HR Focus: Strategic Leadership Harris Consulting Keith Sinclair President & CEO

HR Focus: Strategic LeadershipHR Focus: Strategic Leadership

Harris ConsultingHarris Consulting

Keith SinclairPresident & CEO

• HR as a Strategic Player – Retrospect

• New Challenges, New Role

• Strategic Thinking

• Critical HR Leadership Competencies

• The Way Forward

AgendaAgenda

• 1900-1980’s – from administrator to behaviouralist

• 1980-2000’s – “at the table” …with mixed results

• 2000-2010 – outsourcing and downsizing…

• 2010-2025 – strategic leader (or more do-more-with-less?)

HR: An Historical PerspectiveHR: An Historical Perspective

Notwithstanding the argument that HR deserves to be at the executive table:

• Less than 2% of top B-school grads specialize in HR

• We are perennially the lowest paid role in the C-suite

• Too many of us still report to finance…

Have We Really Stalled?Have We Really Stalled?

Kenexa White Paper:

“While most HR functions would suggest that they are enacting change, the key is whether the benefits are being delivered and …make a difference in the organization’s eyes.

HR needs to revamp everything it does. It doesn’t just need a facelift, the whole process needs a drastic overhaul.”

Have we Really Stalled?Have we Really Stalled?

M. D. Breitfelder, Harvard MBA, in HBR 2008:

“HR today sits smack-dab in the middle of the most compelling battle in business, where companies deploy and fight over the most valuable resources – workforce talent.

Talent management is now a make-or-break corporate competency, and HR has become – once and for all – a truly strategic function.”

What’s the Opportunity?What’s the Opportunity?

Value is in the eye of the receiver:

“Influence with impact occurs when human resource professionals start with the beliefs and goals of the receivers.”

David Ulrich & Wayne Brockbank, The HR Value Proposition

What is the Disconnect?What is the Disconnect?

The Evolving Focus of Strategy** Source: CA Bartlett, S Ghoshal - Building Competitive Advantage Through People, MIT Sloan


COMPETING COMPETING FOR:FOR:

MARKETS/MARKETS/PRODUCT SPRODUCT S

RESOURCES/RESOURCES/COMPETENCIES COMPETENCIES

TALENT/TALENT/DREAM SDREAM S

STRATEGIC STRATEGIC OBJECTIVEOBJECTIVE

Defensible product-market positions

Sustainable competi-tive advantage

Continuous self-renewal

MAJOR MAJOR TOOLSTOOLS

• Industry/competitor analysis• Market segmentation/ positioning•Strategic planning

• Core competencies• Resource-based strategy• Network organization

• Vision and values• Flexibility and innovation• Front-line innovation

STRATEGIC STRATEGIC RESOURCERESOURCE

Financial capital Organizational capacity

Human and intellectual capital

Management of Management of Firm Firm

InfrastructureInfrastructure

Management ofManagement ofEmployee Employee

ContributionContribution

Management ofManagement ofTransformationTransformation

and Changeand Change

Management ofManagement ofStrategicStrategic

Human ResourcesHuman Resources

*David Ulrich, “Human Resource Champions”

FUTURE/STRATEGIC FOCUS

DAY-TO-DAY OPERATIONAL FOCUS

PR

OC

ES

SE

S PE

OP

LE

HR Roles*HR Roles*

Knowing External

Business Realities

Building HR Resources

Serving External and Internal

Stakeholders

Ensuring HR

Professionalism

Crafting HR Practices

HR Value Proposition

Source: The HR Value Proposition, Dave Ulrich and Wayne Brockbank

HR Value PropositionHR Value Proposition

1. HR work doesn’t begin with HR – it begins with business!

2. The ultimate receivers of business reside in the marketplace

3. HR contributions are a source of competitive advantage

4. HR must align practices with internal and external stakeholder needs

5. HR professionals must acquire the capabilities necessary to provide stakeholder value

6. HR must offer a unique and powerful perspective that adds real organizational value

HR Value Proposition Premise– Ulrich & Brockbank

HR Value Proposition Premise– Ulrich & Brockbank

The HR Executive RoleThe HR Executive Role

“Even in the best of companies, a so called top team seldom functions as a real team.” Jon R. Katzenbach

• Remember, executives are not “teams” – they are boss-led work groups

• Executive roles require executive leaders

• Teamwork is secondary to alignment

The HR Leader’s RoleThe HR Leader’s Role

“The Plight of the Navigator*…” *John O. Burdett, Orxestra

• 6 key executive roles: Visionary, Explorer, Pioneer, Warrior, Maverick & Navigator

• Navigator role defined: Know the destination Understand business, markets, people & processes Map out an optimal course Orient enterprise towards its intended destination Key Skills: mastery of leadership and human dynamics

HR Leader as NavigatorHR Leader as Navigator

• Mastery of human dynamics

• Change management skills

• Strategic vision

• A shift from value appropriation to value creation!

Transformational LeadershipTransformational Leadership

• Shift from deciding strategic content to framing strategic context

• Create a sense of purpose for group & individual efforts

• Foster a fertile environment:

• Articulate organizational values

• Define and establish community

• Develop relevant organizational processes

• Inspire empowerment, ownership and commitment

Rethinking the Top HR RoleRethinking the Top HR Role

• Know the business as well as everyone

Credentials include line roles/other functions

• Think and act strategically

• Earn exceptional credibility via your actions

• Understand and practice power through influence

Establishing the HR MandateEstablishing the HR Mandate

• Cultivate strong networks and relationships

• Deliver competitive advantage through the integrated application of people and process

• Distinguish yourself via mastery and advancement of leadership

• Grow organizational capacity by acquiring, retaining, motivating and developing talent

Establishing the HR MandateEstablishing the HR Mandate

• Know thyself!

• Excel at critical tasks – professional and business

• Learn continuously – take risks – be a sponge

• Develop your own perspective:

• Be a critical thinker

• Have the courage of your convictions

• Refuse to choose between profits and people!

Start with YourselfStart with Yourself

• Courage is rarely a matter of “grand heroic acts”

• It is determined by “defining moments” where we stand for our values or principles when it may be more expedient to do otherwise

• Effective leaders know that acts of courage may end in failure…

Leadership CourageLeadership Courage

WisdomWisdom

“Wisdom comes from experience, and experience is acquired through failure.”

Confucius

• Strong leaders have the courage to fail and encourage others to learn the same way!

• Effective leaders cultivate other leaders

Courage and Wisdom… Courage and Wisdom…

• Be willing to move beyond your comfort zone

• Practice humble and honest self-reflection

• Vigorously solicit others’ opinions

• Challenge assumptions

• Listen and observe carefully and completely

• Always be open to new and different ideas

Leadership & Lifelong Learning Leadership & Lifelong Learning

Strategic ThinkingStrategic Thinking

• Is a dynamic process

• Is an integrated and dynamic way of viewing the world

• Is guided by a framework

• Enables taking advantage of opportunities as they arise!


• For Operational Planning you ask “HOW”

• For Strategic Planning you ask “WHAT”

• For Strategic Thinking you ask “WHY”


Strategic FocusStrategic Focus

OPERATIONALOPERATIONAL STRATEGICSTRATEGIC

Focus on current/near term Focus on future

Confirmation and refinement of ideas

Idea generation

Reach for closure/goal achievement

Open new discussions

Attaining/protecting market share Expanding/new markets

Reach a decision Keep learning, exploring, creating

Strategic Planning v ThinkingStrategic Planning v Thinking

STRATEGIC PLANNINGSTRATEGIC PLANNING STRATEGIC THINKINGSTRATEGIC THINKING

VISION OF THE FUTUREVISION OF THE FUTURE Predictable, specified assumptions

Only shape can be predicated

IMPLEMENTATIONIMPLEMENTATION Distinct allocated processes Interactive, dynamic processes

MANAGERIAL ROLEMANAGERIAL ROLE Senior managers drive and own the process

Strategic involvement is shared and distributed

CONTROLCONTROL Through measurement and monitoring systems

Self-reference – guides daily thoughts, actions

STRATEGY CREATIONSTRATEGY CREATION Primarily an analytic, rational decision process

Holistic approach –generation of options

Scanning the LandscapeScanning the Landscape

Pro

fit

Time

Horizon 1Defend and extend current businesses

Horizon 2Drive growth inemerging/newbusinesses

Horizon 3Seed options for future growthbusinesses

Strategic HorizonsStrategic Horizons

Source: Robust Adaptive Strategies, Eric D Beinhocker, Sloan Management Review, Spring 1999

Apply a parallel set of strategies to ensure ongoing success:

• Innovation requires experimentation, but experimenting involves risk

• What works/fits today will become obsolete

• Parallelism breeds innovation without “betting the farm”

ConsiderationsConsiderations

Source: Robust Adaptive Strategies, Eric D Beinhocker, Sloan Management Review, Spring 1999

Short jumps only Long jumps only Mix short and long jumps

Business strategy requires a mix of short and long term jumps (i.e. balances short, medium and long term priorities)

Navigating Varied TerrainNavigating Varied Terrain

You often hear “Be bold. Take a leap!” Sometimes you should. Other times, there’s a better idea. “Take a step.”

Harry Beckwith

Blue Ocean Strategy: Create Your Own Market SpaceBlue Ocean Strategy: Create Your Own Market Space

• A Blue Ocean Strategy is a “value innovation” strategy where:

• Efforts provide a favorable cost structure while delivering high customer value

Overview of BOSOverview of BOS

Costs

Buyer Value

ValueInnovation

The Simultaneous Pursuit of Differentiation & Low Cost

Value InnovationValue Innovation

Blue Ocean

RED OCEAN STRATEGYRED OCEAN STRATEGY BLUE OCEAN STRATEGYBLUE OCEAN STRATEGY

Compete in existing market space

Create uncontested market space

Beat the competition Make the competition irrelevant

Exploit existing demand Create and capture new demand

Make the value-cost trade-off

Break the value-cost trade-off

Red versus Blue OceanRed versus Blue Ocean

High

Low

Premium Wines

Budget Wines

Price

Enological Terminology

Above-lineMarketing

Aging Quality

Vineyard Prestige

Wine Complexity

WineRange

EasyDrinking

Fun & Adventure

Ease of Selection

yellow tail

Strategy Canvas (yellow tail)Strategy Canvas (yellow tail)

US Wine Industry – Late ‘90’s US Wine Industry – Late ‘90’s

Cognitive Hurdle

Resource Hurdle

Motivational Hurdle

Political Hurdle

Four Organizational Hurdles Four Organizational Hurdles

Theory of organization change rests on transforming the mass:• So change efforts are usually focused on moving the mass

Conversely, by identifying bright spots or tipping points:• One can achieve a strategic shift fast at low cost

Conventional versus “Tipping Point” Transformation Conventional versus “Tipping Point” Transformation

“What gets measured, gets done!”

Jack Welch, GE

People do what they’re rewarded for doing…

The Impact of MetricsThe Impact of Metrics

To have impact and credibility with boards and executives:

• HR leaders and professionals must be effective at measuring, monitoring and managing performance

Applying a Balanced Scorecard enables the effective integration of:

• Qualitative with quantitative measures

• “Soft and hard” elements

Balanced ScorecardBalanced Scorecard

People PerspectivePeople Perspective

Vision, Vision, Mission, Values & Mission, Values & Strategic DriversStrategic Drivers

Financial PerspectiveFinancial PerspectiveSystems & ProcessesSystems & ProcessesPerspectivePerspective

Customer PerspectiveCustomer Perspective

Balanced ScorecardBalanced Scorecard

• Measures must:

• Reinforce the vision, values and strategy

• Drive the right behaviours – “how you play the game”

• Measure results, not just projects/activities

• Be SMART

Performance MeasuresPerformance Measures

SMART defined:

• Specific

• Measurable

• Achievable

• Relevant

• Time-based

Performance MeasuresPerformance Measures

Horizon: Short, Medium, Long Term

Str

ate

gie

s PerspectivesPerspectives• CustomerCustomer• FinancialFinancial• ProcessProcess• PeoplePeople

Busine

ss U

nits/D

ivisio

nsInternal/ExternalDynamics

Internal/ExternalDynamics

Balancing Performance MeasuresBalancing Performance Measures

• Inspiration without implementation is merely provocation

• Implementation without inspiration is simply administration

• Effective leadership requires both!

Applying Strategic ThinkingApplying Strategic Thinking

With access to capital, people and organizational capacity become the critical limiting factors to economic success

Let’s review an earlier slide and discuss how HR can lead the way

HR’s Role in Leading StrategyHR’s Role in Leading Strategy



COMPETING COMPETING FOR:FOR:

MARKETS/MARKETS/PRODUCT SPRODUCT S

RESOURCES/RESOURCES/COMPETENCIES COMPETENCIES

TALENT/TALENT/DREAM SDREAM S

STRATEGIC STRATEGIC OBJECTIVEOBJECTIVE

Defensible product-market positions

Sustainable competi-tive advantage

Continuous self-renewal

MAJOR MAJOR TOOLSTOOLS

• Industry/competitor analysis• Market segmentation/ positioning•Strategic planning

• Core competencies• Resource-based strategy• Network organization

• Vision and values• Flexibility and innovation• Front-line innovation

STRATEGIC STRATEGIC RESOURCERESOURCE

Financial capital Organizational capacity

Human and intellectual capital

HR Processes that Add Value:

1. Flow of people

2. Flow of performance management

3. Flow of information

4. Flow of work

HR Value Proposition*HR Value Proposition**Dave Ulrich and Wayne Brockbank

HRVP* Competency ModelHRVP* Competency Model

Business Business KnowledgeKnowledgeBusiness Business

KnowledgeKnowledge

Strategic Strategic ContributionContribution

Strategic Strategic ContributionContribution

Personal Personal CredibilityCredibilityPersonal Personal

CredibilityCredibilityHR HR

DeliveryDeliveryHR HR

DeliveryDelivery

HRHRTechnologyTechnology

HRHRTechnologyTechnology

Source: The HR Value Proposition, Dave Ulrich and Wayne Brockbank

Architecture for delivering the HRVP:

• Keep your promises

• Imagine the future while investing in the present

• Put your money where your strategy is

• Build value through organization and people

• Add customer value

HR Value Proposition*HR Value Proposition**Dave Ulrich and Wayne Brockbank

• Develop customer literacy

• Think and act like a customer

• Track the firm’s share of targeted customers

• Align practices to the customer value proposition

• Engage customers in HR practices

Customer FocusCustomer Focus

• Organization is not structure – it is capability and capacity

• HR is carried out by line managers, not HR

• HR is based on a deep body of knowledge, not just common sense

• HR is an integrated set of outcomes, not a collection of activities

• HR is an ongoing process, not an isolated event

Resolve MisconceptionsResolve Misconceptions

“External realities and stakeholder interests determine why HR matters to an organization and why HR needs to focus on what it delivers more than on what it does”

D. Ulrich & W. Brockbank

HRVP* ImplicationsHRVP* Implications

The Way Forward…The Way Forward…

“We have a deep-seated desire to quantify the world around us so we can understand it and control it.

But the world isn’t behaving.

We must…consider the possibility that if we can’t measure something, it might be the very most important aspect of the problem.”

Roger Martin, Dean, Rotman School of Business (Blog post)

Making the Case…Making the Case…

HR leaders are uniquely positioned to lead and develop critical soft skills that define organizational performance

It’s time to act!

“Soft” versus “Hard” Skills“Soft” versus “Hard” Skills

CAs and CMAs are staking their claims to the appreciation and leadership of human and intellectual talent

Are we already too late?

“Soft” versus “Hard” Skills“Soft” versus “Hard” Skills

High Commitment and High Performance Leaders:

1. Earn trust through openness to the unvarnished truth

2. Actively engage people – business is personal

3. Motivate others via a focused agenda and a shared common purpose

4. Are collaborative rather than “lone-rangers”

“It’s not about me, but about all of us”

A Leadership Model for HR from:

“The Uncompromising Leader”, Eisenstadt, Beer, Foote, Fredberg, Norrgren

A Leadership Model for HR from:

“The Uncompromising Leader”, Eisenstadt, Beer, Foote, Fredberg, Norrgren

• Why haven’t we outgrown our hierarchical management system?

• If we believe in democracy, why aren’t businesses democratic?

• How adaptive are our organizations?

• Why do emerging companies have to adhere to old models?

• If viruses are effective at adapting:

• What if we organized and ran our companies that way?

Leadership FutureLeadership Future

How well are we harnessing technology to run our businesses?

Do management control structures slow down its potential impacts?

Leadership Future & TechnologyLeadership Future & Technology

Technology has the capacity to make decision-making peer-based and collaboration universal.

What kind of leadership and organizational networks/ structures do we NEED going forward?

Leadership Future & TechnologyLeadership Future & Technology

• Developing social networks is vital to the capture and transfer of organizational knowledge

• SN can drive innovation, “instant” responsiveness and flexibility

• Managing social networking requires understanding of organizational dynamics, process management, and trust-based culture

• It requires leadership from skilled HR professionals with a strong business acumen

• Technology is only the pipeline…

HR Future: Social NetworkingHR Future: Social Networking

While knowledge management is supported via a technical infrastructure, it is operated via a social network.

Who’s going to drive social networking:

• IT

• Regulators

• HR?

HR Future: Social NetworkingHR Future: Social Networking

For HR to earn its rightful place at the executive table, we must master the skills and capacity to:

• Think strategically

• Mobilize workforces

• Develop leaders

• Set direction

• Run businesses


In the immortal words of Jean-Luc Picard, SS Enterprise…


“Make it so!”


Discussion / Q&ADiscussion / Q&A

Thank you/Merci!Thank you/Merci!

Harris ConsultingHarris ConsultingKeith Sinclair

Documents

HR Focus: Strategic Leadership Harris Consulting Keith Sinclair President & CEO