Monday, January 30, 2012

Moving from Transactional HR to Strategic HR

StrategicLand, where we as HR professionals have wanted to be, for at least two decades. Picture this scenario:

You are the VP, Human Resources for a very profitable company that is growing internationally. You realize to do so, that you need to become more strategic than transactional as far as what HR delivers to the business. The problem is this....the leadership of your organization doesn't understand why HR needs to be strategic. Things are going well...the company is in growth mode and making money. So the question is, "Why change if it ain't broke?"

Tell me how you answer this question. In other words how do you make a business case in this scenario. We know, it's the right thing to do and we can point to anecdotal reasons. But, when budgets are tight and CEO's are more risk adverse than ever, what would be your "case" for taking HR to the next level.

I was delivering some training last week and was kidding with my attendees that I could make a fortune writing business cases for HR leaders. It is a skill that most other functions in the business have, but HR has not been used to this practice.

For me, the business case is a must have and it gives clarity to the issue at hand. The business case assists the writer in formulating the problem, the objectives, the proposed solutions, the timelines, and the resources needed in a succinct and logical way. The decision maker can then make a decision based on fact and expected outcomes.

















So tell me....Have you used the business case and how would you use it around moving from a transactional HR department to a strategic one as in my scenario above?

If you comment and send me your feedback...I will send you a business case template of your very own!!

9 comments:

Ed Nangle said...

Hi Cathy, I find that there are very very few HR Managers that have the skills, or the education, or the experience, or even the management team that are willing to move from transactional to strategic leadership. Too many HR managers are not in a position of change but just in the follower mode and not leader mode. Most of the HR managers fill an administrative position just following the process that has been in practice for 10+ years and the organization just doesn't get it. It ain't broke so why do we need change? Unless the HR manager is in the position , (VP), to take action, I don't see many even thinking about this concept. I also wonder how many VP of HR are even considering a more strategic role???

Cathy Missildine-Martin, SPHR said...

Thanks Ed....

I agree there are a lot of HR managers in that position of change...but i wonder how they can lead that change.

I believe when the economy heats up and we have a talent issue, that being strategic will be on the front burner...

Some companies are getting ready now, for that.

Thanks for reading and your continued sharing of HR knowledge with me and all of your students. You are a true mentor and an awesome teacher!

Cathy

mike cook said...

Cathy: In my view the fundamental dilemma may be that we resist being business people first and HR professionals second. This is much like the love/hate relationship many of us have with sales. We don't want to be seen as sales people but we cannot survive without selling. For long enough HR professionals have worked backstage in business, the time for dreaming is over because while you dream an HR outsourcer is meeting with your CEP making the "business case" to move the function outside.

Ghaleb Al-Ghoutani said...

This is exactly what we should do. With the limited human resources, know how and different generations factor business will not be able to survive if HR kept as a silent partner. I am not saying this is an easy task, as it involves educating and change management on both management and operations levels. In this part of the world [GCC], human capital is the only challenge any business might face... and guess what, business people are still driving business forward using the old wheel!

Ghaleb Al-Ghoutani said...

This is exactly what we should do. With the limited human resources, know how and different generations factor business will not be able to survive if HR kept as a silent partner. I am not saying this is an easy task, as it involves educating and change management on both management and operations levels. In this part of the world [GCC], human capital is the only challenge any business might face... and guess what, business people are still driving business forward using the old wheel!

Ghaleb Al-Ghoutani said...

Hi Cathy, missed the part of commenting how to use above module to creat a business case. First thing to put into focus is to plot the ultimate objective company wants to achieve in the coming 5-10 years, then quick assesment of the current HR system in place. Out of this, practitioner will be able to list down possible causes behind ability to support the growth plan (I can think about HR not being part of "round table" where and when the decision was made at high level ) so automatically he is know on transactional fire fighting mode trying to focus on execution part to support the "line functions". From the potential causes stage, HR to drill down for potential root cause(s) in an attempt to highlight possible areas of intervention(s). Following this, resources to be thinked about, then cost, availability  and ability. Next is the action plan, metrics and KPIs. This the the farthest I can reach at the moment, and looking forward to hear from you on the last step and the template ... building the business case especially linking it to the bottom line where the juicy part for any CEO reside.

Cathy Missildine said...

Thank you for your comment and reading my blog. I just want to make sure I understand your question. Are you asking about the last step on building a business case?

Cathy

Ghaleb Al-Ghoutani said...

Yes indeed, and to receive the template you promised you are going to share with the commenter :)

Cathy Missildine said...

Ghaleb:

Please email me at cathymissildine@intellectual-capital.net and I will send that template along for you.

Cathy