>> How then do we want to assess and measure the performance of our people?

>> How do we want to reward them?

>> How do we want to train and develop them?

These high level questions need to be asked of any senior management team as part of developing the HR strategy. The responses set the context for the HR function to go away and, through the application of their technical competence, develop and deliver the various HR processes to the organisation.

Clearly, now and in the future companies are going to be placing more emphasis on managing knowledge and talent. This is going to force many companies to develop a stronger linkage between their business strategies and people management. In some people-intensive businesses such as software, we are already seeing that the people equation is almost explicitly linked to continued business success. Financial markets in their valuations are showing everyday indications of the shift toward intellectual capital, and to a world where owning ideas is now becoming more important than owning physical assets. For both the HR professional and line manager the challenge is there - get smarter in your people management or die. To the enlightened the new world awaits.

*Reprinted by permission of the editor MCE online.