Strategy and HR are not easy to bring together. Even if this seems to work, the transition from development to implementation is a major challenge.

During the peak phases of the pandemic, HR was primarily concerned with initiating necessary measures as a crisis-resistant decision-maker to ensure business viability while at the same time taking heightened health precautions into account.

Currently, many top decision makers are now considering the future role of HR. CHROs themselves

  • expect HR business partners to use HR data and analytics extensively in their daily work, but only 42% of HRBPs are currently developing their data literacy (Insight222);
  • envisage significant changes to the HR business model over the next two to three years (McKinsey).

That´s certainly all well and good, but implementing an HR strategy starts differently! At this point, I will refrain from pointing out the PDCA cycle, the closed-loop management cycle and comparable methods and procedures. Attached, as an appendix to this post, please find links to in-depth blog posts on (HR) strategy, its implementation and HR transformation.

I focus on

  • the development of a strategic HR portfolio, and
  • the so-called Human Capability Framework.

Development of a strategic HR portfolio

Before starting to develop a strategic HR portfolio, there is a lot to do. In addition to defining the HR core strategy, HR-strategic fields of action must be determined – deductively and inductively.
With the help of benchmarks, external sources and best practices, by acquiring new skills and applying new practices, such as Design Thinking, Six Sigma and Lean, numerous options are developed for each field of action.

Now the paradox of divergent and convergent thinking takes hold.

Divergent in this context means identifying challenges and developing options for responses. Creating options usually leads to an excess of ideas and measures that scatter attention and reduce the quality of results.

Let’s assume that an HR department identifies 12 HR-strategic fields of action as part of strategy development and derives three best-fit activities from each of them – in practice, there are often significantly more! – then the result is 36 measures, projects, or initiatives that are due to be implemented, underpinned with KPIs, and continuously monitored for the achievement of goals. This happens in parallel to the operative business!

Therefore, convergence must now take effect. Convergence “transforms” many options into a few, strategically necessary activities, the implementation of which is ensured by focusing – discipline 1 at 4DX – of resources and measures.

Specifically, three analyses are target-oriented:

  • With the help of a SWOT analysis, identified best-fit activities are checked in the market context.
  • The primary gap analysis shows gaps between already ongoing and newly identified HR-strategic fields of action or best-fit activities.
  • The secondary gap analysis identifies gaps between strategic priorities and existing capabilities and skills.

These three analyses therefore act like filters in the context of convergence. Only those best-fit activities that have passed through these filters form the strategic HR portfolio and are due for implementation as part of the HR roadmap.

Human Capability Framework

Within the context of these above mentioned analyses, a framework takes effect, a framework in which individual options and activities are combined into patterns. This sets priorities, reduces complexity and focuses attention.
Dave Ulrich, in his recent publications, proposes an integrated human capability framework that provides a blueprint for the convergence and advancement of human resources.

This framework is divided into four paths:

Talent,

often called human capital, addresses what can be done to ensure the right individual skills, workforce or people. Current topics include:

  • Personalizing the work experience to give employees more flexibility about where, when, and how they work, which expands the critical DEI agenda.
  • Delivering an employee value proposition around believe (meaning), become (growth), and belong (connection).
  • Improving mental health and overcoming the challenge of isolation or loneliness by helping employees connect with each other.
  • Building both trust and truth so employees can become advocates for their organizations.
  • Defining work as tasks and not just jobs, matching skills to tasks.

HR’s job will continue to be helping employees fulfill their personal purpose through their work arrangements.

Organization,

sometimes called structure, governance, or culture, focuses on defining the organizational capability, workplace, or team. Focusing on organizational capabilities means:

  • Identifying the organization’s capabilities that deliver value to customers, such as agility, innovation, collaboration, and strategic purpose.
  • Establishing the right culture that delivers customer promises through organization actions.
  • Creating high-performing teams, ecosystems, and nerve centers in IT, purchasing, and supply chain.
  • Establishing policies (e.g., hybrid work) that respond to market conditions.

HR’s job will be to diagnose and deliver the right organization capabilities that respond to customer and investor requirements.

Leadership

emphasizes both individual and collective leadership. With less hierarchical organizations, leaders in the future will need to be able to

  • Care for, create a kinship with, and support all employees by being empathic, engaging, and empowering.
  • Influence less by position and more by relationships of trust.
  • Create future leadership by using their strengths to strengthen others.
  • Be accountable for both financial and human outcomes.

HR’s job will be to identify, coach, train, and develop diverse leaders who make others better.

HR Department

refers to the human resources function or department and the way human resources work is done. HR strategy implies that the HR department is upgraded to deliver results relevant to the strategy:

  • Transforming the HR department to ensure that it has a clear mission, governance process, and accountabilities.
  • Building the quality of HR professionals so that they have an identity as business partners and the competencies to be effective.
  • Creating clear accountabilities with line managers to deliver human capability.

HR’s job is to create an HR department, practices, and people who deliver insights that create value for others.

Conclusion

To date, HR has focused on talent in its HR agenda. However, the organization has a far greater impact on company results than individual talent. HR can be the architect for creating organizational capabilities.

HR adds value by knowing which initiatives in the four featured areas of talent, organization, leadership, and human resources are having the greatest impact on key business outcomes in the organization.

Appendix

To deepen this important topic – in general and witha view to HR in particular – I recommend a few previously published articles:

In the blog post “Strategic courage in VUCA times” I addressed, among other things, some guiding questions in the context of implementation.
In the blog post “Transformation: paths and results” I outlined the essential – also cultural – success factors of transformation processes.