Thinking about Strategy for the New Year

The online Business Dictionary defines business strategy as:

-A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem.

-The art and science of planning and marshaling resources for their most efficient and effective use. The term is derived from the Greek word for generalship or leading an army.

Human Resources often gets a dig about our strategic skills, which seems odd. For the most part, we can plan with the best of them and marshal employees in a favorable way. So, where's the disconnect? In my experience, one of our bad habits is a tendency to shoot before we aim. For instance, I had a client who was the founding HR manager of a new food processing business. When it came time to develop a strategy for the function, her first step was to send an Associate level staff member to talk with employees.

Now, I am one of the biggest proponent of listening to what's on employee minds, and I can offer a number of channels for that critical interaction. But seriously, is asking employees a responsible way to begin strategic planning -- especially since the business was a start up with little history and no specific culture? To ensure a conversation will be fruitful, everyone needs to have a well-understood context as a reference.

One of the first steps in strategy development, and perhaps the most demanding, is to identify the business problem you need to solve. The "desired future" as the Business Dictionary describes it. Recognize, all HR projects should ultimately help improve business results, giving you a measurable goal. Then, your HR practices are the tactics you choose to "marshal resources" and "bring about" that desired future.

There are a number of reasons why this first phase of strategy development is demanding and surprisingly time consuming. You need to be knowledgeable about both organizational and functional business goals, not just for the next year but for the next two to three years. After all, if you are going to plan real change, it's pointless to be shortsighted. In many companies, business plans including HR's are updated by the end of the first quarter, which gives you a specific time frame for this initiative.

Can you develop these business insights on your own? You probably have a solid foundation, but you can't be up-to-date on the details unless you've sat in on, or have access to records of, executive team meetings. These will educate you further about priorities and prepare you for the most valuable step -- interviewing the key players.

In short, you want to find out where the executives want to go, and how they believe employees will need to support this future state. You'll want to talk with executives in specific terms about how expectations for employees will need to change. Do different skills and competencies need to be targeted? Is new talent needed? And, so on. If you prepare a discussion guide well, you can have these discussions in 90 minutes. If you only get vague responses about the executives' expectations for employees, then you know how much education and communication you'll need to provide your executives to get your strategy approved.

Will the executives tell you what the HR strategy needs to be? Nope, instead the interviews will give you the business problem definition which you can translate into your overall project goal. The HR strategy is your job, in the form of a method or plan to "bring about [the] desired future." In other words, to help solve the business problem that's been defined.

Recognize that you will not be quite ready to do the problem definition/goal setting after the executive interviews. Face it, how much do you really, truly know about employee readiness for these new demands without doing further research? You can look at current employee metrics to further analyze your current state. Examples include survey results, skill sets, LOS in current jobs, compa-ratios and more that will provide insights into how ready employees (and HR) will be to evolve to achieve your goal. You may want to gather information through focus groups, too.

Finally, once you've defined your future goals and the present state, you are ready to identify the size and details of the gap between them. With that analysis completed, you'll be ready to "plan and marshal resources" -- in other words, voila, a strategy that "provides the most efficient and effective use" of your company's resources.

Margaret O'Hanlon, CCP brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans. Earlier, she was a Principal at Willis Towers Watson. A former Board member for the Bay Area Compensation Association (BACA), Margaret coauthored the popular eBook, Everything You Do (in Compensation) Is Communications, a toolkit that all practitioners can find at https://gumroad.com/l/everythingiscommunication.

Comments

[Joe Thompson]

Thank you, Margaret, for another insightful post. I think you really hit the nail on the head in your sentence "To ensure a conversation will be fruitful, everyone needs to have a well-understood context as a reference."

I've seen several new initiatives and ventures to move an organization into uncharted, novel territory where there is no common understanding of by virtue of the fact that it is uncharted. Yet, many HR and Change Management professionals want to start with the tried-and-true employee focus groups. Ostensibly, they want to get the perspectives of employees to shape the path forward.

But, as you've said, if there is not a well-understood and common understanding of the future state, such conversations can actually stir up more anxiety. This is particularly true when employees raise more questions than management knows the answer to at the moment. In my mind, this is akin to asking Sony Walkman users what they wanted in an iPod, or a Nokia bar phone user what they wanted in an iPhone.

Sometimes, leadership means advancing into the wilderness without focus groups.

[Margaret O'Hanlon]

Hi Joe and thanks for sharing your thoughts. There's that "shoot then aim" thing again! I agree that early focus groups should be used very cautiously and mostly when you really don't have a regular source of listening. (Informal channels work, too.)