Nearly every development opportunity offered to HR professionals today emphasizes the need to be strategic. This is easier said than done. Being strategic is usually reserved for leaders, executives, and titans of industry. For chief human resources officers (CHROs) to get in the game and become strategic players, they too need to master the art of strategic thinking and apply it within their organizations.
This begs the question, “What knowledge, skills and abilities does a CHRO need to be strategic?”
How to master the art of strategic HR
Let’s break it down. Here are the things you need to know, think, feel, say and do to become a strategic business partner.
What you need to know
There are two indispensable components of strategic HR knowledge. First, you must be a subject matter expert in HR. Without requisite knowledge in HR, nothing else is possible. Second, you must know the ‘business of the business.’ That is, you need an advanced level of knowledge about your company's mission, vision, goals and business model (how the organization makes money).
What you need to think about
Strategy is inherently about the future. To be strategic you must be able to think, plan, prepare, and design for the future state of the business. In addition to being able to shape and influence tomorrow’s competitive environment using HR assets, it’s also important to think holistically and integrate what HR is doing with the rest of the company’s operations.
How you should feel
There’s an important leadership lesson I learned from the teachings of Colonel Mark Costa, USMC (Ret.): leaders are held accountable but they must also 'feel responsible'. CHROs need to feel like they can make a difference. They need to feel that they are responsible for the success of each individual employee and of the organization as a whole. This sense of responsibility ensures that HR initiatives have everyone’s (e.g. employees, customers, society, company, shareholders, etc.) best interests in mind.
What you should say
CHROs must be effective ambassadors for their company, advocates for employees, and spokespeople for the profession. As ambassadors we must be able to represent our companies externally with customers, regulators, and the general public.
Internally, we must speak up and effectively articulate the value of people and their impact on the bottom line. In the boardroom we should be able to ‘talk-the-talk’ — that is, speak of and sell HR initiatives in the language of business like other executives.
It’s important to know the concepts and the lingo of profits and losses, revenues, balance sheets, cost-benefit analyses and profitability ratios, and then present HR initiatives in a way that business people understand and use to make decisions.
What you should do
Being a strategic player involves everything discussed above. CHROs need to master HR knowledge; develop plans and articulate the value and effectiveness of HR activities; take responsibility for organizational outcomes; leverage HR to enable future organizational successes; and champion high performance by supporting employee growth. (Note: Leading people and making change is the subject of my next blog post.)
The competencies you’ll need to become a strategic business partner
What a CHRO must know, think, feel, say and do to be a strategic business partner in their organization can be summarized into four broad categories of strategic competencies.
First, they need to be able to think strategically about how HR can enable the success of the enterprise as whole and not just the HR department.
Second, CHROs should master the HR body of knowledge (think PHR and SPHR certification).
Third, it’s important to develop business acumen and understand how the organization creates value for its customers.
Finally, CHROs need to develop executive skills that help to advance the function and the profession by effectively representing the value of human capital. I discussed executive skills in detail in one of my previous blog posts.
Only one of the four areas of strategic competencies above is exclusively related to HR. HR does not exist within a vacuum; it must be fully integrated within the context that is specific to each organization. This recognition is in and of itself the result of strategic thinking.
Your Turn: What challenges have you encountered on the road to becoming a strategic business partner? How did you overcome those challenges?