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Tuesday, November 03, 2009

From Transactional to Strategic HR, Where do We Begin?

This is a third of a series. Please read my two previous posts so you can appreciate this one more.

"Where do we begin?" I heard this question right after I went down from the stage during the 3rd HR Philippines Convention where I was asked to speak about how to transition from transactional to strategic HR. Right there and then I realized I missed talking about something very important. That is my main motivation for writing this post.

Where is ground zero? How do we make the first step? and the next? HR can't suddenly wake up one day and say to the boss, "Boss, we've decided to go strategic so we expect you to support a lot of changes that are going to happen from now on." Let me share with you an actual experience I had helping one HR Department play a more strategic role in their organization.

It of course all started with a decision. The HR Department said they want to play a more strategic role and realized they needed help. They called a team of HR Consultants to help them. That team included me.

As consultants, our first step was to determine how far they've gone with their HR work and found that they are in fact doing mostly transactional activities with a sporadic instances of doing more strategic work as they were allowed to do. we designed a sort of a crash course on developing a strategic HRD plan that ran for five days. After the workshop we guided the HR team in the process of actually developing and implementing their strategic HRD Plan. We followed Kotter's 8-step change management process to ensure that all the necessary changes are identified and fall into place. From here on, I will tell my story using Kotter's model.

Step 1:Create Urgency -
HRD talked to management. They said that they are doing mostly transactional work. With management's support and the cooperation of the rest of the organization, HR can play the role of a strategic partner that can help the company get the most out of its human capital. They laid out the transition plan to management that looks like this:
  • They will conduct focus group discussion with managers to determine their perception of HR's roles and to find out what they expect if HR is to play a more strategic role in the organization.
  • The expectations will be presented to mancom together with a strategic plan that details how these expectations will be met.
  • they will craft a set of HR Philosophy, Principles and goals in partnership with line management to ensure that all these are aligned with the organizational goals and strategic direction.
  • They will carry out a well studied change management plan to ensure that all changes are acceptable and doable.
With Management approval, HR went ahead with their plans and started working on their focus group discussions. They talked to several managers and supervisors in the head office and branches in several regions. They found that HR was failing in most expectations. Line managers feel HR was not doing enough, they don't appreciate much of HR's programs and policies, they feel that the Performance Management System was too complex and cumbersome to use, and they don't fully appreciate its value. There are even managers who are unfamiliar with company offered benefits. It was a painfully humbling experience for HR but it was what they needed to go back to management to get their blessing on courses of action that HR needed to make so they can play a more strategic partner role.

Step 2: Form powerful coalition - When HR presented to the whole management team its strategic plan, they can't help but agree because a lot of the things HR said need to be done came straight from them. HR made sure that the line managers are with them all the way so HR said that all the policies and procedures born out of the new plan will be done in collaboration with the line managers and in consultation with representatives from various sectors of the organization. In a nut shell, the approach was both iterative and collaborative. The line managers liked the idea.

Step 3: Create a vision for change - Everyone wants goal clarity. HR devised a set of HR philosophy, principles and vision to vividly describe the results of the new strategic partnership between HR and the line. These exercise made it clear to everyone in the management team that HR Management is not the sole province of the HR Department but a shared function between them and the line managers.

Step 4: Communicate the change - HR presented to management a plan on how it will communicate the changes before and as they happen to make sure that everyone is on the same page, understands and appreciates what HR is doing and the role the line plays in each stage. They used all possible channels including, office memos, emails, discussion forums, bulletin boards and focus group discussions.

Step 5: Remove obstacles - HR realized that any obstacle to their plans are born out of misunderstanding and lack of capability, either theirs or those of the recipients of HR services. HR came up with avenues for feedback mechanism and engaged people in dialogues. They made it easy for people to raise their concerns and their reason for whatever unwillingness they have so HR can better understand them. HR also made training an important component of each change to make sure that line managers are not only appreciative of the change but are also equipped to play their role. For example, HR made sure that managers don't only have full appreciation of the new Performance Management System but are equipped to take on a performance manager's role. They taught the Managers how to do behavioral interviews so managers can put their traditional questions to rest and start being more strategic in their screening of candidates. These strategies helped HR relieve managers and employees of worries about the new HR actions.

Step 6: Create Short-term wins - Because HR's strategic plan was so clearly drawn, everyone knows when a milestone is achieved. They celebrated each milestone, recognizing not only the people in HR who made it happen but everyone in the line who contributed. This helped strengthen line championing of HR strategic actions.

Step 7: Build on the change - We realized how important it is to build continuous improvement into the systems and procedures HR created. They made sure that multi-sectoral evaluation of the newly implemented programs were done. This helped ensure that policies and procedures are changed before they become obsolete.

Step 8:Institutionalize the change in the culture - HR included the changes in the company orientations and on boarding programs. The needed HR skills to help line managers play their HR roles were made part of the company's management development program. Newly promoted supervisors and managers undergo HR briefing so they know at the very onset that HR is not a department and that HR Management is a shared role between them and the HR Department.

The steps towards becoming a more strategic partner is not cast in stone. There are no hard and fast rules. You can come up with your own strategy or borrow from what I shared here, it doesn't matter. What matters is you take the first step and never stop until you are able to achieve your goal. You will face a lot of discouraging barriers like doubts and resistance, you should not let these things stop you. Playing a strategic HR partner role will sometimes feel like you are leading from the middle. It's true, get used to it.

Next post: From Transactional to Strategic HR, The Needed Competencies.

Watch out for it!

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