Five Ways HR Can Enable Business Model Differentiation

Support functions like human resources are essential to the smooth execution of an organization’s strategy and business model, but too often they fail to deliver. This is not because HR professionals and leaders are ill-intentioned. Support functions have tremendous power to enable strategy, but unfortunately they can disable it too. Their impact depends on how the function is set-up, how it is led, and the mindset that HR professionals carry in their day-to-day work and decision making.

There are five critical “watch-outs” that can help ensure the HR function is truly enabling – not disabling – the organization’s business model.

Design for the Business Model

The only reason the HR function exists is to enable a business to deliver value to customers and differentiate. But sometimes, the HR function takes on a life of its own. The department may start to focus on its own set of priorities rather than the needs of the business. Make sure your HR function is set up to enable your organization’s business model.

Streamline for Ease and Efficiency

Examine the flow of work in your HR department. Most HR delivery models are broken down into sub-functions like talent, total rewards, employee relations, etc. This works well for the specialized work that HR needs to design, develop and deliver. It may not, however, be easy for HR’s customers to access or navigate. The end effect can be that HR groups or professionals stumble over one another in an attempt to deliver service. Explore ways to deliver HR services through integrated value streams that minimize hand-offs, while also applying lean principles. Waste will be removed and freed up resources can be reinvested in the company’s strategic work.

Focus on Business Strategy

HR functions spend time each year building an HR strategy that will guide the discretionary work of the function. Unfortunately, many of the HR strategies I’ve seen are focused entirely on HR itself, and not on the greater business. The consequence is that HR’s energy and resources are dedicated to things that matter a lot to the function, but less to the business. Granted, sometimes business leaders don’t know what they need from HR, but when HR is focused on functional priorities rather than business priorities, the function becomes disconnected from what really delivers value.

Bring Value

All HR professionals with whom I associate believe they are bringing value, but there is a tendency for HR to stay at arm’s length. This manifests when an HR business partner says to a client, “I can’t be at the second day of your restructuring work session because I have a staff meeting with another one of my client groups.” Or, “I don’t have the bandwidth to do the role mapping needed. I’ll see if I can get someone from Compensation to help out.”

Sometimes HR professionals need to roll up their sleeves and dig in with their clients to get business-critical work done. They must say “no” to other supposed HR priorities or responsibilities. This may create frustration for some people, but for those business clients of HR who are working through truly strategic issues (e.g., succession decisions, business model restructuring, significant change implementations, etc.), having their HR partners present, engaged, and working can make an essential difference.

Ensure Seamless Delivery

HR can’t be run like one cohesive team all the time. Because many of HR services are delivered by external partners, it is essential to set up linkages across the function to enable seamless delivery to internal clients. Make sure the right and left hands are working in concert. The notion of “here’s our program, go implement it” is just a bad practice. The two groups (the one designing and the one implementing) need to be coordinated.

Take the time to examine your HR function. Are you bringing real value to the delivery of your organization’s strategic business model? Or, are you stuck in your own functional priorities, working through disconnected teams and sub-functions? The most effective HR functions are the ones who can see the impact of their work in the business.

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