Strategic Business Partner/Teacher
To be a true strategic business partner to executives, the HR department must take a business-oriented approach to the human capital side of the organization. From speaking the language of your company leaders to understanding the need for growth and education, an effective HR leader will gain respect and can bring positive change to the business.
As a CHRO, it is critical to think and act in the best interest of the business. At my company, we do financial reporting on a quarterly basis. In addition, every department has to submit a forecast every two weeks about where it stands against its quarterly revenue, margin and profitability goals. We have to dynamically track all of this and make adjustments, sometimes in real-time.
From an HR and human capital standpoint, we have to look at labor, recruiting and management costs …who we are hiring, how much they cost, whether they are focused on the correct priorities, etc. We also need to ensure that we leverage our talent across our business units, and this constant cycle of review allows us to determine if we have the right people in the right places, or if we have gaps to fill.
Understanding how to evaluate human capital and how it affects the business is a vital skill, particularly in companies like software firms where labor costs can represent 60 percent of total costs. Because our people are such a large part of our expense structure, senior leaders take a great interest in forecasting and ability business goals and cultural alignment.
Talent and Culture Architect
As a CHRO, it is crucial to understand and demonstrate the value that culture and talent development can have on the organization. Working to ensure that on-the-job development, training and coaching are available and utilized at all levels is critical.
Setting up a coaching program that includes CEO participation is vital to organizational success. Most employees, particularly those at the leadership level, will want to emulate the behaviors of the CEO. The programs I have created are robust and target the high-potentials and talented employees who may be taking on new, larger leadership roles.
Through coaching, an HR team also can accelerate the company’s succession planning process as it changes and grows. Approaching a talent development program with questions such as:
- How do we look at successors?
- How do we ensure we are going to have the right talent in place for the future?
- How do we place our top talent in the most critical roles for the company?
- How do we stretch and grow our high potential talent with cross-functional assignments?
This approach will not only help you improve employee engagement and development, but also will help the HR Department contribute to the company’s bottom line.
As companies evolve, so must the HR strategies and programs that support business goals and cultural alignment. At a previous organization, we moved from a flat, entrepreneurial culture to a more structured, hierarchical one due to acquisitions and regional/global growth.
I led a corporate cross-functional project to change the entire job and composition structure for the whole company. Employees had to be educated that they would have future career opportunities and continue to be aggressively compensated for strong performance through these changes.
Our goal was to capture the entrepreneurial spirit already in the DNA of the company culture and find a middle ground between that and the hierarchy needed to come up with a new culture that would work with the changing structure, philosophies and practices that were needed for expanding to be a larger player in a broader industry.
Managing Growth Through Transformation
Skyrocketing growth and company transformation can pose great risk for a company in all areas, from Sales, Finance and Facilities to HR. When they occur at the same time, the risk for missteps and miscues, from forecasting earnings to ensuring that new employees have a desk at which to work, is even greater.
At one company I worked for, we were experiencing massive growth and taking on larger customers than we had ever taken on before. While we were growing, we also were transforming from a locally prominent, family-run organization to a global, publicly-held company. That was the challenge. There was little infrastructure in place that would allow the company to go public in a year and withstand the regulatory requirements and scrutiny that comes with being a public organization. It really was about how do you transform this organization?
I have found myself in a situation once or twice in which the company was in growth mode, which is a great place to be and a wonderful environment to work in, but sometimes you can get ahead of yourself. Simultaneously, you need to get consultants on board, you need to hire sales reps, you need to meet the customer demands and you want to achieve those growth and revenue targets that you have set out for the business.… and you need to do it all without creating chaos.
Sometimes when you are in growth mode and you are so excited about bringing new talent on board you can grow your infrastructure faster than the business delivers on the revenue side. You bring in the headcount that you think you are going to need, the talent you will need to deliver against the growth, and you build up the corporate staff groups (HR, Finance, Marketing, IT, etc.) to bolster support before the revenue actually comes in. It is a balancing act between people and revenue.
This is a big challenge because you are moving fast in a growth environment and you want to deliver, and you don’t want to be short the staff or resources needed to deliver on the revenue.
This timing and balancing act is hard to perfect, but one of my jobs is to understand where the business is going in the future and partner with the business leaders to look at their workforces and systems analytically. We look at our cost structure to see what is needed to support the business, recognizing that we will have to grow in pockets.
We always try to make decisions in terms of what’s best in the long-term and still deliver the financials in the short-term. You sometimes need to call a time-out to look at that, manage that, balance that effectively while also engaging talent in the growth of the company.
One of the biggest challenges in moving from a private business to a publicly held company is honoring the success that the company realized to get it to this position and preserving the success that employees had with customers. This, however, isn’t as easy as it may sound. I suggest a multipronged approach to achieving this goal.
First, I suggest looking for best practices that have worked locally and leveraging them globally. This demonstrates that we’re serious about respecting individual contributions and recognizing that a lot of people did a lot of great work to get us to this point. This can help soften resistance to changes you may then ask people to make.
Second, I recommend building a competency model and performance management process to align employees to the business strategy and goals. This includes an evaluation process which sets employee goals/expectations, feedback and even compensation. This enables you to create an accepted common language in which to discuss, evaluate, monitor and align performance.
With leadership support, we leverage the competency model and performance management process to define and discuss business priorities and what’s important for business development, to increase revenue and to drive organizational alignment. We also educate employees so they will understand how their jobs fit into the larger picture and align themselves with business priorities so that we are all rowing in the same direction.
Through creating these key human capital processes and our systematic review of the business forecasts and results, we discovered that some employees were focused on individual products that were not driving the most revenue. At the same time, the amount of time and energy spent on different customer segments was not aligned to revenue and profitability.
We had to analyze our customers and products from a return-on-investment standpoint and segment our customers based on revenue and profitability. This transformation happened over years, not months, and it came about as a result of information sharing: getting people to understand that there were different ways to satisfy every customer. We have made great progress in balancing customers’ needs, the needs of the business, available resources and profitability.
Managing Human Capital:Leveraging High Performance Across an Organization
As one of the CEO’s key strategic advisors, I am relied upon to know the pulse of the talent, what is going on, the morale of our employees and the impact of morale on the company. The CEO relies on me to help manage the talent — the human capital — to make sure we have the right talent for where we need to go and to make sure that we are managing performance effectively.
We work with all levels of employees across the organization to understand the definition of a “high performer” and what made them high performing and successful. We study these high performers to understand what key behaviors made them successful. This helps us develop key behavior anchors for each level in the organization to define what meets expectations, what exceeds, what is considered exemplary at each level — at VP, director, manager and individual contributor.
Getting buy-in on the organizational and behavioral anchors in the competency model is important. We included a sample of employees from across the company in building this, so a lot of people had been exposed to this before we got to the point where we were ready to communicate it and roll it out.
These “model” behaviors must begin with the talent on the executive team. In some cases, members of the executive team will be willing to adopt these behaviors and some will not. Some will embrace rapid growth and transformation, and adapt and mature with the organization and others can’t, or simply won’t, adapt. Those who don’t adapt must occasionally be replaced, and sometimes that can be a hard decision; but it’s key to future success and ultimately the right decision for both the team and the individual.
Communication and Education
The key to success with any change in an organization is gaining senior executive buy-in, so that what you are trying to accomplish isn’t seen as a forced HR activity. In my experience, it was critical to be able to demonstrate that change is a business-led initiative for the purposes of moving the business forward. I always seek executives to be the sponsors of major human capital changes that are rolled out across the organization and ask them to pilot initiatives in their organizations first. This enables us to leverage learnings and show that these changes are critical for business success.
For every human capital strategic change, there is always an education, coaching and communication aspect that is required for success. It starts with one-on-one conversations with the CEO and other senior leaders and then driving those messages throughout the organization. To that end, we develop a massive education and communications plan around our key changes that leaders can leverage.
The Human Side of Strategic HR
What I have also learned over the years, is that you can have strong business acumen and deliver operational results, but that is not enough to be a Strategic Business Partner to your CEO and leaders in the company. Your peers want a partner in HR who will support them in their goals and help them with their people challenges. I strive to be a trusted advisor and confidant who can coach them to grow as leaders and support them in finding the right solutions for transforming their own organizations. And I feel extremely passionate about the business and the people in the organization who rely on me to “do the right thing.”
I hold myself to a high standard in being open, honest and candid with my peers while building trusting relationships that enable us all to achieve great results for our business and in growing our talent. In the CHRO role, you need to be the “heart and soul” of the organization even when that might not be a popular voice to be heard at a given moment in time. The constant balancing of business and people needs is critical to achieve success. ■