So You Want To Be Strategic – What Next?

Which of These is True?

“The next ten years will be the HR decade.”Professor Dave Ulrich, University of Michigan

“I am describing your human resources

department and have a modest proposal.

Why not blow it up?”Tom Stewart, editor Fortune Magazine

The (REAL) Question???

How can HR professionals

produce significant value

and deliver results???

THE ANSWER

BE A STRATEGIC PARTNER

ON BEING A “STRATEGIC PARTNER”

Only 34% of HR Executives Are Viewed

As “Strategic Partners”Source: SHRM/BSCol Survey, 2002

HR Competency Domains

Personal Credibility

Strategic Contribution

HR Delivery

Business Knowledge

HR Technology

HR Competency Domains

Strategic Contribution 43%

Personal Credibility 23%

HR Delivery 18%

Business Knowledge 11%

HR Technology 5%

WHAT IS STRTEGY?

Strategy is about how we compete.

Strategy is about creating value.

Strategy is about making choices.

Strategy is the allocation of scarce resources.

Three Easy Steps to Strategic Partnership

1. THINK

2. PLAN

3. ACT

THREE ELEMENTS OF STRATEGY

1.STRATEGIC THINKING (Formulation)2.STRATEGIC PLANNING (Development)3.STRATEGIC ACTION (Implementation)

STRATEGIC THINKING (Formulation) – step #1

What is “Strategic Thinking”?

How do you get it?

How do you let others know you

have it?

NO ONE “ANNOINTS” YOU AS STRATEGIC

Being strategic is not what we do … It’s how we process information

Being strategic is not about having the right answers … It’s about asking the appropriate questions

CONSIDER THE FOLLOWING:

“A fool and his gold are soon parted”

First, process the information

Then, frame a question that you would ask

about the statement

CONSIDER THE FOLLOWING:

“Your company’s key, intellectual talent will be in extremely short supply in five years, jeopardizing your company’s future”

First, process the information

Then, frame the questions that you would ask about the statement

STRATEGIC PLANNING (Development) – step #2

ASKING THE RIGHT QUESTIONS

KEY STRATEGIC QUESTIONS

Where is the company now?

Where does the company want to

go?

How will the company get there?

STRATEGIC QUESTIONS

What business are we in?What’s going on in the world in which we

do business?What business should we be in?What are our resources?What are our core competencies?Who are our competitors?How will we compete?

STRATEGIC CHOICEHOW WE WILL COMPETE?

1.Differentiation

2.Low cost provider

3.Customer Intimacy

4.Innovation

STRATEGIC CHOICEDi

ffere

ntia

tion

Cost of doing business

High

Low

High Low

STRATEGIC ACTION (Implementation) – step #3

“Operational Effectiveness”

Operational Effectiveness:

A process in which the discrete

activities of the organization are aligned in a way which maximizes the capabilities of the organization to achieve competitive advantage.

What is the appropriate role of Human Resources

in achieving competitive advantage?

Visioning

Strategic Planning

Operational Effectiveness

Competitive Advantage

Sources of Competitive Advantage

Economic/FinancialCapability

Strategic/MarketingCapability

TechnologicalCapability

Sources of Competitive Advantage

Economic/FinancialCapability

Strategic/MarketingCapability

TechnologicalCapability

OrganizationalCapability

Organizational Capability

“Organizational capability is a business’s ability to establish internal structures and processes that influence its members to create organization-specific competencies and thus enable the business to adapt to changing customer and strategic needs.”

Source: Organizational Capability: Ulrich & Lake

Nordstrom’s – A Strategic HR Plan

You are the VP of Human Resources for Nordstrom’s Department Stores. Your CEO has just briefed you and other senior staff on Nordstrom’s strategic decision to compete based on differentiation; the differentiator being “superior, world class customer service.” Your assignment is to align the organization’s human resource practices to support this new strategy.

Please address the following questions:

1. What are HR practices that need to be considered?2. What are the changes that you would make to those

practices?3. How would you proceed to implement the necessary

changes?

Becoming Strategic

Define your jobBe competentKnow “business”Ask the right questionsPractice

Think Plan Act

Business Literacy

Information Technology

Marketing

Finance and Accounting

???

Sources

Books, magazines, internet

Teaming with other executives

Courses, seminars, conferences

Job rotation

Strategic Assignments1. Present a summary of a new trend/technique to others.2. Write a proposal for a new system, product, procedure.3. Spend a week with customers; write a report.4. Do a competitive analysis.5. Write a speech for someone higher in the organization.6. Write up a policy statement.7. Study customer needs.8. Do a postmortem on a failed project.9. Do a problem-prevention analysis.10.Study innovation among customers/competitors.11.Interview outsiders on their view of the organization.12.Evaluate the impact of training.13.Construct a success/derailment profile.14.Write up a contingency scenario.15.Work on affirmative-action planning.

Practice

Being

Strategic

Five Strategic Partnership Activities

1. Sit in on budget meetings and annual planning meetings for departments outside of HR.

2. Form a business book club for the executives in your organization.

3. Find a mentor (outside of HR) two grade levels above your own.

4. Write a job description for the job you want to have in five years and discuss with your boss how to get there.

5. Review your organization’s strategic planning process and recommend appropriate changes.

Wall Street Journal Vice President, Human Resources Global Fortune 500 Company of 30,000 employees, the

leader in its field, is seeking a Corporate Vice President of Human Resources with a strong background and focus in organization effectiveness, development and training. “Partnering” with corporate senior management and business sector heads to bring forth a new business culture, the VP will establish HR as a strategically focused internal consulting arm to the company. The successful candidate will have a businessperson’s perspective and a demonstrated track record in change management, re-engineering, leadership development and training.

Respond to: M-67, P. O. Box 17182, Philadelphia, PA 19105 EOE.

Suggested Readings

Dave Ulrich, Human Resource Champions. Harvard Business School Press, 1997

Michael E. Porter. Competitive Advantage. The Free Press, 1985

Dave Ulrich & Dale Lake. Organizational Capability. John Wiley and Sons, Inc., 1990

Becker, Huselid and Ulrich. The HR Scorecard. Harvard Business School Press, 2001

Jim Collins. Good to Great. HarperCollins Publishers, Inc., 2001

“Ships may be safe in the harbor,

but

that’s not what ships are built for.”

Thank You