Value-based Human Resource Strategy

Laura Brown, Tony Grundy

• Publisher: Routledge
• Year: 2012
• eBook ISBN: 9781136349911
• Topic: Business
• Subtopic: Business General
• Index: Business

Value-Based Human Resource Strategy demonstrates how HR strategy can be positioned and implemented to generate real shareholder value, using case studies from BT, Dyson, Marks and Spencer and others. The following topics are covered: * Scope, positioning, process * Strategy techniques * Links with managing for value * Project managing HR strategy * Specific HR strategy issues and breakthroughs * Being an HR strategy consultant Many HR managers are trying to become more of a consultant than an HR administrator and don't know how to - this book addresses that need. It is practical and contains visual tools to work through HR issues.

P A R T 1

HR strategy

C H A P T E R 1

Introduction

Human Resource (HR) strategy is now widely recognized as being an important – and perhaps essential – way of developing organizations to meet increased competitive challenges. Yet many managers (including HR managers) have only a broad, and at times vague, notion of what it actually is.

Even fewer managers have much of an idea of how to derive an HR strategy, and of how it will be used – and in practice, an even higher proportion have only the vaguest concept of how it can add value, especially in economic terms.

‘HR strategy’ thus seems currently to fall into the category of being a ‘nice-to-have’ management process. In many companies it appears to fall into the zone of ‘MBO’ (‘Management by Ornaments’), its role being principally to make HR departments feel more comfortable about their direction and position, or as something to tick off as ‘done’ by the Chief Executive.

Indeed, the very assumption that HR strategy is principally ‘owned’ by HR departments is itself something to be challenged. In this book we take the view that HR strategy is not something to be owned solely or primarily by HR departments, but rather by senior line management collectively. The HR department’s role is therefore to facilitate its development and then help to project manage it, and to support its implementation.

Our other main propositions are that:

■ HR strategy must play a key role in developing the organization’s competitive advantage, not merely to support the business strategy but also to develop it proactively.

■ HR strategy can and must play a major contribution to the creation and capture of shareholder value, or ‘economic value’. This means that we should be able to trace some very clear links between HR strategy and short-, medium- and long-term incremental cash generation, directly or indirectly.

■ HR strategy is actually best developed on an integral part of the business strategy, rather than separately, or as an add-on afterthought.

■ Number One owner of the HR strategy should be the Chief Executive.

■ To facilitate HR strategy, to project manage and support its implementation to add value, requires a somewhat different mind-set and processes, priorities and skills within most HR departments.

Having taken a quick look at the key themes of the book we are now ready, in the remainder of this chapter, to look at what strategy is.

What is Strategy Generally?

Whilst ‘strategy’ is often defined (Grundy and Brown, 2002b) as being:

. . . moving from where you are to where you want to be in the future – with competitive advantage

a more practical and everyday definition (drawn from Blackadder television series) is:

Strategy is the Cunning Plan.

A ‘cunning plan’ can be defined as one with the following characteristics:

■ It contains a good deal of novelty, and the solution is often brought in from elsewhere – an unexpected direction

■ It isn’t generally obvious, and is generated by thinking about options

■ It has an inherent simplicity, especially in its execution

■ It works backwards from its key objectives, rather than from where you are now.

To give an example of a ‘cunning plan’, let us look no further than the story of Blackadder and Baldrick in The Millennium Video.

The ‘Cunning Plan’

Blackadder and Baldrick have devised a time machine, in order to recover relics from the past. Unfortunately they fall on the controls, prematurely landing themselves in the past – in Roman Times. However, as they did not take a note of the positioning of the controls, they can’t easily navigate back to the present.

Getting more and more frustrated at their zigzag through different times and spaces, Blackadder sighs, saying, ‘So, I am going to spend the rest of my life in a small wooden room with toilets and with the most stupid man in the world.’ Baldrick reassures him, saying ‘Don’t worry, because I have – I think – a cunning plan.’ Blackadder responds, ‘Well, I am not optimistic,’ to which Baldrick replies ‘No, my family have never been good at cunning plans.’ Blackadder then says, encouragingly, ‘So, with suitably low expectations, what is your cunning plan?’

Baldrick relates his idea, cleverly working backwards from the goal of ‘recovering the memory of where the controls were set’, as follows:

‘Well, you know when people drown, their life flashes before them, well, if you were to stick your head in a bowl of water just until the moment before your death, then your life would flash in front of you and you would then remember how the controls were set, and then we could get back home.’

Blackadder responds, in typical style, ‘Baldrick, that is a cunning plan. But I have an even better idea . . . .’

At which point he knocks Baldrick unconscious, and we see Baldrick upside down being dropped repeatedly with his head down one of their two loos.

Not only does this short case highlight the need for novel thinking, it also shows how even a ‘cunning’ plan can be made one better – a ‘stunning plan’.

The plan is cunning because:

■ It is a very novel way of remembering something that has been forgotten

■ The solution is brought in from a very unexpected source (the ‘out-of-body’, pre-death experience)

■ The plan has involved considering non-obvious options – others might have included deep hypnosis, or truth drug interrogation

■ It is ultimately simple in its execution

■ The objective is cleverly defined not in terms of ‘how do we get back to the present’, but ‘how do we remember the settings given that we have forgotten’.

Now whilst this may seem to be an amusing story, the ‘cunning plan’ notion is helpful to HR strategy at a variety of levels:

■ It gets away from the notion that strategy is an abstract concept

■ It provides us with an excellent list as to what actually counts as a ‘strategy’, and this excludes just an average plan for doing things

■ It is highly creative, and involves a shift in mind-set

■ It implies that strategy has to be highly focused, as it is hard to move a lot of plans into the state of being ‘cunning’.

We will use the idea of the ‘cunning plan’ particularly in Chapter 6.

Mere analytical techniques alone are insufficient to take a plan up to a more cunning and genuinely strategic level. To give you an example of this in HR strategy terms, we draw from a strategic benchmarking study on leadership within major organizations.

An insurance company was devising a leadership programme, and found that leadership programmes are expensive, are not always successful, and are often inhibited by organizational constraints that set in in everyday work. One computer company therefore set up a leadership development process – a series of long lunches to reflect (as peers) on how the participants could develop their leadership skills in everyday situations. This proved to be not only effective, but also self-sustaining and cheap.

Here the leadership development process worked back from the objective (which was to get the value out of leadership behaviours at an everyday level) by delivering this in the least time and at the least cost.

To illustrate the significance of the ‘cunning plan’, while working with the Royal Bank of Scotland HR managers we found that if they were not exposed to continual reinforcement to the ‘cunning plan’ idea, they would generally produce average plans for implementation. These average...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Contents
• Preface
• Part 1: HR strategy
• Part 2: HR strategy process
• Part 3: HR strategy issues
• Part 4: Putting HR strategy to work
• Appendix: The literature linking corporate and HR strategy – an overview
• References
• Index