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We need to transform HR

The marketplace is constantly changing which begs the following question: in this fluctuating environment, how can companies succeed? The answer – said Professor Dave Ulrich at the recent Progress Conference presented by the Business Results Group in association with the Gordon Institute of Business Science (Gibs) – is by changing the HR system in your company. You can ensure that your company's HR system is turned around by marrying strategic HR and HR strategy.

What is strategic HR?

Strategic HR, said Ulrich, starts with looking at your business. "You then need to look at the environment and ask yourself a number of questions, such as: 'How does the environment affect my business'," he said.

Given the business flow, strategic HR asks: what are the HR priorities that will help us, as a company, succeed? Your job, as an HR professional or business leader, is to ask: "Given what my business is trying to achieve, how can HR help to make this vision a reality?" When you've answered this question, you need to make sure that the HR function in your business fulfils your business needs.

What is HR strategy?

Once you've answered these strategic HR queries, in terms of your business' HR strategy you need to ask what the HR function needs to do for the company to be successful.

4 Phases of HR transformation

Once you've defined the strategic HR and HR strategy arms of your business, you can proceed to HR transformation. There are four phases to any HR transformation initiative:

1. Business context

During this phase, you need to ask:

• Is this issue I'm wrestling with building a business case for change?

• Am I helping my leaders recognise that HR is part of our success?

2. What is the outcome of the HR transformation process?

Ulrich said that in this phase you need to look at what will happen, in your organisation, if you perform HR transformation well.

3. How do we redesign the HR function?

Here, you need to ask how you need to get your company's HR function and the organisation itself working well together. Innovation of your company's HR practices is necessary.

4. How do we build accountability for HR?

13 Milestones in HR transformation

Ulrich said that there are 13 milestones, in the above four phases, that you have to achieve for your HR transformation initiative to be successful. These are:

Phase 1: Business context: Why do transformation?

Milestone 1: HR director recognises that an HR transformation initiative would be of value:

• The HR director is sponsoring the transformation and staying actively engaged.

• The HR director has a compelling business rationale for why the transformation effort is needed.

Milestone 2: Create a transformational team:

• A team of internal HR employees are members of the team responsible for transformation.

• The team is highly credible and represents a good cross section of HR.

Milestone 3: Define, assess and prioritise the new business realities that require HR transformation and change:

• We have a common view of business needs and priorities created by considering all key stakeholders.

• Key business leaders participate in the identification of business needs and priorities.

Milestone 4: Complete and communicate the business case for performing HR transformation:

• The business case for HR transformation needs to be clearly communicated early on in the process. It also needs to be communicated on an ongoing basis.

Phase 2: Outcomes: What are the results of transformation?

Milestone 5: Talent: Define the talent requirements and outcomes necessary to deliver on our business strategy:

• Competencies: We know the knowledge, skills and abilities we require in the future.

• Commitment: We know how to build commitment (employee value proposition).

• Contribution: We know how to help employees find meaning in what they do.

Milestone 6: Culture: Define the culture or capabilities that we need to build business value:

• Define the desired culture from the outside in (firm brand).

• Make the culture real through an intellectual, behavioural, process agenda.

Milestone 7: Leadership: Define the desired leadership brand for success then translate that brand into being and building leadership.

• Build: Master the processes for building the leadership brand throughout the organisation (implement the six steps of leadership brand).

• Be: Sustain personal leadership behaviour by helping individual leaders implement the seven disciplines of sustainability.

Phase 3: HR redesign: Changes in HR department, practices, people and analytics?

Milestone 8: HR mission: Create an HR strategy statement: who we are, what we do and why we do it:

• We have a direction statement for why HR exists based on the work we did in phase 1 and 2.

• Our statement captures the need to support the key capabilities and drive business results.

Milestone 9: HR organisation: Shape the HR organisation with clear accountabilities for centres of expertise, embedded HR, operational HR, shared services and corporate:

• Each of the HR groups/department has clear roles and responsibilities with clear interfaces with each other.

• In our design, we separate strategic work from our foundational/transaction work.

Milestone 10: HR practices: Audit HR practices to prioritise those which will align with strategy, integrate with each other and be innovative:

• Key HR practices are being designed to reinforce the business strategy and capabilities.

• Interfaces between HR practices are being clearly defined.

Milestone 11: HR professionals: Define what makes an effective HR professional in terms of role, competencies and activities:

• Roles and responsibilities are being defined in a way that HR professionals will understand how their work impacts the business.

• We have a competency model for HR that aids development and creates a strategic HR function. We invest in developing HR professionals.

Milestone 12: HR analytics: Use HR information and analytics to drive better business and HR decision-making:

• We use information to make better business decisions.

• We use information to make talent, leadership and culture decisions.

Phase 4: HR accountability: Who plays what role in HR transformation

Milestone 13: Make sure the transformation team is staffed by the right mix of people and engaged in the right activities.

• We have a team/ individual responsible for implementation.

• We have staffed the organisation based on ability and contribution rather than who was already in a particular position.