HR must push for change to drive human capital strategy

HR professionals must become the "missionaries of change" within
organisations to drive human capital strategy and elevate their own status
within the company.

That was the view of Dr David Norton, co-creator of the Balanced Scorecard
methodology, speaking exclusively to Personnel Today at the Human Capital
European Summit in Amsterdam.

He said that human capital management (HCM) – which he referred to as
"the black hole of strategy" – was a problem for organisations
everywhere with many struggling to implement proper measurement frameworks.

"The question for many organisations is how to align their intangible
assets – their people – with their business strategy and create value from
those assets," he said.

Norton cited the example of the Hilton group, which educates all new staff,
from baggage handlers to executives, on the organisation’s goals and business
aims, and the role individuals can play in the company’s success.

Hilton’s employees are then encouraged to develop their own scorecard and
performance metrics and are kept fully informed of progress by various methods
of internal communication.

"All these programmes fall under the remit of HR and can align your
business strategy," Norton said. "If your organisation is aligned,
then you can be successful. It is one of the most important criteria for

Norton said it was up to the HR community to introduce ‘strategy maps’ to
the organisation and take on the role of strategy ‘champion’.

"HR seems to have an inferiority complex because it doesn’t have a seat
at the management table," he said. "It is down to HR professionals
everywhere to build their own seat at that table and become a strategic

The summit was attended by more than 100 European HR professionals, who
heard presentations and case studies on realising the value of their human
capital, and how strategic HCM can lead to organisational success.

By Mike Berry

Comments from the summit

Andrew Mayo
Professor of HCM, Middlesex University

It is people who maintain and grow value for stakeholders.
People ‘loan’ to organisations their human capital in return for the added
value given to them. The role of HR is to keep this equation in balance for all
the people the organisation wants to keep.

There is a real need to turn the statement ‘people are our most
valuable assets’ into reality. We don’t need to play the accountants’ game, but
remember that numbers speak louder than words.

Simon Sprowell
People director, Living Well health clubs

We spend more time talking to our people than anything else. We
have worked hard at putting definition behind our brand with both staff and
managers. It is more than just words. We believe people have to live it, feel
it, believe it – that’s what drives our results. Delivery is the role of all
our team members.

If we took this kind of employee engagement away, we would be a
different kind of business, providing a different kind of service. People are
recruited on how they will fit into the culture of the company – that’s how
much we believe in our values.

My advice to HR is: make the link from vision to action; bring
it all together and deliver results; have open communication and listen to
people; applaud and reward staff; and genuinely recruit on attitude and drive

Mike Watts
HR director, Scottish Widows

The business results you get tomorrow are being driven by the
desire and ability of your people today. Quality of execution is a real
differentiator – those who can execute change plans quickly and effectively
will be best placed.

From our point of view, an HR function strategy map was a good
way of implementing alignment in the organisation. It builds the case for
investment into the people agenda, puts HR firmly in the spotlight and
highlights its strategic importance.

Neil Roden
Group HR director, Royal Bank of Scotland (RBS)

RBS spends billions on its people every year, and there is a
commitment from the top for human capital management (HCM) – it is on the
business agenda.

Our goal is to build a compelling employee proposition that
attracts, engages and retains the best talent. Alongside that, our priority is
to measure the effectiveness of our people strategy and its impact on business

HCM will not go away – the way we manage our people affects
their performance and that of the organisation. Companies that understand and
clearly demonstrate the links between their people approach and organisational
performance will have a competitive advantage.

HR needs to make it happen. It should be a selling point to the
board as there will be a HCM reporting requirement within the reformed
companies legislation next year.

Managing strategy and human capital

– 95 per cent of a typical workforce do not understand their
organisation’s business strategy

– 90 per cent of organisations fail to execute their strategies

– 86 per cent of executive teams spend less than one hour per
month discussing the business strategy

– 80 per cent of HR departments do not link human capital
investments with the business strategy

– 66 per cent of HR executives are not viewed as strategic
partners by their executive teams

Source: Balanced Scorecard Collaborative

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