PIHRA Scope - Fall 2008 - (Page 10) FEATURE is an ongoing debate about the role of human resources in strategic planning. In some cases, senior managers view human resource management solely as a compliance function. Other senior managers look to the HR function for more consultative services such as leadership development, performance management and employee engagement. Often times HR is called to help implement a key initiative of strategy after the decision has already been made. Meanwhile, HR professionals are looking for the proverbial “seat at the table” in the strategic planning process. Some will tell you that the role of human resources in the strategy process is to focus on workforce planning and succession planning. While these functions are important to the successful implementation of strategic plans, there are also opportunities for HR professionals to be involved in the development of strategic plans. The fact is that strategy is rarely developed without the consideration of human capital. Perhaps more importantly, no strategic plan is successful without the successful recruitment, deployment, development and management of human capital. So then, why wouldn’t the HR professional be “at the table”? I submit to you the answer is that the HR function must create a perception of value throughout the planning cycle by demonstrating its knowledge, alignment, and success. In other words, the HR function must successfully prove its ability to create value to the organization at every step in the strategic planning process from environmental scanning, to organizational assessment, to 10 PIHRAScope Fall 2008 There HR Professionals Look for a ‘Seat at the Table’ strategy development, implementation, and performance measurement. There are four guiding principles that will lead the HR professional to be invited to “the table” and more importantly that will ensure that his/her seat stays “reserved.” • Understand the strategy development and strategic planning process • Know your business • Run HR like a business • Take a position on a strategic issue Let’s explore each of these. UNDERSTAND THE STRATEGY DEVELOPMENT AND STRATEGIC PLANNING PROCESS In order to actively participate in the strategic planning process, it is important to have a solid understanding of the process. Strategic planning is the process of evaluating an organization’s operating environment, customers, competition, as well as its capabilities and competencies to define a strategy and then to make decisions on the allocation of resources (including its capital and people) to pursue the strategy. A good strategic planning process is iterative, incorporating internal and external information, various functional expertise, and cross-divisional management personnel throughout the year. Further, it aligns the entire organization with measurable metrics which are tracked and evaluated on a regular basis. It is important to establish an understanding of your organization’s strategic planning process and the decision-making process associated with it. Strategic decisions will be made based on return on investment (ROI), economic profit or shareholder value creation, revenue growth, market share growth, margin, reputation or other factors. Once you understand the planning process and the decision-making criteria for your organization, you can begin to make inroads into the process. For example, Company A is a 15-year-old, privately held $30 million company, © Orla. Image from BigStockPhoto.com PIHRA Conference Speaker Role of HR 2008 in Strategic Planning The By Alan Frelix The Frelix Group
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