The Strategic Pillars of Human Resources

Earlier this summer, our colleague Mark Nevins was invited to participate in and moderate a panel forum on the topic of strategic human resources. The panel was conceived by Mark Berkowitz, Senior Vice President at Ambrose, a firm that partners with boutique organizations to provide outsourced HR solutions.

The panel participants, a highly intelligent and energetic group, were Greg Stoskopf, a director in Deloitte's Human Capital practice; Leander Lesure, Vice President of Human Resources at American Express; and Jeff Smith, Managing Director and Head of Global Human Resources at Blackrock. The audience was made up principally of leaders from private equity firms, hedge funds, and other similar small-sized businesses which are dynamic, growth-minded, and employ smart and demanding professionals.

The dialogue was lively from the get-go, as the panelists and audience wrestled with what ended up being the core question of the day: What, really, are the key areas where human resources drives strategic value for a business? What are, in a phrase the group came up with, the “strategic pillars of HR”?

After a fair amount of conversation, the group settled on five Strategic Pillars of Human Resources:

1. Performance Orientation: Aligning HR processes first and foremost with the company's business and strategic objectives. Ensuring that HR is seen as a function whose raison d'etre is to support the achievement of those objectives. Eliminating low value-added HR activities.

2. Effective Talent Management: Getting the very best people, and putting them into the right roles. Retaining high performers, and actively moving out the people who are not a good fit. Conducting pragmatic and focused organization and succession planning.

3. Explicit Culture: (Related to talent since people create culture.) Foregrounding culture, and being explicit about values and expectations. Ensuring that critical positions are held by high performers who also truly live the culture and values.

4. No-Nonsense Compensation: Rewarding the desired behaviors and values as well as performance. Paying for what people do, as well as how they do it. Being sensitive to the importance of non-financial rewards and recognition.

5. Learning and Development: Treating people as assets whose value can be increased through investment. Making teaching and learning part of the day-to-day experience, not just the job of training programs. Starting learning and development from the top of the house down.

Since the audience was mostly made up of leaders of smaller companies that often have limited resources and infrastructure, and sometimes don't even have a true head of HR, the conversation stayed pragmatic and action-oriented. Light on theory, heavy on “what really works.”

The other excellent question of the day, directed at each of the panelists, was: “If you were to start a company tomorrow, recognizing that resources would be limited, what aspects of HR would you absolutely not let go of?”

The answers the panelists gave were consistent and powerful:

- Keep it simple: Focus on the most important aspects of organization effectiveness, including clarifying strategy and ensuring alignment of the senior team.

- Foster clarity of purpose: What kind of people do we need to accomplish our goals? How can we assess them and measure their effectiveness? What are the standards and expectations?

- Put the focus on people not processes: Strategic recruiting; simple and clear feedback and performance management; high impact development programs; reward and promotion criteria that reflect values as well as results. Don't bury the strategic in the transactional.

- Key on a few core values or drivers of culture, and propagate them: For example, client focus, flexibility, results driven, "talent is king."

- Ensure that the business owns the talent: Hold managers accountable for developing and retaining people, and make sure that the people strategy is visibly driven from the top of the house.

The Ambrose panel was a great opportunity to take a fresh look at the core assumptions that drive how we think about and manage our people and organizations. Of course, the question for leaders is: Where are your focal areas in terms of people and human capital? Where does your company focus its organization and people development efforts? What are your organization's "strategic pillars of HR," and what are you doing to ensure their strength, effectiveness, and vitality?

We'd love to hear your thoughts and reactions. Send us a note:

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