Tool 3. AN HR STRATEGY FRAMEWORK

About This Tool

Over the past decade, "HR Strategy" has become one of those often used and abused terms. Everyone talks about it, but not everyone has a good picture of what it is, and even fewer are really good at it. As a result, there are many opinions about what it is and isn't. To get maximum value from this particular tool, it'll help to understand the key tenets that underlie it:

• An HR Strategy need not be elegant or over-engineered to be effective
• It doesn't exist for the sake of employees or for the sake of the HR team
• It is not about cool, leading edge solutions in search of problems
• It must focus on and drive to results, not processes or programs
• Its chief purpose is to help the organization execute its business strategy

Essentially, an HR Strategy adds value when it helps an organization develop and leverage the capabilities and competencies needed to execute the business strategy. In doing so, HR also helps build the intangible assets of the company that often lead to higher market value.

Using This Tool

This tool does not focus on HR structure and delivery. Those are indeed important elements in terms of driving HR's cost-effectiveness, cycle-time and service quality. As a result, they should be considered and planned for once the HR strategic plan is defined. The tool's primary focus is on strategic decision-making, linking HR and Business outcomes, and having an impact on the company's ability to execute.

It's important to be aware of several traps that HR teams can fall into when devising their strategy. First, the soundness of the HR strategy will be directly related to the soundness of the business strategy. So HR must take steps to influence the formulation of the business strategy. Secondly, what management and employees want HR to be may well differ from what HR needs to be in order to drive execution. HR can win that debate only if it has focused sharply enough on the needed business outcomes. Lastly, the HR strategy should not assume that existing HR resources will be able to implement the strategy. The HR team itself may have to be retooled to have the impact it needs to have.

This tool is most effective when used in conjunction with the other tools in this module - Business Strategy Framework, SWOT Analysis, and Strategy Planning & Analysis.

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