Business Focussed HR Strategy

Having a clear direction, business model and strategy is simply not good enough. Taking people along with you in the process is essential.  So, building an HR strategy that translates how we use the processes we have in HR in combination with line management decision making to align people to business direction is fundamental for success.  Galbraith through his “5-star model” breaks through the complexity and seems to simplify this enough to provide a simple yet effective set of lenses to guide HR strategy formulation. We will call this the 5 people levers.

These levers are both important from a perspective it places but also the questions it allows us to ask.  Conversations through these lenses on HR strategy with the business strategy in the back ground deliver both credible business focussed discussion and clear actionable results that the business understands.

The 5 levers with their definitions are:

Lever 1: Work and structure

On the premise that ‘form follows function’ and that strategy should determine how work is structured, this lever covers hierarchical levels required, accountabilities, types of roles required, numbers of people required per role, the structure itself, and the philosophy that underpins the structure.  But these discussions need to be tailored to the company at hand and information flows and decision rights must be addressed first within the existing structure as these are seen to be key factors in the inefficient execution of strategy.

Some call this lever the “cardiac arrest lever”.  It is extremely powerful and can shift the organisation dramatically but can also bring it to a standstill.  The point therefore is to use this lever only when radical correction or alignment is required and then to do it swiftly with the related support of the other levers.

So, the question here is: what are the current gaps or risks and issues in this lever given where the business is going? What do we do about that? When do we do it?

Lever 2: Outputs

Outputs are measured through performance management. It is therefore necessary to assess the strategy on required outputs, targets and decisions and the tracking of delivery against strategy. Outputs are typically defined divisionally but dependent on cross-divisional collaboration for their successful achievement, so discussion should revolve around outputs, horizontal and vertical integration, and learning by tracking high and low-performing teams and people so that overall output can be improved.

Some refer to this lever as the tactical correction or alignment lever. It helps the organisation to align people to specific focuses that are more short term (yearly and quarterly based).  It is obviously pulled in partnership with other levers.

The question here is: what are the current gaps or risks and issues in the lever given where the business is going? What do we do about that? When do we do it?

Lever 3: Reward and recognition

This lever indicates that people should not only be paid at the correct level to ensure appropriate monetary motivation, but that beyond that, other more intangible motivators such as quality work relationships, the opportunity to influence decisions, challenging and interesting work, exciting work assignments and the opportunity to learn. There are several aspects like shares, benefits, bonuses, incentives (monetary and non-monetary) and actual guaranteed pay to be considered.

In general, most are very careful of this lever, but it could be used very successfully if used in a targeted and selective fashion.  It is obviously very powerful but can also lead to significant consequences on profitability and cost management.  If used too often it tends to lose its significant power.

So, the question here is: what are the current gaps or risks and issues in this lever given where the business is going? What do we do about that? When do we do it?

Lever 4: Competency and skill

Competencies are a combination of ability, skill and attitude.  The key question around this lever is not only what skills are required to deliver on strategy and whether or not these skills are in place, but also the need for development of competence and skill, and how these skills will be built e.g. on-the-job versus formal training and time allocations to these.  Competencies and skills need to be specific to the company, what it requires, why are these important, and how do they achieve it? In this lever the organisation has to make very specific choices on build or buy decisions. These are often influenced by the size of the gap, scarcity of the skill, cost to close it and time available.

The question here is: what are the current gaps or risks and issues in this lever given where the business is going? What do we do about that? When do we do it?

Lever 5: Culture, climate and engagement

It is clear that all five levers can be used interdependent from one another. If the quality of the previous discussions were good, the discussion of culture, climate and engagement should already be partially covered, with leadership and management playing a crucial role. It is however important to realise that culture climate and engagement affects all the levers and vice versa.

So, the question here is: what are the current gaps or risks and issues in this lever given where the business is going? What do we do about that? When do we do it?

The more consistently and coherently we use these levers to support the strategy and therefore align people to the business the better.  If we use these levers independently we send different messages into the organisation that will make it harder to achieve alignment and may lead to confusion.

A question that often crops up is that of leadership as a strategic lever. Leadership is most certainly one of the top aspects one needs to consider in all of the above aspects.

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