How can HR support business strategy?
What are the unique needs required to develop or sustain a successful business? To find out, take a good long stare at your business through the horizontal and vertical strategy lens.
Horizontal and vertical strategy lenses.
The horizontal lens ensures that strategies are not competing; it shapes business direction and places emphasis on the scale of achievement and innovation. The vertical lens focuses on the resources to deliver the strategy; it provides the shape to your competitive advantage, focusing on your human capital.
What happens when the vertical lens and the horizontal lens are not aligned?
Businesses can be evaluated through four stages of lens development with findings indicating if the two lenses are in alignment; no alignment severely hampers the chances of business success.
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How to assess your business against the lenses
Business state one – Weak vertical lens and weak horizontal lens
This is where the business fails to have a ‘people strategy’ in place, indicating that there is no relationship between the human capital involved in the business and the business unit in terms of strategic achievement. Employers in this category often evaluate employees in terms of a particular skill and measure them accordingly; they fail to provide them with the opportunity to develop or acquire the skills required by the business. Consequently, this business risks accepting a culture of static or low skill and high employee turnover along with demotivated staff. The business is unlikely to achieve its potential.
In this state, business strategy is often developed in isolation by the CEO. This approach by the CEO lacks transparency and input from others, innovation is limited and initiatives are frequently confusing. This style is often found in small organisations where there is no dedicated HR function or where HR is in an embryonic state viewed by managers and leaders as somebody else’s responsibility and not part of a strategic plan.
Business state two – Weak vertical lens and strong horizontal lens
In this state, the HR team are not regarded as a core business function. They are seen as administration, often left out of any current business strategy and therefore plan and work to outdated ideas and concepts.
This business is often great at ‘process speak’. This occurs where business leaders have high levels of process expertise but a lower competence in developing strategy. Often, a strong HR policy and goals can be found; however, they are disconnected from the business strategy. Any HR policy is also developed in isolation of the business strategy.
The weak vertical lens and the strong horizontal lens can deliver successful action; however, the combination of excellent process skills and the ability to translate business goals into practise means that a lot gets done but it is disconnected from the bigger picture and long-term planning. This leads to a culture where transactional initiatives are valued over transformational aspirations. Connection can be improved by a people strategy, which includes a clear development programme for business leaders.
Business state three – Strong vertical lens and weak horizontal lens
Although a people strategy may be in place and is clearly articulated, if it is not translated into a coherent set of policies and practices, a culture of no buy in or ownership from line managers can develop. Hence, HR initiatives are not implemented, measured or evaluated. Business leaders are often incapable of translating the business objectives into strategy or linking to HR policy or the people strategy.
A strong vertical lens and a weak horizontal lens can lead to strong action where there is an enactment of business goals, and line management accept the responsibility for this. This occurs because a strong performance management process is in place. The people strategy looks good on paper; HR understand the business strategy; the HR team are highly skilled in positive development.
However, senior managers may fail to support the business strategy activities as they have not been involved in the development of the strategy. Therefore, they are unlikely to deliver the ‘people strategy’ as required in order for business objectives to be met. This could be due to lack of clarity.
Business state four – Strong vertical lens and strong horizontal lens
The is the ideal state where there is a coherent HR approach with a strong people strategy aligned to business strategy and linked to business goals. All managers understand their role within delivering the business goals by following the people strategy.
This can often be difficult to achieve and leaders need to understand the relationship between good managers, staff motivation, employee retention and successful business. Only when the people strategy is embedded and aligned with the business strategy can it be said that the vertical and horizontal lens are aligned. HR strategy provides a road map to creating value through the company’s workforce. Managers need to be able to answer the following question. Which skills and competence are most critical for the business to deliver the future business goals?
Converting HR strategies and initiatives into tangible business value requires an appropriate delivery along with a good foundation of HR capabilities which define business driven performance measures.
Creating value through HR strategy – the vital questions
When was the last time you asked your managers:
- What have you been doing today to bring our business strategy to life?
- What do you need in order to improve business performance?
- What skill gap do we have in the business?
- What are you doing to create a culture of motivation?
When was the last time you asked yourself:
- Do your staff know the purpose of your business?
- Do your staff understand their role in delivering the vision?
- Do you have the right human capital with the right skills and attitude?
- Do you know how to avoid strategic drift?
And finally, ‘How transformational is your strategy? Who is your unique HR business partner?’
For more details about how HR could transform your business strategy, please call us and speak to a member of our friendly, experienced HR team on 01473 360170.