This article appeared June 2004 in Practicing: An On-line OD Network Magazine.
HR and OD professionals play a vital strategic role in organizations by facilitating growth, renewal, and vitality. In fact, experience suggests that it is more critical today than ever before for HR/OD professionals to have tools, skills, and opportunities to participate in the strategic discussions of organizations.
Avoiding the Rat Race
One vicious reality facing organizations today is the need to have a clear strategy. With the unlimited opportunities and choices out there, the challenge is making choices that support, reinforce, and align with your organization’s strategy. Without a strategy, the only chance for success is winning the ‘operational efficiency rat-race,’ which is the zero-sum game of cutting costs and enhancing productivity at a pace faster than competitors. More than one company has found itself drowning in the noise of ‘strategic static’—lowering costs and attempting to survive the rat race.
When HR/OD professionals participate in organization decision-making, they can use their OD and strategy tools to help leaders process information, resolve dilemmas, and make strategic choices. Encouraging leaders to clarify strategy does two things for the organization—
1. Prevents it from falling into the operational-efficiency rat race
2. Forces it to make necessary trade-offs
Making Trade-offs can be painful; not making them can be deadly
Since you cannot be world class at everything, the essence of strategy is making choices. It is about understanding what criteria differentiate you—is it image, durability, connectivity, customization, customer intimacy/service, research, distribution, etc. Strategy also drives all of the other choices an organization makes.
Making trade-offs is how a company sustains its strategy; they are how organizations choose to spend their limited resources. Companies who don’t make trade-offs scramble to find enough money, time, and resources to do everything they want or must do.
Leading the Charge
While HR or OD professionals don’t directly lead business units or control budgets, they do remind leaders as they make decisions about what to do, what to fund, and how to work about the ‘big strategic picture.’ Specifically, I have found that HR/OD professionals can help in the following ways:
1. Ask questions. Once strategy has been articulated, help the organization pursue its strategy in a disciplined way. Daily operational pressures, quarterly earnings demands, and new investment opportunities all tempt leaders into doing things not aligned with their strategy. HR/OD professionals who have their leaders’ trust and who ask questions can often remind leaders of the importance of making trade-offs.
Having worked in several organizations, I found the following questions helpful:
- What trade-offs are we struggling to make? Why?
- What tools can I use to expose the strategic issues and impacts of our choices?
- What questions can I ask to those around the table to have them consider the strategic impact of decisions not just immediate concerns?
- Does the proposal before us align with our strategy—should we even be considering this from a strategic standpoint?
- If we make this decision, how will it impact other aspects of our organization we believe are strategically critical?
- If we make this decision, are we copying our competitors and moving nearer to the rat race?
2. Facilitate strategy clarification. Volunteer to lead strategic planning and strategic discussions; at least, insist that you are part of the discussion so that you can fulfill the other strategic roles of HR.
3. Build linkages. HR/OD professionals have the savvy and skills to facilitate information exchange and decision-making by building cross-organizational linkages. Linkages occur wherever work between two parts of the organization must occur but where the formal structure does not delineate how the work gets done.
4. Align ‘People’ processes to strategy. Build and maintain human resource processes like recruiting/hiring, rewards, performance management, pay, etc. to reinforce the strategic work of the organization. HR processes must never be perceived as preventing the organization from fulfilling its strategy.
5. Develop your tool set. Build and share a set of organization design and strategy tools to use in diagnosing, analyzing, and addressing strategic issues. Some examples of tools are the following:
a. Value Offering
b. Sustainable, Differentiating Activities
c. Design Principle Development
d. Scenario Planning
e. Industry Definition
f. Segmentation
g. Mission/Vision/Values Development
As you can see, HR/OD professionals have a significant role to play in strategy; let’s equip ourselves to be ready for the opportunity.