Strategic Response - Steve Levy

I have heard people talk about Steven Levy for years. Reading his blog (The Recruiting Edge) is a must for both information, insight and great “fiction.” Whether it was the outrageous costumes or the piercing insights, Steve is a the recruiting industry’s answer to Tom Peters. So I was surprised and pleased when he started commenting on the Strategic HR posts. His comments are fantastic, but I was especially intrigued with this one:

Ask most in HR to perform a SWOT analysis of their organization's human capital or to assess the PEST

(political, economic, social, technological) issues that may impact the org over the next business cycle...Do they religiously peruse HBR or have Michael Porter on their bookshelves (even Dilbert would do)?

Steve is right on. You can’t do strategy unless you understand business, and you can’t understand business unless you understand your markets. You must always make assumptions about the problems you will face and the opportunities that you are exploiting. The two frameworks that are most commonly used are SWOT and PEST. They are good shorthands to get to the basic assumptions that confront your planning scenarios.

I will have to slightly disagree with Steve on the last point though. I agree that HR people should be business facile enough to explore information sources outside of their functional discipline. In fact, I agree that most of their reading should be there. But HBR is filled with a lot of standard orthodoxy and hand-waiving that are confusing even to practitioners. And Porter is rarely understood even by B school students (I have had the good fortune to sit through some of his classes, and I can’t say I was that impressed). I think Fifth Discipline and The Innovator’s Dilemma should be required HR reading, as well as Crossing the Chasm. All popular and hackneyed books, but they all allow the HR practitioner to understand the true fundamentals of business.

Do they eschew HR meetings for finance, marketing, supply chain, etc. associations, conferences, and seminars? 

All orgs are broken down into only three realms: Financial, Operational, and Organizational. Strategy is aligning the middle of the ballantine - and you know what this means...

Great point Steve. It can be hard for HR to remember that it is a service organization. As such, it serves other parts of the organization. It is a little hard to serve finance if you don’t know what they do, or what problems they are trying to solve.

It seems to me that “being strategic” means always getting three things right:

1. The block-and-tackle, day-to-day stuff that is required to be able to provide service to any organization. You have to be able to answer “How many employees do we have?” types of questions, whether you outsource getting that number or keep it yourself. The basis of credibility of any function is whether it can answer those types of questions (sales = “How many units have we sold?” marketing = “What’s the latest buzz?” manufacturing = “What’s our turn on parts inventory?”).
   
2. The functional strategic stuff. You have to be able to add unique value to your organization. That is as much dependent on what type of business you are in as it is about your function. If you are an HR department inside a professional services organization “strategic” looks and acts different than if you are in an HR department in a manufacturing firm. And that same manufacturing firm will have different needs based on geography, employee population and long-term talent challenges.
3. The service strategic stuff. Each department you are catering to has a different strategic need. You can’t understand that need unless you know their function. How can you tell marketing that their strategy of “owning the airwaves” will be tough given that your only two on-air personalities are about to leave unless you understand what they do and how they do it?

This last piece gets directly to Steve’s point: maybe you should drop that next comp seminar and instead go to a marketing seminar. At the very least it will teach you something about your clients. At the most, it will help you get out of the self-perpectuating boundaries of your function.

Comments

[Steve]

Jeff, you sure caught me on the Porter book - although I would offer that when one crosses Porter with Adams one gets Senge. Incidentally, read ANYTHING you can written by Edward de Bono.

As for HBR (BTW, I really like stuff out of USC's Center for Effective Organizations), its like reading the Wall Street Journal - if you read it for a week, you might begin to learn a few things and perhaps, just perhaps, you'll even experience an "a-ha!" moment. When you read it for one, five, or ten plus years, you start "seeing" things - even in the standard orthodoxy. What I'm saying is that learning about business is a long-term learning process - if you're new to HR or HR strategy, you're just going to have to start small when introducing business terms into the mix. Ask your constituency for a list of publications, websites, associations, etc. (hey, better yet, host the local association meetings at your company - wink, wink).

IMHO, as I noted, the real strategic element is getting the financial, organizational, and operational pieces to align better - meaning more overlap (BTW, the non-overlapping piece of the org circle represents the standard HR elements). For example, talk to your CFO and ask them for their favorite metrics used to track the financial health of the company (do you know what your company's critical number is?) - then ask their assistance in turning these metrics into ones you can use in your HR org. Then do the same with heads of other functions.

In the end, it can only be strategic if it can be measured and related back to the business objectives.

Jeff, once again, thanks for giving me the forum to express my views. There's a reason you're the "best" blogger...