PIHRA Scope - Fall 2008 - (Page 11) recently acquired by a private equity firm which also hired a new CEO charged with developing and implementing a strategy to double the size of the company in five years with an expectation that the company will either go public or sell to a larger competitor. The new CEO launches a strategic planning process, starting with interviews of all business unit and department heads to identify opportunities for growth. You, as head of HR, are on the list of interviewees. How do you prepare yourself to ensure that you will continue to be involved in the planning process? First, assess what you know about the planning process. You know that the information-gathering phase will include an internal assessment, leveraging interviews to gather the information. You also know that part of the organization’s mission/vision is to double in size within a five-year period. The strategic issue discussion and resolution phase will likely be guided by growth initiatives. Thus, your interview with the new CEO should be focused on ways that HR can positively influence the rapid growth of the company. You will likely want to discuss topics such as talent acquisition, leadership development, and possibly even integration support should the company decide to grow by acquisition. You might also want to provide the CEO with information about the change readiness of the organization as well as information about the competencies of the organization from a performance management perspective. Your ability to align your conversation with the process and decision-making criteria will at least get you on the “long list” of invitations to the “table.” KNOW YOUR BUSINESS Knowing your business will get you on the “short list” of invitations to a seat at the table of strategic planning. Unfortunately, this is where a lot of functional leaders miss their opportunity. Many are too focused on being experts in their field that they under-invest in developing expertise in their business. In order to really understand your business you must know how the money flows as well as what are the levers that drive growth and profitability. It is important that you understand these levers and know how your organization and function can/does influence them. For example, a commissioned sales force is often thought of as variable costs. The reality is that an infrastructure is needed to acquire, train, manage, develop and retain talent. There is a fixed-cost component to every commissioned salesperson. You should be able to articulate the fixed-costs ratio for hires for every new hire when having conversations with the C-suite. It is also important that you know what’s happening in the marketplace in which you compete. Establish methods to stay abreast of environmental trends, customer trends, competitive trends, and innovation that might be on the horizon. One of the best ways to accomplish this is to regularly spend time with operators and functional experts who have a finger on the pulse of the business. This will serve the dual purpose of developing trusting relationships with your internal customers. It is equally important that you understand the jargon of business and, perhaps more importantly, the jargon of your business. The vernacular of business is ever-changing. C-level individuals continuously read and learn new concepts and new methodologies designed to enable them with tools to maneuver the treacherous waters of business. It is important that you stay abreast of these concepts as well. Whether you read books and/or business briefings, subscribe to Harvard Business Review, or attend strategy conferences, be sure to exploit learning opportunities outside of your field of expertise. You will know you have reached a level of proficiency when you can effectively translate HR jargon to business jargon. RUN HR LIKE A BUSINESS Human resource management is a function of business. The function exists to manage the human capital of a business, thus, it is imperative that the goals of the function be in alignment with goals of the business. In order to accomplish this you must start by knowing your internal and external customers. What are the demands of the business units and corporate center that you serve? How will those demands shift over time? How do their demands impact their ability to deliver results to their clients? The answers to these questions and questions like them will enable you to craft a strategy to deliver solutions to your customers, thereby creating a perception of value that can be levered. Secondly, it is important that you know your competition. This is sometimes a difficult concept for internal service functions; however, remember that Strategic Planning Process Information Gathering • External Analysis (Customers, Competition Trends) • Internal Analysis (Competencies & Gaps) Execute, Measure & Monitor • Balanced Scorecard • Performance Management Developement/Refinementof Vision Mission and Guiding Principles • What Business Are We In? • What do we plan to accomplish • How will we measure success or failure? Allocation of Resources (Capital) • Financial • Human • Intellectual Strategic Issue Discussion & Resolution • What opportunities and threats are present or on the horizon? • What are the highest priority issues? • How should we address/resolve these issues? Plan Development • Objective & Goals • Initiatives and Action Steps STRATEGIC PLANNING continued on page 13 Fall 2008 PIHRAScope 11
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