The Strategic HR Organisation : Building Competitive Advantage Through People

1. The Strategic HR Organisation: Building Competitive Advantage Through People Patrick M. Wright William J. Conaty GE Professor of Strategic HR Cornell University

2. Developing an Effective HR Strategy • Business, People, and HR Strategy • Business Strategy: Pattern in a stream of decisions where those decisions are about where, how, and with what to compete. • People Strategy: Answers who is important to the business strategy, why are they important, and how can they be leveraged to create competitive advantage? • HR Strategy: Provides a roadmap for how the activities of the HR Function will support the execution of the strategy by having the right people in the right places doing the right things at the right cost

3. Strategic Human Capital Management • What is Strategic HCM? • Strategic HCM consists of defining, designing, developing, and delivering competitive advantage through people

4. Strategy (Deciding) Operations (Doing) Business Operations Business Strategy Business Define Deliver People HR Operations HR Strategy Design Develop HR Function

5. Strategy (Deciding) Operations (Doing) Business Operations Business Strategy Business Define People HR Operations HR Strategy HR Function

6. Define • Defining consists of helping business leaders to identify the people implications of the business strategy including key talent pools (which jobs/people are critical to the successful execution of the strategy?) and key people issues (competencies, retention, engagement, cost)

7. Strategy (Deciding) Operations (Doing) Business Operations Business Strategy Business Roles: Full Contributor Facilitator Subject Matter Expert Define People HR Operations HR Strategy HR Function

8. Strategy (Deciding) Operations (Doing) Business Operations Business Strategy Business Define People HR Operations HR Strategy Design HR Function

9. Design • Design entails identifying the most important priorities for the HR function, and developing an HR strategy to guide the function toward supporting the business strategy

10. Strategy (Deciding) Operations (Doing) Business Operations Business Strategy Business Define People HR Operations HR Strategy Design HR Function Role: Implementer

11. Strategy (Deciding) Operations (Doing) Business Operations Business Strategy Business Define People HR Operations HR Strategy Design Develop HR Function

12. Develop • Develop refers to the creation and/or modification of HR systems and processes that will enable the firm to attract, develop, motivate, and retain the human capability necessary to successfully execute the strategy.

13. Strategy (Deciding) Operations (Doing) Business Operations Business Strategy Business Define People HR Operations HR Strategy Design Develop HR Function Key Issues/Levers: HR Processes HR IT (data) HR Professionals Skills/Perspective

14. Strategy (Deciding) Operations (Doing) Business Operations Business Strategy Business Define Deliver People HR Operations HR Strategy Design Develop HR Function

15. Deliver • Delivery consists of ensuring that HR processes are effectively and efficiently conducted by line managers in the organization to achieve the human capability necessary to execute the strategy.

16. Strategy (Deciding) Operations (Doing) Business Operations Business Strategy Business Key Issues/Levers: Line Managers’ HR Engagement Process Simplicity HR Professionals Competencies Deliver Define People HR Operations HR Strategy Design Develop HR Function

17. Key Findings • Our work reveals the following features of an effective people strategy. • A focus on business needs before deciding what to do. • A good understanding of how the organisation’s people and capabilities enable success. • Clear linkages between HR actions and business outcomes. • Tracking and communicating performance against metrics. • A feedback loop for evaluating the effectiveness of strategy and supporting the planning cycle.

18. Summary • While the research for the report began with a focus on HR strategy, what became quickly apparent is that HR strategy cannot be clearly understood without the context of the business strategy and operations. • While HR strategies varied in terms of formality, codification, etc., the key is that effective HR strategy is seamlessly connected to business priorities.