Why HR Needs to Play a Key Role in Business Leadership and Strategy

Why HR Needs to Play a Key Role in Business Leadership and Strategy

Whether or not we like the way SHRM rolled out its new competencies and its subsequent SHRM-CP and SCP certifications, the message is clear: the HR profession is in the midst of an overhaul. The reason for the new competencies was crystal clear according to Hank Jackson, SHRM CEO: “It’s about advancing the HR profession”.

In my last article, I wrote about the “hows” required to “up HR’s game”. That's half the story on how HR needs to evolve to play a greater role in business leadership and strategy. The “what" you need in order to transition is just as important.

Where the “how” focused on the competencies and skills needed, the “what” will focus on ensuring you have the supporting infrastructure to make this change successful.

I believe HR is aware it needs to change and has a clear mandate for change from the C-Suite, but we're struggling with the execution.

It makes me think of the story of the shoemaker’s son who has holes in his shoes. We're supposed to be the leaders of change in our organizations, yet we have difficulty changing ourselves.

To transition from transactional management to business leadership and strategy, HR needs a plan

HR can have the best competency model in the world, but if leadership isn’t “bought in” to the strategic role of HR and the organization's infrastructure doesn’t support a more strategic and accountable environment, then HR will have a difficult journey to business leadership.

So the first step to a successful transition is a much-needed pause for planning. Planning is key to execution. By taking a proactive, well thought-out approach, HR increases its chances for successful execution. Plan for resistance, plan to change the plan, plan the communication and plan for a very interesting journey.

Here are five "what's" HR needs to do to become the strategic business leaders they and their organizations deserve.

1. Garner executive support

If you read any book or article on organizational change, it always starts with the need for executive support. Changing HR's role is no different.

While many CEOs understand the need for HR’s role to be just as important as any other business function, others are stuck in a different mindset—one that keeps HR in the shadows, processing paperwork and planning employee engagement activities.

I believe HR's hardest task is to influence the leadership team so they see HR has to shift its focus from transactional processing to providing business insight.

To gain executive support for HR becoming a true player on the leadership team, I always recommend that HR create a business case for change. Writing the business case forces HR to be clear about why it needs a different model and what the benefits to the organization will be.

It also forces HR and the organization to look at the investment required to make HR play a strategic role. Many people think that a strategic model means no increase in costs or even a decrease in HR related expenses. That assumption is definitely not true. When you increase your HR skillset and become more data-driven via technology, you must an investment.

The key to the business case and to gaining executive support is to demonstrate the ROI of an investment in HR.

2. Build line manager support

As I've worked with HR departments to shift their focus to business leadership, inevitably the role of the line manager is debated.

As HR strives to become more efficient, processes become automated, and self-service HR becomes a viable option. This self-service environment can be met with a lot of resistance by line managers, depending on how much hand-holding HR did with employees and managers in the past.

But the bottom line is, managers have to manage their own talent.

Of course, this will be met with: “this is HR’s job, what are they doing now?”

Managers need to understand that they can have a performance conversation without HR being present. They can be empowered to make certain employee relations decisions that are routine. The issue for them becomes one of training and time management.

It’s a matter of setting clear expectations for what HR’s role is and what managers are responsible for.

Just like with the C-Suite, HR must use its influencing skills to ensure that managers understand why HR needs to be a strategic business leader and how that benefits managers.

3. Transactional tasks must be efficient and effective

The trains must keep running, period. The transactional tasks will never go away completely for HR. Even if we outsource them, someone has to manage the vendors and key performance indicators.

The key here is efficiency. HR should make sure processes like employee address changes, government program paperwork, and even requisition approvals are as streamlined as possible.

Whether you outsource, centralize, offshore or create centers of excellence, the transactional work must be managed and managed well. If paychecks aren’t right, then HR’s credibility takes a hit, and the transition to business leadership will be stalled.

4. Assess your culture's readiness for change

Many cultures absorb and bend easily with change. Other cultures can be very rigid and entitled.

When HR moves out of the processing business into strategic leadership, many things change.

As I mentioned earlier, asking employees to make personnel changes for themselves requires a change in behavior and mindset. The same goes for managers, they must change their behaviors to operate in a more streamlined, technology-enabled environment.

We all know the stages of change and how resistance is expected.

But today I believe organizations suffer from change fatigue. Most of the clients I serve have at least five organizational change initiatives being executed simultaneously. Employees definitely get burned out by so much change and often forget why the changes are all happening.

A good best-practice is to assess the organization’s readiness for change. There are many assessments available that show HR professionals whether change fatigue is plaguing the company.

Following good change management principles including with an EXCELLENT communication plan will allow HR to make their transition to strategic leadership a successful one.

5. Anticipate and manage roadblocks

As with any change roadblocks WILL appear. The magic is in how those roadblocks are anticipated and managed when they surface.

In my experience when taking this journey, the typical roadblocks to successful HR business leadership are:

  • Leadership doesn’t see the need for change
  • HR skillsets need to be upgraded
  • HR gets in its own way
  • Resources (budget) have not been made available, (see first bullet)
  • HR is poorly perceived

By planning for change, HR can mitigate many of the roadblocks listed. For example, assessing the HR department's competencies prior to the change is a great idea. By understanding where individuals are and where the department plans to be is a natural place to start. If gaps are identified, training, mentoring, job rotation and education can be used to close the gaps prior to moving forward.

What are you waiting for?

I strongly believe that if the “how's” and “what's” are accomplished, HR will be on its way to being it's wanted to be for 25 plus years: a true business leader that just happens to be good at HR.

For HR to be successful it's critical that we use influence, insight and courage. It takes courage to be heard and to change a profession. By following the five "whats" I've just laid out, I believe we can. 


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