To what extent should HR define the corporate strategic agenda?

A competition run by BPP and Personnel Today, asked contestants to write an article on one of two HR topics. The winner was Carmel Quinn with her article about how HR can define the corporate strategic agenda.

Personnel Today is pleased to publish the winning article here:

The level of involvement HR should have in defining corporate strategy is often dependent upon many factors such as organisational size, structure and purpose.

The board’s objectives are primarily to create financial stability, return of capital and to identify potential risks to the business, so there is a tendency for board members to see the HR function as just a hands-on daily operational role.

HR professionals need to be proactive and have insight into the future goals of the company if they want to become a strategic partner.

Without an understanding of company finances and the restraints faced by the business, HR will be unable to communicate effectively at board level and find it difficult to be welcomed into the fold.

It takes an all-round HR strategist to be effective in communicating and influencing at board level.

However, HR can offer a pivotal role in advising and supporting the board and helping achieve company goals through the development and understanding of the workforce.

Howard Schultz, chairman of Starbucks, says its company mission statement is about treating people with respect and dignity. You can’t expect your employees to exceed the expectations of your customers if you don’t exceed the employees’ expectations of management.

With this in mind, shouldn’t HR have a major influence in strategic agendas so they can help bridge the gap between the board, its mission and the reality of the current resourcing situation?

Redefining board strategy from an HR perspective will ensure a competitive advantage to the business and its future growth.

At Google, 300 people are specifically employed to focus on hiring the best candidates. The candidates have a minimum of four interviews each requiring a unanimous vote and the final decision to hire is made by both the HR director and co-founder Larry Page.

It is apparent that Google is committed to ensuring that HR sits at the highest level in the company, helping to define corporate strategy.

During the financial crisis large payouts were given to the banks’ departing CEO’s. Perhaps the banks would have had a different approach if HR executives had been advisors to the board alongside the financial management.

Despite creating the demise of Britain’s second largest bank and a loss of more than 20,000 jobs, Sir Fred Goodwin was offered a payout of £16.4 million and a performance-related bonus. His annual pension is more than the average worker would dream of earning in a life-time.

This conflicts with the idea from the well-respected business management consultant Peter Drucker that a top paid executive should make no more than 20 times the salary of the rank and file within an organisation.

We need to look to the future, accept our corporate responsibility and ensure that, as HR people, we have an impact and say in the strategic future of the organisations to which we belong.

HR leadership should be working in conjunction with board members to look at Generation X and engage them as the leaders of the future, whilst ensuring that their development fits into the corporate plan.

If we want HR recognition at board level then we need a clear and strong HR leadership with a broad knowledge of all the key areas within the business.

This will enable communication and an understanding of the financial restraints that organisations face in today’s economic climate.

If all disciplines are involved at board level there is a higher probability that an organisation will achieve a successful outcome in its corporate strategic agenda.

After all, haven’t the board members been appointed using one HR discipline or another? Perhaps its time to appraise the members of the board and look to re-shaping the future.

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