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For the last decade or so, out-sourcing the HR function has looked to be ‘the wave of the future’. It was believed that, by employing specialised suppli-

ers, and by freeing up HR to spend more time on strategic work and on putting together customised ben-efits, outsourcing would generate certain efficiencies. Unfortunately, though, the focus moved quickly to cost reduction, and the savings that resulted were applied to the bottom line, rather than to fostering innovation. The net result is that HR today finds itself in an unenvi-able position. In fact, should it con-tinue not to innovate, should it fail to compete – such as by delivering high quality shared services – and should it find no new, tangible ways to distinguish the ‘Employer Brand’, the HR function may well become irrelevant.

Many within the profession have begun to lament a certain lack of respect and recognition for the services they provide. This has cre-ated a strong and growing need to bring a paradigm shift to HR’s role, and most practitioners now realise that their traditional roles must un-dergo a major overhaul. What they are now wrestling with is not only how to qualitatively improve their own service delivery, but also how to focus on their relationships with both internal and external custom-ers. Ideally, HR should be working to take well-thought-out steps to becoming a true ‘strategic business partner’.

will occur, and how the relationship with the CEO will develop.

At heart, strategic business part-nership is about providing human capital and organisational-change perspectives that are embedded within business leadership teams. This demands business credibility, the ability to work in partnership, and deep functional knowledge on HR and organisational development issues. The ideal outcome is for HR systems and the necessary change strategies to become an integral part of the business leadership’s decision-making process. The scope for partnership might cover every-thing from what is HR’s ‘traditional’ strategic work, to new types of stra-tegic thinking and organisational design, cultural change, and HR alignment and change management. The specific context, characteristics and demands, though, will vary by organisation or sector.

…and the four broad skills it demands

The skills needed for a strategic business partnership role necessar-ily resolve around both strategy and business partnering. Broadly, the demands four types of skills: • Strategic HR• Organisational development• Partnership with various stake-

holders• A good understanding of the

business

Strategic Human Resources This includes a mix of ‘core’ or-

Why HR today finds itself in an unenviable position? Kashinath Chaturvedi gives his version

Business PartnerHR as Strategic

Many within the profession have begun to lament a certain lack of respect and recognition for the services they provide. This has created a strong and growing need to bring a paradigm shift to HR’s role…

Defining Strategic Business Partnership…

In making this paradigm shift, the first challenge for HR leaders is to understand exactly what it means for them and their teams. What complicates matters is that no com-mon, agreed-upon definition for the term ‘strategic business partnership’ exists. What it would involve, how-ever, is a combination of skills and knowledge in the areas of human resources, organisational develop-ment, and business strategy – but all viewed in the context of a genu-ine partnership with the business. Once the term has been defined and agreed upon, a competency profile needs to be drawn in sync with it. It is also important to understand how the transition to the new role

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turing such talent. Finally, strategic HR includes the use of technology to reduce costs and streamline pro-cesses, ensure workplace diversity, and support employee engagement.

Organisational Development

This is a body of knowledge and practices that enhances organisa-tional performance and individual development by ensuring align-ment among various areas within the overall system. Organisational interventions are inclusive method-ologies and approaches to strategic planning, organisational design, leadership development, change management, performance man-agement, coaching, diversity, team building and work-life balance. It also deals with the capabilities needed to create an environment that allows employees to operate at their fullest potential. From a specif-ic knowledge and skills perspective,

ganisational development strategies and skills, the ability to see the ‘big picture,’ and to think systemically and strategically as to where and how best to foster change within the organisation. A variety of meth-ods can be deployed: teaming up with consultants and senior staff in leading a change project; putting employee engagement to practical use, by involving people fully in the organisation’s most important work; and making more effective use of cross-cultural and virtual working situations. Strategic HR also includes designing and imple-menting a ‘total rewards’ compensa-tion system that supports and even drives the behaviours that will meet the needs of HR’s internal custom-ers. The packages thus developed should positively impact the work-place, the workforce, and the firm’s HR strategy, which in turn must be linked strongly with the overall

At heart, strategic business partnership is about providing human capital and organisational-change perspectives that are embedded within business leadership teams.

organisational strategy. The other key element is talent management. This is really the art of putting the right people with the right skills in the right job and at the right place, with a focus on retaining and nur-

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thInk TANkit requires a deep understanding of system-wide change, organisational design, strategy development, lead-ership development, team develop-ment, coaching and mentoring. The overarching aim is to use applied behavioural sciences to improve the effectiveness of human system dynamics. Organisational structures drive behaviour, and a well-func-tioning structure fosters functional expertise.

Partnership The general definition of part-

nership is, ‘To bring experience and knowledge from a multitude of sources to achieve a better out-come.’ Developing a partnership with various stakeholders involves HR pooling its skills with other stakeholders to achieve optimal and sustainable results for the organ-isation. The partnership involves working closely with senior busi-ness leaders to develop a people agenda – including HR practices and services – that support the overall aims of the organisation and its busi-ness model, and which meets the demands of employees. Such part-nerships are becoming increasingly popular as organisations become more ‘people oriented’, and as they start to see the value of aligning the HR agenda with the broader or-ganisational agenda. It involves HR business partners connecting with other departments, and developing a trusting long-term relationship with their colleagues in HR, as well as with other stakeholders – most importantly the CEO. HR must necessarily support the CEO while he or she executes organisational strategy and drives its overall per-formance. The non-achievement of targets must be highlighted with the concerned divisions through proper communications – which should be in alignment with that coming from the CEO’s office. HR also needs to help ensure that all employees are mindful of the organisation’s values and governance requirements, and that they behave with integrity.

It must also build public trust by championing the cause of transpar-ency and good governance.

Understanding the Business This is an essential pre-requisite

of strategic business partnering. In this capacity, HR needs to build a relationship of trust with business leaders, by knowing enough about the business and its key stakeholders to be able to fully engage in business discussions, offer innovative and integrated HR solutions to business problems, and audit and find ways to improve the company’s talent, culture and leadership. Strategic business partners needs to know how the business makes money, and where it spends it. Such an understanding is what allows HR to contribute more substantially to the bottom line. More gener-ally, HR professionals must have deep knowledge of the company’s products, its customers, its culture, its mission, its vision and its values. They must also understand the social, technological, economic, political, environmental and demo-graphic trends facing the sector in which organisation operate. They must earn the trust of the business by delivering exactly or more than what they promise. HR must build internal

human-resource responses that align with external requirements. Further, it must be a strong propo-nent of technology, which not only plays an increasingly important role in communication, but which can also help more efficiently deliver on administrative tasks like benefits, payroll processing, health benefit costs, and so on.

In sum…It is now well understood that

HR needs to carve a niche for itself by becoming a strategic business partner. This new role requires HR to develop strategies that are in sync with the broader organisa-tional strategy, and which are more smartly executed. It also requires HR to effectively manage what talent is available within the organisation, and to ensure that it is used opti-mally. Talent has to be effectively nurtured and retained through the use of effective HR policies, and which includes insuring that pay structures are appropriate and market-linked.

Developing a genuine partner-ship with various stakeholders can allow a pooling of resources that helps achieve sustainable and opti-mum results for the organisation. Of the many stakeholder relationships, the most important one is with the CEO, and HR must support the CEO in implementing organisation-wide strategy. Finally, it is crucial for HR in its strategic business partnership role to innovate on whatever service or role it is required to perform. Sustainable innovation is the key to continually improving one’s performance and keeping pace with global changes in HR policies and procedures. Ultimately, this is what will help HR become a true strategic business partner.

Strategic HR also includes designing and implementing a ‘total rewards’ compensation system that supports and even drives the behaviours that will meet the needs of HR’s internal customers.

Kashinath Chaturvedi is a retired Managing Director of an international bank located in Central Africa. He is currently a

Corporate Trainer.

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