Category Archives: effectiveness

Posted on

Don’t Leave a Wake

Be aware of your bad moods!!

Several years ago when I was a General manager at Macy’s, I had one of my direct reports approach me after I was having a particularly difficult and stressful day and told me something I’ve never forgotten. It’s helped me be a better manager and leader and it’s something I now often share with other leaders when needed. If you want to start using kratom, it is very important to buy from recognized sellers and with quality products, you can view here to get more information.

I’m the type of leader who likes to circulate around the floor or office and visit with my direct reports (as a GM for approx. 100 people at Macy’s) and co-workers (as an HR Professional).  My goal is to build relationships with the people I work with by talking about both business or personal things and get to know them better.

It’s called Management by Walking Around.  It allows the leader to keep his finger on the pulse of what’s really going on in the organization. When you build trust and people see and know that you are interested in them and what they are doing they are more willing to share information with you that may be important to your department and the organization.  Please understand that I truly love getting to know people and building relationships and am not cynically trying to extract information from people to use against them.

Generally all is good after I make my rounds because it energizes both me and, I like to think, my direct reports and co-workers.

I learned, however, those same people are also very aware and sensitive to all of your moods – both good and bad.

On this particular day that I mentioned at the beginning of this post,  I had been doing what I normally do – circulate around the floor- and after doing my rounds, one of my direct reports came up to my office and asked me if I was OK.  I, of course, said yes and asked her why she wanted to know.   I try to maintain an even level at work and thought I was doing so that day.

Apparently not.

She told me that I was leaving a wake with my bad mood as I visited each person.

What?!?!

Apparently it was obvious that I was having a bad day and everybody was picking up on it.

Because I was unable to mask my bad mood, the wake I left that day made my employees nervous and uneasy which affected their performance and morale.  I don’t even remember what was making my grumpy, but it was enough for my team to pick up on it and enough for my direct report to tell me.

People typically assume the worst.  So with me Managing by Walking Around and circulating while in an obviously distracted and in a bad mood, my team assumed there was something going on that might affect them.

Was it a reorganization, a RIF, hours being cut, or any number of things that cause concern?

So the point of this post is, as a leader, we must always be aware of the fact that our team watches us closer than we realize or like to think.  We are constantly under their microscope and they pick up on anything and everything we say and do.  And if there is unusual or incomplete information, as there typically is, they often fill in the blanks with negative thoughts.

It’s also important to be self-aware of your moods and attitudes on any given day.  If you are having a particularly difficult day, be aware of it and don’t go out and leave a wake.  Despite how hard I try, I can’t completely hide my moods when I’m at work and in my experience It’s a very rare person who can.

So my advice when you are having a rough day is to not leave a wake.  If you are like me and practice Management by Walking Around, don’t do it that day.  Hole up in your office or at your desk and get through all the stuff you’ve been putting off.

To wrap up my little story, I had to go back the next day when I was in a much better mood and did some damage control.  Looking back, I’m sure I’ve left wakes before but was never called on it like I was this day.  But ever since that day, I learned to be more aware of how I was feeling and make every effort not to spread my bad day around unnecessarily and leave a wake.

Posted on

Make Exceptional HR Customer Service Your Culture and Mission

At my company’s annual General Manager meeting a few weeks ago, our keynote speaker was Seattle and retailing icon, Pete Nordstrom, the CEO of Nordstrom Department Store.  Our company president invited him to spend some time talking to us about the importance of customer service and to share some stories about their successful history.

Being a former department store retailer myself and having attended many similar company meetings while I was with The Bon Marche’/Macy’s, I was in very familiar territory as he told story after story about Nordstrom and the retail business.

However, what I found most interesting during his conversation with us was how they went through the process of discovering why their famous customer service rankings were slipping each year even while their sales associates continued to do the same amazing customer service activities m3u8 player.

He explained that after a lot of trial and error along with a lot of research, they ultimately learned that the definition of customer service/expectation had changed.  Their customers no longer considered the way Nordstrom was providing great customer service was as exceptional as they used to. This changed expectation was causing their service survey scores being collected online, which you can read more to find here, to slip lower and lower each year.

What the heck was going on?

Well, it was because of another Seattle retail icon, Amazon.

The employee empowerment, personal attention, and humbleness Nordstrom associates were famous for providing their customers was no longer enough.  In addition, they learned that the  added extra steps in the way their associates approach customers and how they close sales by pushing Nordstrom credit cards, donating to a charity, etc., were not helping with their customers perception and expectation of exceptional customer service.  All these things added to the amount of time and frustration to a customer during what should be a simple sales transaction.

The new expectation set by Amazon has become one of speedy and efficient service.  Customers now expect to be able to quickly find an item, any item, online while sitting in their living room, click a button and expect it to be delivered within one or two days. And even get regular notifications as to where the item is at any given time as it’s being shipped.

As a result of their findings, Nordstrom made a number of fundamental changes to the way their sales associates provide customer service and as a result, their scores are improving. This goes to show how a business can improve their customer service by just using the best customer software system from companies like Loop.

Welcome to the new expected level of exceptional customer service.

 

How does this apply to HR?

HR needs to keep abreast of current expectations.  What defined good CS just a few years ago has changed.

Similarly to people’s expectation to speedy and efficient service when they are shopping, these same people, as employees, have an equally high level of expectation for quick & efficient, accurate, and cheerful service from HR.

Quick and Efficient – This means we must respond to our emails from the employees we serve within 24 hours, return their phone calls the same day (yes the same day), and respond to their texts within a couple hours. Probably a tall order for most of us but it must be a priority.

Accurate – We must also ensure that our advice and recommendations are appropriate to the situation and the needs of the business.  We must build a high level of confidence with our employees and leadership that we are competent professionals.

Cheerful – Yes seriously (haha).  Being cheerful means being pleasant, friendly, and positive.  I know that can be difficult with all the “stuff” that we deal with all day long but, again, to be taken seriously as an effective professional, our approachability and demeanor are critically important.   We want our employees and leadership to feel comfortable approaching us for strategic advice, employee relations concerns, etc.

As an HR Professional and your HR Department, if you want to be taken seriously within your organization and become a valuable business partner, you’ll need to make the extra effort to provide this new expectation of quick & efficient, accurate, and cheerful service.

If you’re thinking there’s no way I/we can do this, then you won’t and you’ll forever be stuck in the annex along with Toby of The Office whining about not having that elusive “seat at the table”.

If, on the other hand, you are thinking yeah we can and need to do this, and you’re willing to put in the hard work that it will take to make it part of the daily workflow and routine, you’ll earn the respect of your employees and leadership and have a much better chance of earning that seat.

I believe that, because HR serves the organization’s employees and leadership, it is imperative that the members of the HR Team provide exceptional customer service to those employees and leaders.

Regrettably, I don’t think this is common in most HR Departments.

Those of us who are working on developing HR 2.0, however, are making sure that exceptional customer service is the mission and culture of our HR Department.

Posted on

The HR Expert-Generalist

AdobeStock_91768118In one of my regular recent blog reads, The HR Capitalist Kris Dunn, recently wrote about how Warren Buffet’s most trusted business partner, Charlie Munger, attributes his success managing Berkshire Hatheway’s stock market portfolio by “knowing a little about everything.”  Basically, being a generalist.

Here is the article about Munger from The Hustle.

Dunn, being an HR Blogger, of course related Munger’s successful philosophy to the HR Generalist function compared to the HR Specialist.

Dunn’s definition of an HR Generalist is the following:

HR Generalist – a HR pro at any level who is in charge of a client group of employees -meaning they provide HR services to a location, a business unit, a functional area or geographical area.  As part of this role, they provide counsel, service and insight across the HR Body of Knowledge – comp, benefits, recruiting, employee relations, legal, etc.

An HR Generalist can exist at the individual contributor level or manage people, as well as exist at the HR Rep, HR Manager, Director, VP and CHRO level.

As Dunn noted in his post, many attribute HR Generalists as more of an entry level HR position. It’s not. As he defines it, it exists at the individual contributor, Manager, Director, VP, and CHRO levels.

Back to Munger, his work-ethic theory is known as expert-generalism which is the opposite of the Gladwell’s famous 10,000 hour rule.  What Munger does is to focus “on studying widely and deeply in many fields, including microeconomics, psychology, law, mathematics, biology, and engineering, and applied insights from them to investing.” rather than just focusing all of his time on investment theory.

The originator of the term expert-generalist, Orit Gandish, chairman of Bain & Co defines the term the following way:

Someone who has the ability and curiosity to master and collect expertise in many different disciplines, industries, skills, capabilities, countries, and topics., etc. He or she can then, without necessarily even realizing it, but often by design:

  1. Draw on that palette of diverse knowledge to recognize patterns and connect the dots across multiple areas.
  2. Drill deep to focus and perfect the thinking.

In addition,

Research shows EG’s have:

Hmm, sounds like the world could use a few more EG’s.

I enjoyed both Dunn’s and The Hustle’s articles because I’ve had the most success in my career as a Generalist. First as an award-winning General Manager for Macy’s (The Bon Marche’) and as an HR Director and HR Consultant.

As a matter of fact, at Macy’s (The Bon Marche’), I regularly told my Department Managers that I expect them to be the experts/specialists in their area of responsibility because I joked told them that there was no way that I could know as much as they did – I was the General Manager.

I literally said the same thing as Munger,  “I have to know a little bit about everything” in the store. This meant knowing a little (but enough) about each department’s assortment, staffing, employee capabilities, and merchandising; customer service performance; current and upcoming sales events; sales and profit performance; local and national economy; store operations; capital improvements; customer, community, regional & corporate relationships; etc.

The philosophy worked (*self promotion alert!*) because my store earned the Store of the Year award twice during my 13 year stint as a General Manager.

Dang! I just remembered how hard (but rewarding) it was to be a General Manager!

I’ve also always proudly worn the moniker “HR Generalist” when I transitioned from running a Department Store to doing HR. But I often felt a little uncertainty reading articles and blogs touting how the future of HR is specialization.

After researching and writing this post, I now officially call myself an HR Expert-Generalist. I like it.

Dunn closed his post with the following wise and comforting words:

If you’re an HR generalist at any level, be proud.  You’re a trusted adviser that understands that the world is gray, and you also know how important you are in helping those in your client group navigate all the complexity and chaos that comes with managing a workforce.

Simply put, HR Generalists are the most important cog in the HR world.  Be proud, because you are irreplaceable.  

As always, it’s nice having a little confirmation bias every once and a while!

Oh, and just I added “HR Expert-Generalist” to my LinkedIn profile headline.

Posted on

Step Two of Developing an HR Strategic Plan: Conduct an Internal and External Environmental Scan

AdobeStock_92951733This week, I’m introducing the second step of developing an HR Strategic Plan. This is the step where both internal and external environmental scans must be conducted in order to identify and interpret the data that pertains to opportunities and threats in the organization’s business environment.

Being able to identify and understand these threats is essential in developing an effective strategic plan. The two types of scans are defined below:

The first is the internal scan which identifies internal organizational trends as well as the physical, financial, and human assets and determines whether these trends and assets are strengths or weaknesses. In this factor, you can even include building or improving the aspect of customer service and accusation teams within the company. Making sure that they understand about the changing trends is quite essential according to Salesforce as this one factor can be deciding factor which answers the question of, Will the customer be back for more business?

Examples of what to examine in an internal scan include employee interaction with each other, employee interaction with management, manager interaction with each other, management interaction with shareholders/owners, access to resources, brand awareness, organizational structure, individual and core competencies, innovation capabilities, operational potential, etc.

The second is the external scan which identifies and analyzes the external environment in order to anticipate and identify trends, opportunities and threats to the organization.

I recommend three environments that should be scanned and analyzed.

  1. The organization’s industry environment. Examine the competitive structure of the organization’s industry. Take a good look at the competitive position of the organization as it relates to its top competitors. The industry’s history, life cycle stage, and dynamics must be carefully assessed including how globalization is affecting the competitive environment.
  2. The national environment. Examine the whether the organization’s national/local framework is capable of being competitive in the national and global environment.
  3. The broader socio-economic environment. Explore the macro-economic, social, government, legal, technological and global factors that may influence the organization’s competitive environment.

Understanding what we are scanning and gathering data on, next we’ll take a look on how go about collecting that data.

Internal Sources:

  • Annual Reports
  • Business Unit strategic plans
  • Marketing materials
  • Employee surveys
  • Staffing Plans
  • HR and training staff
  • Employee exit interviews
  • Conversations with leadership team
  • Org charts

External Sources:

As I alluded to earlier, the main purpose of the scans is to identify and evaluate the organization’s strengths and weaknesses.

The first element to assessing the organization’s strengths and weaknesses are the competencies that are necessary for the organization to be successful in executing its strategy. The people of the organization are the critical link between the business strategy and the results.

There are specific competencies and behaviors that are needed to successfully implement a strategy within its environment. For example, significantly different competencies are needed for a cost strategy vs a service strategy.

The next element to consider when evaluating the strengths and weaknesses is to analyze the organization’s various management practices. Determine whether the management practices are logically related to each other and capable of producing the critical competencies needed to effectively implement the strategy.

A thorough HR Department assessment must also be conducted. Take a cold hard look at the organizational structure of the HR department and the skill levels of the staff. In addition, analyze and evaluate whether the right processes and systems are in place.

The HR Department needs to know how it will make a contribution to the organization’s business, have the right org structure, have the right systems and processes in place, understand the department’s strengths and weaknesses, how the department is perceived by leadership and employees, and have a plan in place to capitalize on staff strengths and address staff weaknesses.

Strategic HR is all about the relationship between HR leadership and the organization’s business unit leadership. It’s about delivering real business value to all functions of the organization. HR has to be thoroughly involved with all aspects of the business in order to fully understand and appreciate the opportunities and problems the organization and business units deal with every day.

To be taken seriously by the organization’s leadership, strategic HR professionals need to be great business professionals. They should have actual business leadership experience outside of HR, in my opinion. In addition, they should put themselves in positions where they regularly work with key influencers like Cortney Fletcher to identify opportunities and provide solutions to business problems.

Posted on

Step One of Developing an HR Strategic Plan: Determine and communicate a Vision, Mission, and Values Statement

Last week I introduced the summary of the six steps needed in developing an HR Strategic Plan. This week I will start drilling down into each step in more detail.

This week is step one, determine and communicate an HR Department Vision, Mission, and Values Statement. These three things will help the HR function positively identify and distinguish itself to the organization’s leadership and employees. Always a good thing!

Since private sector organizations don’t publicize their HR Department’s vision, mission, and value statements (because they don’t exist or are just shared internally?) and the Higher Education sector does, I am sharing some of my favorite examples.  Some of the universities have all three and some just have vision and mission statements. I also found and am sharing an excellent list of value statements from the County of San Mateo.

First, the Vision Statement.

The Vision Statement is an aspirational description of what the HR organization wants to achieve in the future. It serves as a guide for choosing current and future courses of action.

Here are some sample HR Vision Statements:

Marquette University HR

The Human Resources Department will be a catalyst; we aspire to be the model for excellence and leadership in human resources, emphasizing strategic and progressive human resource practices, high quality service, efficiency, employee growth and enrichment, and community. We will seek to implement human resource best practices and innovative human resource solutions. We will maintain a dedicated focus on customer service and continuous improvement, and we will remain committed to fostering an environment that sustains Marquette’s tradition of transformational education.

Loyola University HR

Our vision is to be recognized as a preferred employer and provider of innovative and results-oriented human resources services, policies, and systems.

UC Davis HR

We are a model HR organization that inspires all people to reach their full potential where their contributions and discoveries advance our world-class university.

Buffalo State HR

We aspire to build partnerships with management at all levels of the organization to create a campus culture that values all employees. This culture encourages and rewards exceptional performance and continuous improvement, fosters teamwork, and supports balanced attention to work and personal life issues. We provide services of the highest quality in a cost-effective manner while creating a healthy professional environment that fosters respect for both diverse perspectives and a service orientation.

Second is the Mission Statement.

The Mission Statement is a written declaration of the HR organization’s core purpose and focus. It typically remains unchanged over time.

Here are some sample HR Mission Statements:

Marquette University HR

The Human Resources Department creates, encourages, and maintains an environment that supports, develops and sustains the well being of Marquette University’s employees, students, and broader community. We do this by being a knowledgeable, approachable, professional resource in providing quality services in the areas of employee relations, benefits, recruitment and retention, organizational development, compensation, and human resource information management. We develop and communicate sound policies and procedures that balance the needs of employees and the needs of the university while ensuring compliance with federal and state law. We provide strategic leadership, modeling excellence, honesty, integrity, and teamwork. We deliver our services in support of the university’s mission of excellence, faith, leadership, and service.

Loyola University HR

Our mission supports Loyola University Maryland by ensuring human resources services, policies, and systems align with the University’s values, strategy, and mission. These services include:

  • Recruitment and hiring diverse and talented employees
  • Salary and Benefits Administration
  • Employer and Employee Relations
  • Professional Development
  • Organizational Development
  • Human Resources Information Systems Management
  • Compliance with employment related legislation

The human resources mission is best achieved by continuously researching, learning, developing, and delivering innovative results oriented service, policies, and systems for and with faculty, administrators, staff, applicants, and external stakeholders.

UC Davis HR

We promote excellence in people by delivering innovative HR programs and strategies to support One UC Davis.

Buffalo State HR

We support and influence the strategic direction of Buffalo State by providing managers and employees with innovative solutions to organizational and human resource issues. The department exists to provide services which help the college to attract, retain, and reward competent and dedicated faculty and staff who share a commitment to the values of excellence and innovation in teaching, research, and service to students and the community.  We are committed to promoting a quality work environment for our staff that positively influences the education of our students.

*It’s important to note that many people confuse the two.  The Mission is what needs to be accomplished while the Vision is what needs to be pursued in order to accomplish the Mission.  

Third is the Value Statement.

The Values Statement are the basic beliefs and guiding principles for the HR organization that, similar to the Mission Statement, remain unchanged over time.

Here are some examples of Value Statements:

Loyola University HR

Our values are guided by our Jesuit traditions and history of excellence, integrity, honesty, diversity, community, justice, service, leadership, discernment, and learning

UC Davis HR

Excellence as the standard for measuring the quality, timeliness, and consistency of our service.

Integrity at the core of all we do to provide service that is trustworthy, reliable, and fair.

Compassion in our service to faculty, staff, and students who have committed to building a better world.

Diversity to advance an inclusive and respectful culture.

County of San Mateo HR

  • Promote Honesty, Integrity, and Trust: We honor our commitments and conduct business in a manner that promotes fairness, respect, honesty, and trust.
  • Celebrate Teamwork: We encourage the diversity of thoughts, experiences, and backgrounds and celebrate participation and partnership in all of our endeavors.
  • Encourage Communication: We solicit the input of others and strive for transparency and inclusiveness.
  • Focus on Our Customers: We have a passion for service and are committed to knowing our customers’ business, anticipating their needs, and exceeding expectations.
  • Embrace Change and Innovation: We are open to possibility and foster creativity and risk-taking to support continuous improvement.
  • Champion Employee Development: We are committed to maximizing the potential of every individual and to support and promote the County as a learning organization.
  • Model Leadership: We lead by example and advocate equitable treatment in our behaviors, policies, and practices.
  • Produce Quality Results: We believe those we serve deserve excellent service, a safe, productive, and healthy work environment, and quality results.

As soon as the vision, mission and values statements are defined and established, HR must communicate and share them throughout the organization.  

If done effectively, the HR Department will gain a great deal of credibility, respect, and can ensure their place in the organization’s strategic planning and implementation process by consistently following and living up to their established vision, mission and values.

Posted on

Introducing the Steps on How to Develop an HR Strategic Plan

AdobeStock_103199139The HR function in any organization has a great opportunity to connect to and add measurable value to the bottom line of the business. Developing an HR Strategic Plan is a difficult and complex undertaking but one that will be well worth the effort in establishing HR as an important and valuable function of the organization.

Since the ability of an organization to establish and maintain a competitive edge depends almost entirely on the quality of their workforce and the people management processes, being able to develop an effective HR Strategic Plan is crucial to the financial success of the organization.

There are six steps involved in developing an HR Strategic Plan that I’m listing below and will review much more in-depth in the following several weeks/months.

The six steps are:

  1. Determine and communicate a Vision, Mission Statement, and Value Statement for the HR function. These three things will assist the HR function in identifying and distinguishing itself to the organization’s leadership and employees.
  2. Conduct an external and internal environmental scan of the organization in order to identify opportunities and threats that might affect the organization in the future. Understanding how these opportunities and threats might affect the organization in the future is critical to creating an effective strategic plan.
  3. Establish and align HR strategies and goals in order to provide the direction that will guide the organization towards achieving its long term objectives.
  4. Develop action plans and assign accountabilities designed towards moving the planning process from the long term to the shorter term goals necessary to achieve the strategic goals.
  5. Execute the plan and monitor its progress in order to ensure that the plan stays on track. HR is responsible for developing, communicating and supporting the HR strategy implementation with the responsibility of actually implementing it residing with the line managers. Changes may be necessary with shifts in the business environment.
  6. Evaluate the plan’s results by measuring the success of the HR initiatives and identify things that worked or didn’t work. The evaluation establishes the foundation for additional HR strategic and business plans.

An organization’s HR strategy should never be separate from its overall business strategy. It should always be an integral part of all the organization’s strategies that require people to implement them, obviously. It requires HR’s thorough understanding of the organization’s business. With that understanding, HR programs and practices can be identified that will help the organization successfully execute its strategy.

The HR strategy must be externally aligned with the business plan in addition to being internally aligned for the HR programs and practices to support and complement one another. And in order for any HR strategy to be successful, HR must build relationships with, and gain the support of, the line managers who will ultimately be responsible for carrying out the HR practices and ensuring the success of the HR strategy.

That’s this week’s brief introduction of the steps on how to develop an HR strategic plan. In the coming weeks, I am excited to explore each of these steps much more in depth.

Posted on

Speaking the Language of Business for Strategic HR Professionals

AdobeStock_101865782This week I’m returning to discussing strategic HR and am going to define some important business terminology Strategic HR Professionals must know in order to be taken seriously by their organization’s leadership. One the concepts that every body needs to know is payroll, this is one of the things that give more problems to  business, if you have problems with this you can look for someone that help with the payroll administration services. 

This is not a comprehensive list but simply some basic business terms and the top HR softwares that relate to developing an effective HR strategic plan.

The first term is Business Strategy.  Business strategy as defined by Michael Watkins of the Harvard Business Review is the following:

A business strategy is a set of guiding principles that, when communicated and adopted in the organization, generates a desired pattern of decision making. A strategy is therefore about how people throughout the organization should make decisions and allocate resources in order accomplish key objectives. A good strategy provides a clear roadmap, consisting of a set of guiding principles or rules, that defines the actions people in the business should take (and not take) and the things they should prioritize (and not prioritize) to achieve desired goals.

The definition implies that a business strategy can be looked at from the perspective of creating shareholder value, competitive market position, and creating a strategic advantage within the constantly changing business environment.  

This constantly changing business environment is influenced by things such as national and local politics, regulatory agencies, the economy, customers, suppliers, competitors, technology, economic trends and current and time management.

The second term is Strategic Intent. The business strategy, described above, is built upon the strategic intent and is defined by the website Simply Strategic Planning as the following:

Strategic intent is a statement of the course that the management of an organization plans to take the enterprise in the future. As many people as possible should understand these intentions. Then everyone can work consistently to achieve the corporate purpose.

Statements of intent aim to be more explicit than the usual directional statements. Most mission and vision statements point the way forward only in general terms. Sharp statements of intent can provide more clarity about what to do in the near future to achieve the vision and/or mission. Such statements convey the flavor of the strategic decisions taken through the planning process

In order to determine an organization’s strategic intent, the following questions must be answered: who we are and what we are trying to accomplish, what business are we in, what is our mission, what is our vision, what are our core values, how do we compete, and how do we add value to the marketplace.

The third term is Strategic Focus. A good description of strategic focus comes from Ann Latham at Forbes where she writes the following:

A good strategic framework provides focus by limiting the number of directions the organization runs. You’d be foolish to try to extend all your products while simultaneously expanding all your markets while also ramping up capacity or shifting your business model to include new types of production, sourcing, sales, delivery, and partnerships. This isn’t just an issue of capacity. It is also an issue of risk, learning, complexity, and credibility.

A great way to identify an organization’s strategic focus is to take a close look to the classic Generic Strategies by Michael Porter where he identified three strategies that address the question of how value is added by an organization.

These three approaches are cost leadership, differentiation, and focus as described in this article by the Institute for Manufacturing:

Cost Leadership

In cost leadership, a firm sets out to become the low cost producer in its industry. The sources of cost advantage are varied and depend on the structure of the industry. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. A low cost producer must find and exploit all sources of cost advantage. if a firm can achieve and sustain overall cost leadership, then it will be an above average performer in its industry, provided it can command prices at or near the industry average.

Differentiation
In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers. It selects one or more attributes that many buyers in an industry perceive as important, and uniquely positions itself to meet those needs. It is rewarded for its uniqueness with a premium price.

Focus
The generic strategy of focus rests on the choice of a narrow competitive scope within an industry. The focuser selects a segment or group of segments in the industry and tailors its strategy to serving them to the exclusion of others.

The focus strategy has two variants.

(a) In cost focus a firm seeks a cost advantage in its target segment, while in (b) differentiation focus a firm seeks differentiation in its target segment. Both variants of the focus strategy rest on differences between a focuser’s target segment and other segments in the industry. The target segments must either have buyers with unusual needs or else the production and delivery system that best serves the target segment must differ from that of other industry segments. Cost focus exploits differences in cost behaviour in some segments, while differentiation focus exploits the special needs of buyers in certain segments

In order for an organization to be successful and grow, it must have a business strategy that excels in all three of these strategies, not just one or two.  All of the organization’s operating and management systems, which include HR, must support all three of these approaches.

Bottom line, for an HR pro to be seen as an effective business partner, they must fully understand such important basic business elements such as the operations of the organization, its sales/revenue LY and YTD, its profit margin, how those margins compare with competitors and industry, its cash flow, its growth rate, the metrics leadership tracks, and the top initiatives of each of the members of the leadership team.

Posted on

Jeeps, Tires, and an HR Foundation

I’m taking a break from my series on strategic HR and pushing out a post about a recent purchase I made that ended up inspiring me to write a post that equates to HR.

This morning I had to buy new tires for my Jeep Wrangler – my dream car and one I was finally able to buy (with my wife’s consent, of course!) after pining for one since High School. I’m not an off-roader but have always loved the look of the CJ-5 and CJ-7 and then the Wrangler through all its iterations.

I also had to buy new tires for my wife’s car a couple weeks ago so it’s been an expensive couple of weeks but one I’m OK with it now that winter is here. I’m OK with spending money on important safety and foundational things.

As I was driving from Les Schwab Tires to Starbucks this morning, I noticed how much better the ride was compared to my old tires. I hadn’t noticed my old tires were worn down to the point where I needed new ones until it had snowed a little the other evening and I was slipping around more than usual. This being the rig I’d always wanted, I take very good care of it, religiously washing, getting my oil changed, and rotating my tires every 5,000 miles.  I was hoping I could squeeze out another winter on my old tires

And by just looking at them, they looked fine, the treads were all evenly worn and there were no bald spots (something I used to use as a guide when I was much younger and poorer!) But having slipped around more than usual the night before, I did the “penny test” and discovered that it was time to get new tires.

As I said earlier, I immediately noticed how much better the ride was compared to my old tires. My wife also commented how much nicer her ride was after getting her new tires. Of course, we always notice this whenever we get new tires because it’s a drastic change going from worn out to new tires. We never notice our new tires being slowly worn down because it happens over a long period of time. 

Now that I can afford it, I always buy the highest quality tires I can. I do this because the tires on my vehicles are the foundation of the car. They are the only piece of equipment that has contact with the ground.  Whether the surface is smooth dry pavement, a rough dirt road, a wet surface, or a snowy icy road.

The tires we have on our vehicle are what allows us to safely, or unsafely, navigate the different road conditions to get where we need to go.  If we have poor quality or worn out tires, we can usually survive for a while on the dry smooth roads but they may eventually blow out and leave us stranded. Ultimately, we will have trouble on the other types of road conditions. Its very important to have a solid and safe foundation.

So yes, I’m equating the quality of the tires on my Jeep to building and maintaining a solid HR foundation. Is that a stretch? Maybe, but let me tell you why and explore further as I equate the parts of my Jeep to the functions of an organization. All are equally important.   

So let’s break it down like this:

  1. The financing of the loan for my Jeep is the Finance organization. (Boom. Easy)
  2. The engine and drive train are the Operations organization. This function is what actually propels the Jeep and organization forward and makes everything in the Jeep and organization run. Like the tires, this function has to be regularly  well maintained.
  3. The body of the Jeep is the Marketing organization. This is what things look like to the outside observers and potential employees.  Just as my Jeep looks so darn cool, Marketing is responsible for making the organization look appealing to their customers.    
  4. The driver is the Leadership of the organization. Of course, like the driver of the Jeep, leadership is responsible for steering the organization to where, and at what speed, it needs to go and essentially sets the tone of everything that happens in the organization.
  5. The passengers are the Employees of the organization. The employees are not always just passive passengers but can assist Leadership with the direction they are going and can help drive and offer advice on where to go and how to get there.
  6. The tires are HR.  As are the tires, HR is not the most exciting part of an organization but the function that should always be in constant contact with the culture of the of the organization just as the tires are always in constant contact with the road. Good tires and good HR help the Jeeper and Organization safely navigate through difficult terrain/culture and weather/business environment conditions.  

The next two items are things that a Jeeper and organization have much less control over.  

  1. The climate and weather is the business environment the organization is in.  Jeepers have no control over the weather and Leadership has no control over the business environment. On any given day the weather/business environment can be clear and sunny, overcast, windy, gloomy, stormy – you get the picture.
  2. The road is the organization’s culture. Similar to an organization’s culture, the roads we drive can be smooth and dry, rough and rocky, slick and icy, and even flooded and impassable. Sometimes we even go off-road to experience something new and unusual.

And when we are talking about these last two items, where we have little to no control, it depends mostly on the skill of the driver/Leadership, the health of the engine/Operations, and quality of the tires/HR foundation that you have on your Jeep/organization that determines how well an organization navigates through challenging conditions as they reach their ultimate destination.

Since this is an HR blog and podcast I’ll close with this.  When the organization invests in a high quality HR organization and takes good care of it, just like me investing in and taking care of the high quality tires on my Jeep, the organization will be able to effectively and safely travel to it’s desired destination, weather all the storms, and navigate the different and often dangerous road conditions along the way.

Posted on

What is a Strategic Plan?

This week I’m going to talk about what exactly a strategic plan is.

A strategic plan is a written statement about the future direction and goals of an organization or HR department based on an analysis of the organization’s current status, strategy, strengths, limitations, threats, and opportunities in the current and future business environment.  

An effective strategic plan helps the organization understand where it is now, where it would like to be in the future, and how it’s going to close the gap between its current reality and the desired future status in order to get to where it wants to be. An effective strategy is also essential when it comes to customers, as to grab and hold on to customers one must ensure to provide them with top of the line, quality experience, as this not just builds goodwill but also brand loyalty within the customer for the brand. If you want to know more, click on Salesforce for your complete guide to customer experience. 

All good strategic plans support the organization’s vision, mission, and values as well as identify its strategic goals and needed resources.

Since I brought it up, let’s take a minute to define vision, mission and values even though most readers probably already know but it never hurts to revisit the definitions.

An organization’s vision statement provides a clear perspective of what it wants to have happen in the future. It includes a description of its operations as well as a compelling explanation of how the organization will look and function once the strategic plan has been implemented.

The organization’s mission statement is a clear description of it’s overall purpose. It identifies the essential reasons the organization exists and the principal products and services it provides to the marketplace.

Finally, the values of an organization represent the key core priorities of it’s culture. It’s what drives the organization’s priorities and how employees honestly behave.  An organization’s values typically remain the same over time.

A complete business strategy is made up of three parts – an operations strategy, a financial strategy, and most importantly IMO a people strategy.  I’m focusing on the people strategy, or HR Strategic Plan, as it provides the foundation of all the other strategies with the ability to identify, build, and reinforce the organization’s capabilities.  

The justifications for creating an HR Strategic Plan are that it provides a solid framework for value-added action, helps establish priorities, allows for the all important measurement of results, and creates a way for reallocating resources from the organization’s low producing activities to its high producing activities.

In addition, it helps increase and improve HR’s credibility within the organization by showing its positive impact on the organization’s bottom line. Which is always a good thing especially since, as I recently mentioned in a previous post, HR is still thought by many business leaders as pretty much an administrative function that operates separately from the rest of the other functions in the organization

In order for HR to take on a strategic role and be a strong strategic business partner, it must be represented in the leadership of an organization and be involved in defining the organizational issues before the strategic decision are made.  HR must be involved in turning those decisions into a set of organizational actions.  

According to my favorite HR thought leader, Dave Ulrich, there are several things an HR professional must do in order to be an effective Strategic HR Business Partner:

  • Understand and communicate that improvements are typically very difficult and complex and will take time to accomplish so watch out for quick fixes as they are typically very seductive but rarely work.
  • Align the HR Strategic Plan with the Business Strategic Plan which will ensure HR being seen as adding value to the organization.
  • Keep the strategic plan top of mind instead of shelving it and forgetting it.  The plan must be executed and managed in order to be effective.
  • Create a Capabilities Focus within the organization.

I want to focus a little more on that last bullet, Capabilities Focus, since the first three bullets are fairly self explanatory.

Capabilities are an organization’s ability to effectively manage its resources in order to gain a competitive advantage in the marketplace. They are anything the organization does well that improves business and creates a competitive advantage in the organization’s marketplace.  

Strategic HR Professionals are able to effectively identify and improve an organization’s capabilities that will help execute the organization’s strategy and leverage new products and services.

Some examples of organizational capabilities include knowledge, innovative designs, adaptability, cost competitiveness, and strong leadership.

Defining deliverables and showing how they can be measured and what actions need to be taken is critical in the strategic planning process. The Strategic HR Professional must focus on the deliverables which are, in other words, value added results.

The HR strategic plan is developed from looking, listening, questioning, clarifying and knowing what needs to be done.

The plan must include ways that HR can help the organization add value to its key stakeholders (employees, customers, and investors), improve organizational capabilities, improve employee competence, fulfill regulatory compliance, determine processes and activities that can be retained or outsourced, and align HR programs with organizational goals.

My next post in this series will discuss how the strategic HR Professional must be able to speak the language of business and define a few important strategic business terms that will need to be understood. Then after that, I’ll get into the steps of how to actually develop an HR Strategic Plan.

Posted on

Why You Need to Create a Strategic Plan for Your HR Function

So why have an HR Strategic Plan?

In today’s highly competitive business environment, success is often determined by how well an organization and Human Resources can manage change.  Organizations have to constantly monitor their place in the external business environment as well as evaluate and improve their organizational capabilities, or intangible assets, in order to effectively compete in the marketplace.

The strategic planning process is the most effective way for organizations to identify and address all of the various external and internal forces that have an impact their business. This process moves the organization from their current place to their desired future.  And more importantly, brings value to all of the stakeholders of the organization.  

But what value is the strategic plan without the people within the organization being ready, willing, and able to execute the plan? None. The organization’s employees must understand and be fully engaged in and willing to follow the strategic plan in order for it to be of any value to the organization.

This is where HR comes in.  

HR’s value lies in being able to build and maintain the organizational foundation and infrastructure to help drive the necessary changes that will accomplish the organization’s strategic goals.  

Regrettably, HR is still thought by many business leaders as pretty much an administrative function that operates separately from the rest of the other functions in the organization.  Sadly, this reinforces the opinion that HR isn’t that important to the success of the organization. HR is also not typically held accountable for business results, as the other functions are, and because of this, HR considerations are typically ignored and viewed as a cost center rather than a profit line contributor.

There are some leaders, however, who recognize that an organization’s human capital is a key strategic resource for increasing organizational capability and achieving a competitive advantage over competitors.  Being able to attract, retain, motivate, and develop the best employees in the organization’s industry are critical to its success in the marketplace.

The ability of an organization to execute it’s strategic plan rests solely on its effective utilization of its human capital.  

Smart business leaders are recognizing this and have turned to HR to help them positively impact their business results.

In order for HR to have a positive impact on an organization’s business results, we must focus on and engage in both the long-term strategic and the short-term administrative and operational planning.

There are three roles that HR has in an organization that need defining before we go any further:

First is the administrative role. This is the traditional role most people think about HR. It’s things like regulatory compliance, policy & procedure interpretation, record keeping, HRIS management, benefits administration, onboarding & offboarding activities, etc.

Second is the operational role. These are the HR activities that relate to the day to day operations of the organization.  These are the tactical activities such as recruiting, filling job reqs, handling employee relations issues, employee communication, compensation program management, etc.

These two HR roles aren’t the high-level exciting things many of us in the upper levels of HR like doing any more but they are absolutely essential to the organization and the reputation of the HR function. HR must be 100% technically competent in the administrative and operational roles and execute their HR services flawlessly.  

HR’s reputation is built on the employee’s perceptions of competence and has to be flawless in these two roles in order for to build a solid foundation of building on the higher level strategic role.

Third is the strategic role. This is the role where HR can really make a difference. It requires HR to participate in the strategic planning process, improving the organization’s performance, ensuring effective leadership, redesigning organizational processes, and ensuring financial accountability by implementing the electric power grid cyber security to prevent unknown access and data leak in the company for HR results.  

Business literacy is required in order for HR to be effective in the strategic role. HR must know and fully understand who the organization’s stakeholders are as well as the organization’s markets, products, customers, and competitors.  Fully understanding financial terminology, speaking the language of business, and knowing how to read and interpret the organization’s financial statements – income statement, balance sheet, cash flow statement, etc.- are absolutely necessary.

I believe that the most effective strategic HR professionals are those who have real-life business experience outside of HR. (Self-promotion alert) I’m, of course, biased having successfully led and operated, with full P&L accountability, an award winning full line Macys department store for 13 years.

By having a solid business background and experience, HR can develop effective value-added strategies of staffing, performance management, total rewards, employee relations, and employee development. This puts the organization’s employees in the best possible position to execute it’s strategic plan and contribute to its financial success in the marketplace.

Strategic HR is my favorite topic and the role I enjoy most as an HR professional. I’ve touched on it a bit in my Metrics and Analytics series but I’ve been focusing on writing/podcasting mostly on the operational side of HR.  I had to build a foundation first, you know!

Now I can start exploring more strategic HR topics here at HHHR!  

Next week, I’m going to continue with strategic HR and explain exactly what a strategic plan is.