Putting the “Strategic” into Strategic HR (and Management)

abc1One of the buzzwords we often use in the talent world is “strategic HR.” Given all the administrivia which HR people do, is it really possible for HR to be “strategic?” If so, what does this mean and what does “strategic HR” look like?

What Does It Mean to Be Strategic

Let’s take a minute and just talk about what “strategic means.” If HR (or anyone else) does something in your business which just “keeps the lights on” or “reduces cost” is that really strategic? Is it “strategic” to reorganize HR to reduce cost and improve service, for example?

No it is not.

Strategic work involves building capabilities or driving programs in the company that create competitive advantage, pricing power, differentiation, or deep levels of customer retention. To be strategic, HR organizations must put time and energy into things that make the company “significantly different” or “measurably better” than competitors (or alternatives).

Delivering A Unique Level of Customer Service

At one particular airline, part of the company’s competitive advantages is its unique ability to make travel fun and enjoyable. Part of fulfilling this strategy is sourcing and hiring people who are free thinkers, like to have fun, and can innovate creatively on the job (while being safe and following procedures). HR’s job is to figure out how to locate and identify these people (which they do through a special from of auditioning).

Hiring People That Uniquely Fit Our Strategy

Another retailer profiled its highest performing store sales people and found a unique set of psychological and analytic skills in its people. They used this special formula to redesign their sourcing and dramatically improved sales over the competition. (Read “The Science of Fit” for more on this.) In fact, sales per store increased more than $2M in the first year of this program.

Identifying and Developing Unique Competencies

Most companies have technical roles (design, engineering, manufacturing, software development). What technical skills do we want in these roles and what particular unique skills drive our strategy?

At some companies (I wont mention names), the company looks for pedigree’d engineers but then puts them through a unique, company-designed certification program to teach them the principles of their company’s design process. This design process embodies the company’s unique focus on integrated design, simplicity, and adoption of standards. This special training makes the company unique, and HR spent many millions of dollars developing the curriculum.

Creating Uniquely High Quality of Production

In our business, we learned early that “quality of research, analysis, publication, and communication” was key to our success. We tried to hire for all these skills and later found that it was almost impossible to find someone good at everything. So we put in place a series of review processes, personal coaching, process standards, and development to help make sure our quality was maintained. I personally spent many years helping to develop and write standards, which are still used in the business today.

Building Unique Sales Process and Techniques

One of the most important sources of strategic value is how a company sells its products. A savvy business partner organization in a large computer networking company realized that because of the larger number of products, the company needed a very unique set of client management, technical, and relationship building skills. So in addition to developing standard training for new sales people, the team built a whole peer-to-peer assessment, coaching, and later certification program which every sales person had to go through. The result was (and still is) a sales team unrivalled in their marketplace. (IBM had a similar program when I worked there in the 1980s.)

Embracing and Extending Unique Leadership Models

And of course one of the most important ways HR can be strategic is to help identify, develop, and build unique leaders who drive the company in its own special way. While many leadership qualities are common across all organizations, every company has its own “special sauce” which helps it compete.

GE, for example, is well known for its leadership programs. GE builds these programs in a highly unique way, leveraging GE’s legacy of experience in design, engineering, manufacturing, and business. People who spend years at GE learn things they never learn anywhere else, driven by GE’s focus on being strategic with its HR and leadership programs.

If you’re in a leadership, HR, or training role, think about what makes your team or your company unique in the market. Now think about how you can reinforce, accelerate, and amplify these characteristics. The chances are you’ll think of brand new, unique, strategic ways to hire, assess, develop, manage, or lead people – ways that make your company even more competitive than it is today.

If you’re an HR person, these are examples of highly strategic ways you can spend your time. If you’re a business manager or leader, these are examples of ways you can focus your “people efforts” in strategic ways as well.

Remember that we are here to build a sustaining, high-performing, competitive organization. Things which identify and reinforce your “secret sauce” in people are among the most important things you can do.