We often talk about HR being strategic without being specific about what sort of thinking we actually hope to see. I thought It might be helpful to run through a couple of examples of what strategic thinking looks like and how it differs from what we might otherwise do.
Example One: Improving the quality of new sales reps
A common goal in HR is to improve the quality of the new sales reps being hired. What would we normally do? Well, we’d try to improve the talent acquisition process so that the average quality of hire improved.
What might a strategic HR professional do? They might start by learning more about the sales function to get a deeper understanding of what is most needed. Things are always more complex than they appear at first blush. One insight you might uncover is that the sales manager might say “Look, it’s not so much the average I want you to improve, I want you to find me more stars.” Okay, that’s interesting. That’s a different and more specific goal.
Working from the sales manager’s gut call that you needed to look at the top of the distribution (i.e., more stars) you might ask yourself what would happen if you looked at improving the bottom of the distribution.
I once worked on a paper with Shaker Consulting Group which included a case where the organization did just that. They found that the vast majority of sales reps (the top 80%) sold $1.5 million per year, whereas the bottom 20% only sold $0.3 million. Each bad hire was costing them $1.2 million in sales each year. The goal then was to focus effort on reducing bad hires, not increasing the average quality or aiming to hire more stars. It’s worth considering which is harder: finding more star sales reps or doing a better job of screening out bad ones?
The bottom line, in this case, is that the strategic HR thinker goes beyond the obvious to consider where the greatest impact will be.
Example 2: Building Automation Capability
Here is a second example and one you should be grappling with today. We all know that more and more technology is coming into HR. It’s also apparent that the multitude of systems leaves gaps where processes or data integration requires manual intervention. As a strategic thinker, you will want to address this. So what do you do? Do you invest in Robotic Process Automation (RPA), Low Code solutions, No Code solutions, or something else?
If you are feeling uneasy with this question that’s good. Chances are you are not qualified to choose between RPA and No Code. You may not even know what these are. Furthermore, the need is not so urgent that you can justify spending a lot on an automation project this quarter.
What does the strategic HR thinker conclude? They recognize that what they need to do is build capability. That might mean simply encouraging and enabling current staff who are keen on automation to learn more about it. It might mean looking to hire people who have a background or interests that will predispose them to being skilled at automation. You won’t have the budget to hire an automation specialist, but you might hope your next HR hire is someone who took a course in programming at university or has been trained in designing processes.
The strategic approach has a different feel from most of what we do in HR. It’s not about reaching a specific objective; it’s about creating a broad capability that will likely prove to be useful in some way we can’t yet anticipate.
Being strategic means a few things. It means looking beyond the obvious as was the case in the issue of hiring sales reps. It means looking to the long-term and taking the steps now to set the company up for future success as was the case in automation.
In all cases being strategic means having a really good understanding of the business and where it is going. HR leaders need to spend time outside HR as much as possible so that they build that understanding.