Developing HR strategy: Building up resources

In the sixth part of our series on developing HR strategy, Keith Rodgers
examines the key issues HR will encounter when dealing with organisational
development

A much-loved subject among academics and management consultants alike, organisational
development spans a huge range of HR skills and activities. From the theory of
leadership and the concept of the Learning Organisation at one end of the
scale, to the mechanics of electronic training infrastructures at the other, it
is a subject that can rapidly spiral out of control.

But, as with other aspects of HR strategy, the overriding priority in
building organisational development initiatives is to define the business
impact. Most of the components are intuitively beneficial in terms of good
management practice – but that alone is not enough. If HR wants organisational
development to be taken seriously in the boardroom, it must be able to show how
it leads to tangible improvements to the bottom line.

In our sixth article examining the central planks of HR strategy, Personnel
Today examines the key issues HR practitioners face.

1. Defining the boundaries

Although there are significant areas of crossover between organisational design
and organisational development, the two are distinct areas of HR strategy.
Design is primarily about building a structure that meets business needs,
particularly in terms of effective cross-departmental working practices and
flexibility. Development is about building the resource to take the
organisation forward.

The crossover occurs because both management philosophies require
organisations to understand where they are starting from – what skills and
knowledge they have – and where they want the business to go.

There are numerous ways that organisational development can be defined, but
at an individual employee level, it can be usefully broken down into four
constituent parts: experience, knowledge, competencies and behaviour.

Competencies are the hardest to define as the terminology is applied to a
wide range of components including skills, abilities and characteristics, such
as ‘openness’ or ‘flexibility’.

Although much development theory has been focused on behaviour, an effective
programme will address all four of these areas at both an individual and
departmental level.

Ultimately, development is also about the kind of company values that an
organisation strives to adhere to. Turning value statements from lip service to
reality is a major endeavour because it frequently requires a shift in
corporate mindset. That will only occur when it is driven from the top down.

2. Leadership development

The age-old argument about whether leaders are born or nurtured is great for
the theorists – but pretty much academic for the HR function. While it is
possible to buy in leadership qualities for specific strategic roles, the issue
can’t be tackled by recruitment alone. In reality, leadership is a quality that
needs to permeate the entire organisation, from CEO down to shop-floor
supervisors. That means most of the individuals filling leadership positions
will require training.

Developing leadership skills requires a blended approach combining business
theory and practice. To begin with, the difference between leadership and
management must be understood. In a seminal article published by Harvard
Business Review in 1990, John P Kotter argued that management is about coping
with complexity, while leadership is about coping with change. To put it
another way, management is essentially a control process that uses tools such
as budgeting to tackle complexity; leadership is about having a vision and the
strategies to turn it into reality.

Once putative leaders have grasped this distinction, pragmatism becomes the
watchword in leadership development. That means focusing individuals on
leadership challenges where they can easily understand which qualities are
required, and have faith that those qualities are within reach.

Most organisations start leadership development at the top, which can be the
hardest area to tackle – senior executives tend to assume they are already
effective leaders, and often find it hard to acknowledge that they are lacking
in an area so fundamental to their role.

These barriers can sometimes be tackled with change management programmes,
where the emphasis is not on tackling leadership qualities per se, but on
building specific skills for new business environments.

Executive coaching, or mentoring, is also an increasingly popular route. Ultimately,
however, corporate culture is the critical factor – if the CEO and the board
encourage openness in tackling the perceived ‘weaknesses’ of individuals, then
half the battle is won.

It is less common for companies to make a concerted effort to tackle
leadership development further down in the organisation, but those that do tend
to focus on frontline staff first. While this is a logical approach, it can
lead to problems if the leadership development requirements of middle managers
are bypassed.

3. Succession planning

Another area where lip service is more prevalent than practical results,
succession planning is a perennial irritant for HR. However carefully a
strategy is mapped out to nurture the next generation of leaders and key
employees, it is inevitable that people will leave and business needs will
change before the plans come to fruition. That is not, however, any reason to
avoid doing it. As well as providing a framework for continuity (however flawed
it may be), succession planning also helps to identify key employees and is a
central plank of staff retention.

It is important to bear in mind that succession planning isn’t a tool just
for senior roles. In highly-specialist areas, it can take years to build skills
and knowledge for specific roles and the loss of key individuals can have a
significant impact on business performance. Demonstrating that knock-on impact
on the business is one way of justifying the need to invest in effective
retention strategies.

4. Training and learning

It is a truism that in tough times, training budgets are one of the first
items to be cut. But as Cheryl Fields Tyler, vice-president of consulting at
the Concours Group, points out, in many cases, it is actually the training
strategy that gets hit the hardest. In other words, companies will continue to
spend, but they invest less in training planning and management and as a
result, have less effective programmes.

There has been some progress on this front. As the concept of the Learning
Organisation evolved in the 1990s, corporate education began to be seen as a
strategic tool rather than an interruption to day-to-day activities. At an
operational level, companies began experimenting with new types of educational
processes, such as computer-based training. At a strategic level, there was
also a shift in corporate mindset which manifested itself in a growing
willingness to learn for the future, rather than to apportion blame for the
past.

Yet, despite those changes, few organisations today take a co-ordinated approach
to learning. In fact, many would struggle simply to put a figure on how much
they spend on training and development. As Tom Raftery, a senior consultant at
Watson Wyatt points out, training is typically seen as a one-off event, not a
process that is integrated with the business. To be effective, all learning
programmes – from on-the-job ad hoc training to classroom-based courses – need
to be structured as part of an overall development strategy.

5. E-learning and the broader business case

E-learning systems provide some answers to this problem. Designed to provide
the platform for new training techniques, these systems allow organisations to
supplement traditional classroom-based training with a range of internet-based
learning options, from live instructor-led sessions to self-paced training
courses.

The core infrastructure, a Learning Management System, co-ordinates the
process and helps organisations to keep track of which courses participants
have taken, a major benefit for both budgetary control and employee assessment.

Although e-learning is often lauded primarily for the cost-savings it
generates, it is most effective when integrated into a broader HR picture.
Linking training information to appraisal, competency management and other HR
systems is fundamental to building a long-term organisational development
strategy. By putting development in the context of performance management,
expenditure can be justified to senior management on a basis they really
understand – business impact.

Case study: Kendle International

When Sherry Gevedon, director of
global training and development at clinical research firm Kendle International,
was approached with a training request at 8pm on a Monday evening, she could
have been forgiven for dismissing it out of hand. Her IT director for global
business systems had an urgent requirement to train 120 people in three
different time zones by noon on Wednesday. That gave her just 40 hours.

In the event, the company was able to get 110 people up to
speed by the deadline – and the remaining 10 received the information that
evening.

The delivery tool was a learning management system within the
group’s corporate university, which offers both structured and unstructured
educational facilities over the web 24 hours a day.

For Kendle, which provides project-based clinical research
services for the pharmaceutical and biotechnology industries, the ability to
react in this way is an essential component of business flexibility. Its
e-learning applications, based on Saba’s Learning Management System, provide
cost savings in terms of reduced travel expenses, lower presenter costs and
opportunity cost. But in a business that needs to respond quickly to changing
market and customer demand, the just-in-time training capability is just as
important to Gevedon.

Kendle’s technology platforms are a core part of its
organisational development strategy, which embraces a wide range of HR
activities. The basic framework is a series of competency profiles, which were
initially developed on the basis of job type and then personalised by line
managers for individual employees. These form part of an employee’s personal
workbook, which features a job description, skill requirements, relevant
courses (such as project-specific training), standard operating procedures for
the clinical environments in which that person operates, and external training.

Gevedon acknowledges that building this information database
was "a long, arduous process", but one that has been adopted by the
executive leadership as a way of delivering quality to customers. The next
phase of the programme is linking employee development to performance
management, primarily through the performance appraisal system.

The company’s organisational development strategy primarily covers
three areas: leadership development, succession planning, and training in the
context of recruitment and employee retention.

The first component, leadership development, is the focus of a
programme that will kick off during the first quarter of 2003 using a series of
web-based courses aimed at entry-level managers, middle managers and the senior
executive leadership. When each module is completed, managers will be assigned
a mentor from their business unit to help them build case-specific scenarios. This
mixture of people led and technology led training is specifically designed to
stimulate learners’ interest.

Succession planning will also be a core focus for 2003. As
Gevedon points out, e-learning is a critical component here – not just because
it provides the infrastructure for training programmes to help develop the next
generation of managers, but also because Learning Management Systems provides
an archive of the training that has been carried out by their predecessors.

"We have the opportunity for people to come in and bring
themselves up to speed on things that would no longer be available with live
training," she says.

This learning infrastructure also underpins Kendle’s retention
and recruitment strategies.

"When we’re recruiting, we can say ‘we invest a
significant amount of money in your career’. For example, we have 300 courses
for professional development – such as project management and leadership
development – and they help prepare people for promotion within Kendle. From a
retention perspective, it’s the same thing. We’re a learning organisation, and
we’re in a position to support people’s careers."

Take-home points…

1 Always define the business impact when building
organisational developments

2 Corporate culture is critical

3 Invest in effective retention strategies

4 Co-ordinate learning in line with organisational goals

5 Link training to appraisal, competency and other HR systems

Go to www.personneltoday.com/features  to see the previous four parts of the
Delivering HR Strategy series

Comments are closed.