HR as Strategic Business Partner

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HR as Strategic Business Partner
Joris de Fretes
9 December 2009
Linking HR efforts directly to the business
strategy and to the environmental factors
that frame the strategy.
Strategic Business Partner
“HR Transformation”, Dave Ulrich, 2009

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PRINCIPLES FOR building HR FUTURE
• HR Strategy must be anchored to the business strategy.
• HR Management is NOT about programs; it’s about relationships.
• The HR Department must be known as the part of the organization that
“anticipates change” and “understands what is necessary to respond to it.”
• HR Executives should be an outspoken advocate of employees interests, yet it
must understand that business decisions have to balance a range of factors that
often conflict with one another.
• The effectiveness of HR efforts depend on staying focused on issues rather than
personalities.
• HR Executives must accept that constant learning and skill enhancement are
essential to their being an effective contributor to the business.
“Creating A Human Resources Strategy For Your Business”, Jan Spak, 2002
Some Questions
• Are all HR professionals in your organization have a
strong understanding of the business, competitors,
and the external business environment ?
• Has HR works already takes an outside‐in approach
based on external stakeholder (i.e. customer,
regulator, investor) ?
• Has our organization clearly defined organizational
capabilities that ensure strategy execution ?
• Are our HR leaders focus on business result ?

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Why Do the Transformation
BUSINESS CONTEXT
BUSINESS STRATEGY
HR REDESIGN
TRADITIONAL
HR
HR TRANSFOR-
MATION
• Traditional HR begins by focusing on HR issues and
redesigning HR governance or practices.
• HR Transformation begins with an understanding of the
context in which the business operates (both general
conditions and specific stakeholders).
The context of business
setting captures “why”
of HR transformation.
Identify readiness level
for HR transformation
through
HR Strategy
Assessment
HR’s role must be transformed in order to deliver
value to customers, shareholders, managers and
employees
This transformation requires integrating the various
HR practices and focusing them jointly on value-
added agendas such as intangibles, customer
connection, organization capabilities and individual
abilities
“HR Value Propositions”, Ulrich and Brockbank, 2005
Transformation Focus

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6 implications for HR transformation
• HR works does not begin with HR ‐ it begins with the business, how HR
activities create value for the stakeholders
• HR must have a direct line of sight to the market place – to customer who
buy the products and to shareholders who provide capital
• HR must be framed as a source of competitive advantage – able to create
human abilities and organizationalk capabilities better than competitors
• HR professionals must align practices with the requirements of internal
and external stakeholders
• HR professionals must acquire the personal knowledge and skills
necessary to link HR activity to stakeholder value
• HR professionals need to be able to spell out how to provide a unique
and powerful perspective of the linkages between employee
commitment, customer attitude and investor returns
Ulrich and Brockbank – HR Value Propositions
HR Transformation Process
Business Context
Globalization Technology
Employee inside Customer and Consumer outside
Investors Competitors
Organization Challenges
To respond the business context the organization need to be good at
Talent Learning Speed to change Leadership brand
Shared mindset, culture Innovation Accountability
or firm brand Strategic clarity Collaboration Efficiency
HR respond
Responding to these challenges affects all five dimensions of HR
HR
Profession
HR
Practices
HR
Professionals
HR
Function
Management
of People and
Organization HR
Dimensions

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Organizational Challenges
CHALLENGES – WE ARE GOOD at.. CAPABILITY OF HR ORGANIZATION COMPETENCIES OF HR PROFESSIONALS
Talent
Assuring competent & committed people
Able to attract, motivate, retain, and engage
competent employees
• Do talent audit
• Build employee value preposition
Speed
Making important changes happens fast
Able to change and change quickly to align with
customer needs
• Build a discipline change process
• Assimilate change into a new identity
Shared Mind Set
Turning customer reputation and identity into
employee actions
Able to build a culture that reflect customer
expectation and turn them into employee actions
• Perform a cultural audit
•Make customer reputation real to the employee
Accountability
Implementing discipline that result in high
performance
Able to meet commitment • Build and implement PMS
Collaborations
Working across boundaries
Able to make the whole more than the sum of parts
• Build productivity improvement effort
• Sharing ideas, people, products, services
Learning
Generating & generalizing ideas with impacts
Able to generate new ideas & generalize them
across boundaries
• Generate new ideas
• Generalize them across boundaries
Leadership Brand
Embedding leaders throughout organization who
embody leadership brand
Able to identify leadership brand that connect
customer reputation and employee behavior
• Ensure leaders demonstrate leadership
basics/code
Customer Connections
Building trust with targeted customers
Able to create practices that create customer
connectivity
• Convergence between employee and customer
mindset
Innovations
Doing something new both content & processes
Able to innovate and create new ways
• Establish innovation protocols
• Instill spirit of innovation among all employees
Strategic Units
Articulating & sharing a strategic point of view
Able to create a unity of share understanding of the
desire strategy
• Create an intellectual, behavioral and process
agenda
Efficiency
Managing cost of operations
Able to manage cost efficiently • Reduce costs through process, people & projects
‘how-to” HCD transformation into Business Partner
Knowing the external
Business realities
Ensuring HR
professionalism
Building HR resources Creating HR practices
Serving external &
internal
stakeholders
– Technology
– Economics
– Demography
– Roles
– Competency
– Development
– Strategy
– Organization
– People
– Environment
– Information
– Employees
– Customers
– Investors
HCD value
proposition
These elements frame the agenda for HCD going forward and set new measurement
of HCD capabilities in delivering values to the company

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Transformation Criteria
HR Value Proposition Element
• Knowing the external business
realities
• Serving external and internal
stakeholders
HR Transformation Criteria
• Criterion 1 : HR professionals recognize
external business realities and adapt HR
practices and allocate HR resources
accordingly
• Criterion 2 : HR function creates market
value for investors by increasing intagibles
• Criterion 3 : HR increases customer share
by connecting with target customers
• Criterion 4 : HR function helps their
managers deliver strategy by building
organization capabilities
• Criterion 5 : HR function clarifies and
establishes an employee value proposition
and enhances individual abilities
Transformation Criteria
HR Value Proposition Element
• Creating HR practices
• Building HR resources
HR Transformation Criteria
• Criterion 6: HR function manages people
processes and practices in ways that add
value
• Criterion 7 : HR function manages
performance management processes and
practices in ways that add value
• Criterion 8 : HR function manages
information processes and practices in
ways that add value
• Criterion 9 : HR function manages work
flow design and processes in ways that add
value
• Criterion 10 : HR function aligns its
organization to the strategy of the
business
• Criterion 11 : HR function has a clear
strategic planning process for aligning HR
investments with business goals

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Transformation Criteria
HR Value Proposition Element
• Ensuring HR practices
HR Transformation Criteria
• Criterion 12 : HR function has HR
professionals who play clear and
appropriate roles
• Criterion 13 : HR function builds HR
professionals who demonstrates HR
competencies
• Criterion 14 : HR function invests in
training and development of HR
professionals
Ulrich and Brockbank – HR Value Propositions
What drives performance in the new HR Model
Shared service
center
HR Business
Partner
Center of
Excellence
My credibility rest in .........
Therefore I need .........
• Strong transactional solutions
• Integration across processes
• Integration of customer
management and HR
management activity
• Performance measurement
tools
• Financial measurement tools
• Customer experience
• Delivery of KPI
• Cost Performance
• Visible continous
improvement
• Bring close to the
business
• Flexing HR delivery to
adopt business changes
• Having skills to deliver
• Deep skills and credibility
• Specialized tool set
• Accurate predictive
capability
To predict business demand and
model the outcomes – for example
how to translate :
seasonal to resourcing
peaks strategy
develoment to organization
new market design
sales force to integrated
performance performance
reward system
• Specialist not generic tools
• External benchmark
• Scorecard metrics
• Predictive capability

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Future HR Competencies
Strategic contribution: Manage culture, facilitate "fast change“, involved
in strategic decision‐making, and create market‐driven connectivity.
Personal credibility: Credible to both their HR counterparts and the line
managers whom they serve. They also have effective writing and verbal
skills.
HR delivery: Focus HR activities in four key areas: staffing, training &
development, performance management, managing/ measuring the impact
of overall HR practices.
Business knowledge: Keen understanding of how the firm creates wealth,
how the firm is horizontally integrated (e.g., how sales and marketing relate
to manufacturing), and what the industry challenges are.
Knowledge of HR technology: Able to leverage technology for HR practices
and use e‐HR/Web‐based channels to deliver value to customers.
University of Michigan, Ann Arbor, HR competencies Study, 2005
Domains of Competencies for HR Professionals
• Knowledge of the business
• Delivery of HR practices
• Ability to manage change
• Culture management
• Personal credibility
• Financial management
• External competitive and customer demands
• Strategic HR performance management
• Critical causal thinking,
• Understanding principles of good management,
• Estimating causal relationships, and
• “Executive” communication (to communicate HR strategic
performance results to senior line managers.)
David Ulrich, “HR Scorecard”, 2001

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HR Transformation Milestone Checklist
1
Business
Context
(WHY)
2
Outcomes
(WHAT)
4
HR
Account-
ability
(WHO)
3
HR
Design
(HOW)
• Business Demands
• Globalization
• Technology
• Investors
• Competitors
• Stakeholder
capabilities
• HR capabilities
• HR Organization
• HR Process
• HR people management
• HR Skills & Competencies
• HR Culture and mindset
• HR Leadership Team
• Line Managers
• External Customers &
Investors
• Consultant &
Advisors
XL Experience

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Nature of telecommunication industry that drives HR
strategy :
•Capability in technology change rapidly
•Capability in financial capital intensive
•Capability in regulation new industry, not “mature”
•Capability to understand customer needs trends,
segmented customers
Business Context
Need alignment to company direction
Need to clarify role, accountability, & capabilities
Need to revamp organization to create strong platform
To realize business strategic partner role to function
1
2
3
4
The Background
To anticipate industry dynamics and internal
business requirements, we are looking at several
aspects to address:

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Organization Human Capital Development
Director
HC Business
Partnership
Learning and DevelopmentHC Operation
HC Strategy and
Planning
• Employee Relations
• Reward Management
• Resourse Management
• HC Information System
• Employee Branding
• Corporate Culture
• Managerial Competency Dev.
• Knowledge Management
• Technical Competency Dev.
• Leadership Lounge
• Performance Management
• Talent Management
• Organization Development
• Organization Productivity
Source: Reengineering Human Resources, Lyle M. Spencer, Jr., Ph.D.
TODAY
Value to the business
30%
10%
60% StrategicStrategicStrategic
DeliveryDeliveryDelivery
ministratministratministrat
ionionionAdAdAd
TOMORROW
Processes are standardized and streamlined, while
maintaining high flexibility for improvements
Organization improvement is to contribute more values to
the business
StrategicStrategicStrategic
DeliveryDeliveryDelivery
AdministrationAdministrationAdministration
ResourcesResources
10%10%
30%30%
60%60%
Resource

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HCD operational roles1HCD operational roles1
• As a strategic business partner-
alignment of HR activities and initiatives with the
company strategy
• As an organizational change agent-
supporting the change and transition of the business
in the area of the human capital in the organization
• As a champion of operational
excellence - to provide quality service at the
lowest possible costs to the organization
• Building relationship with internal &
external business partner- the employee
advocate is able to take care about the interest of
employees
1adopted from D Ulrich “HR Roles Model”
2adopted from G Haines “Center for Strategic management”
HCD Key Deliverables2HCD Key Deliverables2
Key deliverables are identified as spearhead in realizing unit objectives
Strategic People
Management
Acquiring Talented
Workforce
Creating learning
organization
Collaborating with
stakeholders
Engaging
Workforce
Building high
performance
team
Creating
Organization
culture
Be strategic business
partner
Alignment with company
Strategic plan
Leadership
Personal XLence
XLence Plan - performance setting process
which ensures individual objectives and
development plans are directly linked to achieving
business plan goals.
XLence Check
Point - critical to the
whole Personal XLence
process. In this review, the
superiors are required to
lead and support the
employees on pursuing the
target achievement. This
session is also to discuss
the progress of
objective/achievement
compare with the target
planned.
XLence Evaluation
- the completion of
Personal XLence process
is the annual
Performance Evaluation.
This written review should
summarize the ongoing
feedback, both formal and
informal, given throughout
the year.

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Talents Pool
E5
E4
E3
E2
E1T1
T3
T2
T4
T5 Staff, Officer,
Engineer, Analyst
Supervisors
Managers
Vice President
General Managers
DIRECTORS
Employee Population
Talents Pool
POTENTIAL
CURRENT PERFORMANCE
Outstanding
Future
Potential
Strong
Future
Potential
Stable
Future
Potential
Has Issues/
Insufficient data
WATCH LIST
WATCH LIST
UNKNOWN/
WATCH LIST
Demonstrates Performance
Emerging
Performers
(3 – 5 years)
Accelerated
Development
Pool
(1 – 3 years)
Solid
Performers
Stands Out
Accelerated
Development
Pool
(1 – 3 years)
Accelerated
Development
Pool
(Immediate)
Solid
Performers
Development Plan
PERFORMANCE
DEVELOPMENT
COMPETENCY
DEVELOPMENT

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Management Development
Program for GMs
Session 1
MANAGING BUSINESS
PERFORMANCE
By Practicing Sound People Leadership
The 1st session modules help participants
strengthen the basics for achieving
business results and for setting up
sound practices in people
leadership
WHY?
Session 2
The 2nd session modules support participants
in further developing capabilities to
ensure business success through
stronger collaboration both internally
and externally.
WHY?
Five-days program
• Competencies addressed:
• Commercial Orientation;
• Visionary Leadership;
• Strategic Decision Making;
• Change Leadership;
• Aligning Performance for Success;
• Delegating Responsibilities
PARTNERSHIP FOR EXCELLENCE
By Developing Creative Synergy
Three-days program
• Competencies addressed:
• Building Business Partnership;
• Building Trust;
• Communication;
• Customer Focus
To revamp internal HCD roles, accountability, and capability
To have strong organization platform to company strategic initiatives
To be a strategic business partner to function
To deliver service excellence to internal and external customers
To rejuvenate team’s passion and energy in achieving company objectives
1
2
3
4
The main theme is to solidify role as “strategic business partner”
How can we get there?
5

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Further looking into the horizon, change agent’s role is the end goal
Business
Partner
BusinessBusiness
PartnerPartner
Change
Agent
ChangeChange
AgentAgent
Solutions
Development and
Delivery
SolutionsSolutions
Development andDevelopment and
DeliveryDelivery
Administration and
Compliance
Administration andAdministration and
ComplianceCompliance
High
HighLow Influence with the business
Value to the
business
Administrator
Professional
Change Agent
Business Partner
Quick wins Med-term End goal
Currently HCD roles
End-goal we want
to be
Intermediate goal
we can achieve