Ever since Dave Ulrich created the HR business partner (HRBP) design in 1997, it has become the standard organizing principle for HR functions globally. Over that quarter century, the role of HR has undergone significant transformation: HR now sees itself as a strategic partner in driving business outcomes. However, despite this shift in perception, many HR functions still need help to deliver measurable business value.
Historically, HR has focused primarily on inward-looking processes, such as learning and development, compensation, and talent management. While these processes are critical to ensuring an organization’s workforce’s health and wellbeing, they do not consistently deliver measurable business outcomes. As a result, many HR functions still are viewed as cost centers rather than strategic partners, even as they believe they have improved their strategic orientation and impact. These HR functions still lack the orientation, processes and resources needed to connect workforce capabilities with business outcomes, making it challenging to deliver measurable value.
The HR operating model design Ulrich pioneered was meant to deliver talent processes aligning the workforce with the business objectives. The vanguard for this objective are the HRBPs, many of whom carry out that mission admirably. The best HRBPs work seamlessly with their colleagues to create HR programs and people processes that provide the support the business needs to execute the strategy and grow the business. Yet these world-class HRBPs too often are the exception that proves the rule.
One problem is that too few people in HR focus primarily on business outcomes. The HRBPs alone cannot get it all done, and they get pulled too often into firefighting and away from strategic work. The related problem is that too much work in HR focuses on inward-looking HR processes carried out as “HR for the sake of HR processes rather than desired strategic outcomes.”
The resulting people processes do little to improve strategy execution and organizational effectiveness. The most obvious examples are the employee relations and risk management people processes. Yet, in many companies, it applies equally to people processes such as recruitment and learning & development. At worst, they work at cross purposes with the business objectives, impeding business performance like sand injected into the workings of carefully-engineered machinery.
In response to this challenge, Max Blumberg (JA) 🇺🇦, Dave Millner and I have created a new HR operating model. We propose a pivot in how HR is structured and works, to focus more directly on the capabilities required for successful strategy execution. The pivot relies on a combination of two things: (a) a new set of design criteria (objectives) for HR and the HRBPs – delivering the required workforce and strategic capabilities that enable the business outcomes, and (b) new processes for identifying, measuring, and improving the needed workforce and strategic capabilities.
Our new working paper explores this approach and highlights the key components HR functions must adopt for the new operating model to succeed: A Strategically Aligned HR Operating Model
Three options are available for HR functions to orient their operating models to deliver the requisite workforce and organizational capabilities:
(a) Redirect people and roles you already have to deliver the workforce and strategic capabilities and close any competency gaps within HR that prevent them from developing the capabilities,
(b) Increase headcount, add people who have the time and expertise to deliver the capabilities, and
(c) Redesign the entire HR function around delivering the capabilities, and staff the roles accordingly.
While HR functions across organizations are at diverse stages of maturity, each has its own set of strengths and capabilities. Some may have to do only the first step – addressing the orientation of existing people and roles, the work they focus on doing, and closing competency gaps among current personnel. Others will need to deploy additional personnel – increasing headcount – to ensure the strategic work is done well and in a timely fashion.
Yet our experience has shown that most organizations, representing the bulk of companies globally, will need to totally restructure their HR function around the new HR operating model to maximize the chances of delivering the workforce and strategic capabilities required to produce the needed business outcomes.
On March 7 at 8am Pacific Time, the three of us will lead a webinar on Creating a Strategically Aligned HR Operating Model, which will take a deep dive on these issues. We will address the new HR organization design, strategic alignment and operating steps that are best positioned to enable success with the new operating model.
