Each and every one who has been on an outstretched trip with children has heard them ask the question, ‘‘Are we ‘there’ yet?’’ In multifarious ways, the HR professionals have also been asking this question for the past many years, ‘‘Are we ‘there’ yet?’’ Are we able to quantify the value we create and are we able to move beyond our legacy of administration to become univocal strategic business partner? To define ‘there,’ we need both, a destination where we are headed and a roadmap for getting from ‘here’ to ‘there’. As the terrain of HR bisects into two parts i.e. operational and strategic, defining ‘‘there’’ becomes a bit more complex and more important than ever before.
“An agglomeration of ‘globalization’, ‘agility’, ‘speed of execution’, ‘innovation’, ‘collaboration’, ‘talent’, and ‘resilience’ is what sums up the demands of today’s business”
Against this set yardstick of performance, traditional HR with a focus on administrative routines and operational excellence only, will find it arduous to deliver results. Hence a cardinal need for transformation or metamorphosis in HR is required to sustain competitive business advantage.
This is more so in times where customers having ever-increasing choices, with technology changing the rules of game in respect of products and services, with changing demographics in the workforce, and with myriad information where business leaders understand that competitiveness requires leaders to create new organizational capabilities to match strategic intent. And these ‘au courant’organizational capabilities become the deliverables for HR for transfiguring traditional administrative roles to ones generating strategic value.
Simply put, the journey from operational excellence to strategic business partnership encompasses all facets and practices of HR that make a significant impact on the organization’s performance.Be it crafting and implementing the Employee Value Proposition, Diversity & Inclusion, Merger and Acquisition, Cultural Integration, Improving Bottom Line, Crafting Cultural Pillars & Core Values, Focus on Internal Growth & Development, Cross Pollination of Talent, Progressive HR Policies, Labour Law Compliances or HRIS metrics; each area of HR undoubtedly needs to be linked to business. For me, this collaboration and shift will recognizably and distinctly mean remodeling of three aspects mentioned below:
First, not only the HR leaders, but each and every member of the HR team is committal to developing a business mindset and ingraining their ecosystem into the business to add value by effective execution.
Second, the obvious question is how to do it, and the answer to that is by developing certain pivotal skills. These octennial cardinal skills include ‘acuity in examining the external environment to forecast business challenges and opportunities’, ‘finesse to work with the executive team to set direction and goals’, ‘cross-functional business comprehension with a P&L orientation’, ‘theoretic and conceptual skills to architect the organization to meet tomorrow’s demographic challenges’, ‘developing financial intellect’, ‘being tech-savvy’, ‘legal know-how to ensure a hundred percent compliant organization’ and most importantly, not to forget the ‘operational ability’ to ensure that the transactional aspects of HR are well executed in a world of fast-moving and changing expectations of the employees.
Third,the metrics of success need to be redefined and focused on transforming the business. What does this mean?It means looking at the same HR metrics but measuring those in a different way by linking it to business. For example:
- Talent Acquisition: Making a shift from only measuring number of hires to measuring the reduction in cost per hire over the last few years or percentage automation to reduce hiring time so that business is not affected.
- Talent Management:Making a shift from only capturing the employee engagement score to understanding how this score leads to betterment of Net Promoter Scores (NPS).
- Governance and Compliance:Making a shift from only tracking the disciplinary cases to making sure that those are reduced to ensure zero loss of man days and understanding the financial impact of the same so as to improve the bottom line and decrease organizational liability.
- Bottom line impact and People Cost Management:Making a shift from just understanding the people cost to comprehending what the revenue/ EBIDTA per person is, what people cost as a percentage of revenue is or taking measures such as rightsizing, internal hiring, government aid provided in hiring indigenous people, focussing on skill development programs of Government and driving financial goodness in all measures.
- Diversity and Inclusion:Making a shift from only measuring number of diverse group hires to linkage of this initiative to enhancement of customer satisfaction score, enhanced ability to serve a diverse clientele, enhancement of economic status and reduction in costs associated with attrition apart from making the organization as an Employer of Choice.
- Cultural Alignment: Making a shift from simply defining cultural pillars and core values to understanding how to redefine those to align with the business mission and knowing exactly the behavioural indicators and manifestations of the same.
These are purely know-how examples and the shift in the entire paradigm would require much more to this. This perhaps was an elevator pitch to the actual effort that would take to understand the alpine correlation between intangible assets and financial success of the organization. In my experience, I have realized that the journey from operational excellence to strategic business partnership is best achieved by HR leaders introducing a common framework and making expectations explicit down the line and enabling all HR professionals to work more effectively towards this change. It needs to be a visual model so that people from widely different backgrounds can conceptualize the ideas in the same manner.
We need to proactively focus beyond operational excellence and operate strategically to optimize workplace performance in order to maximize business results. A comparative set of measures and benchmarks for assessment of the function in line with business requirements has to be the need of the hour.Let us be accountable not only for what we do but for the results we are providing – from providing perceived value to demonstrating actual value to the business!
