The Future of HR – Linking HR Strategy to the Value Chain by George Kemish

Professor Dave Ulrich recently produced a video on the Future of HR (Outside/In) which emphasised the need for HR Strategy and Processes to be aimed at providing a service to the Investor, Customer and to Society. In my view it is the Customer who will have the biggest effect on both the Return on Investment and on the Bottom Line.  For this reason, I have been working on the linking of HR Strategy to the Value Chain – working back from the Customer.  In this article I attempt to provide a simple way of linking HR Strategy as part of the Business Planning Process whilst also highlighting the need to link employee engagement in a way that will enhance the overall value received by the Customer. I will start with the Business Planning Process.

When I visit some organizations, I still see business plans being passed to the HR Professional to interpret, after the planning cycle has taken place.  This places the HR Professional and line management at a distinct disadvantage. Including the HR Professional as part of the Planning Team and ensuring that the HR Strategy is written directly into the Business Plan, against the individual goals that are set, brings distinct advantages:

  • The HR Professional has first-hand experience of the inter-departmental interactions that have taken place in setting individual goals.
  • Departmental managers are provided with an opportunity to have an input into the content of the HR Strategy.
  • The HR Strategy can be reviewed and/or changed at the same time as the organizational goals are reviewed.

This reduces the risk of misinterpretation by the HR Professional when drafting the HR Strategy; Departmental Managers are likely to have more faith that the HR Strategy will meet their needs; it provides greater agility in bringing about change (i.e. there is no delay in changing HR needs as the HR Strategy will be reviewed at the same time as the goals that have been set); and, provided that the goals have been linked to the Value Chain, then the HR Strategy will also be linked in the same way. This, of course, means that the HR Professional will need to have a wider knowledge of business administration and management (i.e. not limited to a knowledge of HR Processes and Practices).  However, it is the Employee who will actually provide the Value through their own work.>

The quality of both Succession Planning and Induction Training (onboarding) can be critical in enabling or putting a constraint on operational performance as well as having a positive or negative effect on the Value Chain itself and, yet, I am seeing failures in both of these important areas.  I am not going to harp on about Succession Planning as I have already written an article on this subject. However, induction is one area where I am seeing a distinct difference in the quality of the training provided.  In some organizations, induction training has been close to non-existent; whilst in others employee engagement has been limited to the specific department in which they work. There is a need to ensure that the Employee understands the Value Chain (working back from the Customer); the inter-departmental interactions that support the Value Chain; and how they are expected to collaborate with other departments in order to add value and meet customer expectations.

During my visits to organizations during 2017 I have seen the following outcomes that have been brought about due the lack of engagement with the Value Chain:

  • Poor decision making that has resulted in a significant loss of market-share.
  • A lack of understanding of actions undertaken by Customer Services, by the Billing Department, coupled with a lack of understanding of the Billing Process by Customer Services; leading to customers becoming frustrated at being passed from ‘pillar to post’ when trying to have errors on their customer account rectified by the Supplier.
  • Poor communication between departments when the organization is undergoing major change, brought about by a lack of understanding of how change in one department is going to have a ‘knock-on’ effect in another.

HR is no longer for HR.  Like all departments, HR is there primarily to support the Value Chain within an organization.  This means that they have a responsibility for both meeting customer expectations through the business planning process and by ensuring that the Employee is fully engaged with the Value Chain.

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George Kemish is a consultant specialising in HR Strategy, Workforce Planning and Business Scenario Planning. Having started out as an apprentice in the engineering industry he moved into business administration where he held management posts in both HR and Financial Management from 1978 to 1993.

For the next 14 years George held a senior management position in the Education Sector with responsibility for Management & Financial Accounting; HR Management; Secretarial Services; Facilities Management; Events Management, Catering Management; Marketing; Public Relations; Management of Freedom of Information & Data Protection. As Secretary to the Board of Governors he was also responsible for: Advising on the interpretation of all legislation, regulations & best practice relating to corporate governance; committee administration; drafting of the annual corporate report (including year-end accounts); drafting of the business plan to support short, medium and long-term strategic planning.

In 2007 George moved to the Ministry of Defence where he was responsible for HR Strategy and Manpower Planning in respect of worldwide operations until 2016 when he founded his company; specialising in Business Planning from a HR perspective.