Building Capability: HR Strategic Partnering

Embedded in the business, the ability of strategic HR partners to rise above the transactional HR demands and become full partners with their business leaders in setting and implementing strategy makes or breaks an HR organization’s strategic contribution. This happens in two ways: first the direct contribution these HR professionals make to their business units in building capability that enables the business strategy (improving efficiency, fostering innovation, etc.). Second, the way in which they act as conduits to the more centralized HR functions about what works, what doesn’t work, and what is missing in terms of HR’s overall support of the business, ensuring that centralized HR groups are focused on solving business problems not generating solutions looking for a problem.

In our work with organizations around the world, we have seen significant strides made in implementing what is commonly called the business partner model, but we also see many ongoing challenges. In implementing or refining an embedded strategic HR role in any organization, it is critical to get three things right:

  1. An organizational design that will enable the role to have maximum impact.
  2. A selection process that recognizes and selects for the unique requirements of the role.
  3. A suite of development offerings that help HR professionals in these roles improve and hone critical skills.

First, getting the context right first will create greater impact.

If the embedded strategic HR role is not well defined and/or operates in an organization that is not well designed, even the most skillful and strategic HR professional with access to world-class development resources will not be able to have strategic impact.

HR, and all support organizations do two types of work: strategic work and foundational work. Strategic work is the HR work that directly supports key capabilities of the business—the ones that create competitive advantage externally. Foundational work is the HR work that must be done to keep the business running but work that does not directly drive competitive advantage work of the business; it includes but is broader than transactional work. Both are critical in any HR organization but they are performed differently—foundational work needs to be delivered as efficiently as possible while strategic work should be organized to deliver leverage and impact. Organizing the HR function so that foundational work is performed as efficiently as possible enables an embedded strategic role that can create leverage for business leaders.

Recognizing the importance of a strategic business partner role, many HR organizations have rushed to implement the role—often without careful attention to the business and HR systems in which the roles operate. The generalist role is too often a catch all that overlaps other roles and is defined by what the individual can do and needs of line leaders. They are told to be strategic but are inundated with other more transactional work that must be accomplished to meet regulatory and/or basic business functioning needs (employee relations, etc.).

In our experience, you cannot create an effective embedded strategic partner role in isolation. In order for an embedded HR role to do strategic work, other roles in HR need to change so there is a place for the transactional work to get done. There is also often a lack of clear accountability and process integration between HR groups (e.g., generalist versus COEs) that leads to confusion and time spent within the function negotiating roles and deliverables instead of adding value.

If your HR organization is not organized to enable a strategic embedded HR role to succeed, investing in developing business partnering skills in a population that will not be able to find time to use those skills is not a wise use of scarce resources.

Second, getting the right people in the business partner roles makes strategic contribution more likely.

Similarly, investing in developing professionals who are not a good fit for a strategic embedded HR role (capability and/or proclivity) is an uphill battle unlikely to yield any change in results.
Embedded strategic roles require skills that are very different from those that are required of foundational HR work. In that same rush to implement the business partner model, many HR organizations took people who were outstanding at their previous foundational work and transferred them to business partner roles. Some succeeded but others have struggled. Identifying a profile for an embedded strategic HR role and selecting to that profile using data that reflect both current performance as well as personality attributes known to enable success can increase the impact of the strategic embedded HR role.

Third, providing development options that are focused on helping business partners build the right skills is the most impactful development investment HR organizations can make.

In our experience working with and researching HR organizations around the world, those that get the most value from their strategic embedded HR roles have HR professionals in these roles with knowledge, skills, and abilities in key areas. The most successful organizations have developed HR professionals that understand and know how to use HR practices to create value for the organization’s stakeholders. They use change management, consulting, and coaching skills to help their organizations adapt and improve. They know and apply key principles of engaging talent to enable better performance and focus on data and metrics that matter. In short, they have developed HR professionals who are ready to have “a seat at the table” and use it to implement strategic vision.

The competencies and results required of HR continue to evolve and develop. Over time, the work of HR has changed from administrative work to more strategic work in creating value for the organization from the outside-in. For the last 25 years, The RBL Group has worked with the University of Michigan to conduct the HR Competency Study (HRCS) every five years to gather information from HR professionals all over the world to know what competencies are required to succeed as an HR professionals. Strategic embedded HR professionals must have an awareness of their own competence—strengths and weaknesses. As they understand, develop, and manage their strengths and weaknesses, they can better develop the most important skills that will enable them to deliver the required results.

Understanding how HR creates value provides the foundation for strategic contribution. Dave Ulrich, RBL co-founder and professor at the University of Michigan, has consistently posited that HR’s place at the table depends on its ability to create value for the organization. Embedded strategic HR professionals must have an outside-in value-creation mindset, understand the financial fundamentals that drive decision-making and be in touch with the business’ current performance. They must be able to translate the business’ strategic direction into a set of organizational capabilities required for successful implementation of the strategy and then prioritize, integrate, and measure HR practices in order to build the required capabilities. Development offerings that build financial and business acumen, understanding of how to identify, build, and measure strategic organizational capabilities in partnership with business leaders help embedded HR professionals play a strategic role.

To that foundation, additional skills and content areas are added. Arguably the most critical skill set for a strategic embedded role is basic consulting skills. In order to be able to contribute meaningfully, HR professionals must be able to diagnose the needs of the business, clarify expectations from key stakeholders, effectively gather information, propose specific changes, and facilitate implementation of the recommended changes. Development offerings that provide skill-building in these areas help strategic embedded HR professionals be more effective in identifying the ways they can have strategic impact and help the business succeed.

It follows naturally that a technical and practical understanding of change management principles is also essential for strategic embedded HR. Business leaders are charged with positioning their organizations to succeed for the long-term. The only way to succeed and continue to deliver value to the organization’s key stakeholders is to guide the organization in an evolution of services, markets, technologies, etc. that will enable continued and profitable growth. HR professionals that can help the business leader think strategically about the pace and progress of the required changes is a key strategic partner. Development offerings that provide both a comprehensive framework and practical tools help HR provide more strategic value.

As trusted advisors to their business leaders, embedded HR professionals are often called on to coach business leaders to improve performance. Whether as a natural outgrowth of their regular interactions with senior business leaders or as an organized intervention with individuals throughout the organization, strategic embedded HR professionals are often required to help improve performance. Development offerings that provide a coaching framework, tools for talking to leaders about contribution, and skill-building in communication skills can help HR professionals become more effective change agents in their organizations.

As the leadership team member who is the primary steward of people and organizational capital for the organization, strategic embedded HR professionals need to be able to help their business leaders engage and build talent in the organization. Understanding how to facilitate the attraction, engagement, development, and positioning of talent to meet strategic objectives and enable business performance are critical skills for those in strategic embedded HR roles. Development offerings that offer best practices and strategies for getting the most from talent at all levels in the organization help HR professionals ensure the business has the human capital it needs to deliver on today and tomorrow’s business strategies.

Finally, in a world of exponentially increasing sources of information and data, having the skills to analyze and measure HR and business performance is increasingly critical. Measuring is easy. Figuring out what to measure is hard. Strategic HR professionals must have the financial and business acumen to understand business performance, use that understanding to identify what to measure and then analyze the results to make adjustments that improve overall business performance.  Development that helps HR professionals find meaningful patterns in data and then use that information to make better decisions is critical as HR helps business leaders drive improved results.

Embedded strategic HR business partners are a critical way to drive HR’s strategic contribution to the business, but they are only as effective as the organization and the individuals allow. Ensuring an HR organization design that enables strategic contribution while delivering foundational HR services is one piece of the puzzle. Selecting for and developing strategic partnering skills for a segment of the embedded HR population is another. Organizations that can get these three pieces aligned—an organization structured to allow strategic contribution, individuals in strategic roles with strategic capability, and development options focused on skills and technical areas with the biggest strategic impact—are better able to offer strategic support to the business.