human resource

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JWI 522 (1192) Page 1 of 6

JWI 522 Strategic Partnering with the C-Suite

Week Two Lecture Notes

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JWI 522 (1192) Page 2 of 6

ALIGNING HR TO MISSION, VALUES, AND STRATEGY

What It Means For HR to be an effective growth driver, its focus must be grounded in the Mission, Values, and Strategy of the organization. The HR department must not exist in its own world, emerging once a year to oversee annual performance reviews and compliance training. HR professionals must thoroughly understand the business and know why the company exists, how it makes money, and what its key strategic initiatives are. Why It Matters

• A lack of focus on mission-critical activities is going to keep the HR team marginalized from the “real business.”

• Aligning HR efforts to strategic plans is the only way to accurately measure the impact of talent development on the success of the organization.

• You can’t get every brain in the game if your team doesn’t really understand what the business is doing and why they come to work every day.

“Great teams are made when every single member knows where they’re going and will do anything to get there.”

Patty McCord

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THE IMPORTANCE OF MISSION AND VALUES IN BUILDING A HIGH-PERFORMING ORGANIZATION

HR must be deeply engaged in the Mission and Values of the organization. This is non-negotiable for anyone in a leadership position. For the Chief Human Resources Officer, these factors must be the North Star for all decisions and actions around hiring, firing, compensating, and developing people. While just about every organization has some sort of a Mission and Values statement, many times these become little more than nice words inscribed on a plaque in the lobby or printed in the opening pages of the annual report. Your company may be one of these, or you may be fortunate enough to work for an organization where the fire of the Mission still burns brightly and is something that leaders speak about constantly and reinforce to everyone on the team, regardless of level. Patty McCord stresses:

“Employees at all levels want and need to understand not only the particular work they are assigned and their team’s mission, but also the larger story of the way the business works, the challenges the company faces, and the competitive landscape.” “Truly understanding how the business works is the most valuable learning, more productive and appealing than ‘employee development’ trainings. It’s the rocket fuel of high performance and lifelong learning.”

Powerful, P. 28

In other courses at JWMI, you have explored the qualities of good Mission and Values statements. We won’t go into the details of these here, but if you need a refresher, you are encouraged to reread Winning, and/or review your course materials from Leadership in the 21st Century. In summary, however, we are reminded that:

• Mission is where the company is going. It speaks to its very reason for existence, and clearly states what everyone in the organization should be working to achieve. A good mission statement is both aspirational and attainable. It’s not fluffy and filled with platitudes that may sound nice, but lack substance.

• Values can be best thought of as how the mission can be achieved. Put another way, if Mission is where we’re going, Values are how we’re going to get there. Because of this, Jack actually prefers to use the term “Behaviors,” because it focuses more on observable actions, not states of mind. It is about what you should see when you see people “doing it right.”

A focus on Mission and Values (Behaviors) is especially critical in HR, because any disconnect between the guiding principles of the business and the practices of talent management will undermine the competitive strength of the business. It will also keep HR in a service role, rather than a leadership role as a strategic driver of the organization’s success.

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Jack has said that leaders must talk about the Mission and Values until they’re sick of hearing themselves. This advice isn’t just about reinforcing a mental state. If you build this focus into your daily language, it directs you to constantly ask how your team’s Behaviors take the organization forward. The impact of this is twofold:

1. It forces you to more thoroughly assess an idea or initiative before you undertake it, and evaluate current HR practices through clear and focused criteria.

2. It helps you explain the impact of those actions to others outside HR, using terms that are consistent with what the organization and the CEO see as being most important.

THE RELATIONSHIP BETWEEN STRATEGIC DIRECTION

AND TALENT MANAGEMENT McCord points out a shortcoming that is all too common in organizations:

“It’s ironic how little information about strategy, operations, and results is generally shared with employees throughout the organization. After all, public companies share that information with the whole world these days. Why should the investors on earnings calls know more about what’s happening in your business than most of the people working in it? I think it would be great if companies held the equivalent of an earnings call for all employees. In fact, why not have them listen to the actual earnings calls?”

Powerful, P. 23 The need for alignment between the organization’s strategic initiatives and its talent management practices is typically more obvious in times of significant change, such as during a merger, restructuring, or the opening of a new division. Your colleagues are more focused on the importance of HR and on asking all the right questions, such as:

• What strategy is the company pursuing to beat its competitors? • How will this change the business over the next 3 to 5 years? • What sorts of people do we need on the team to execute the strategy?

However, it’s often more difficult for HR leaders to maintain this focus around the small stuff. We all slip into the routines of the deadlines and deliverables tied to our daily tasks, and it’s easy for the minutiae to obscure the big picture. HR leaders must work to ensure that the areas where their teams spend time advance the Mission and are aligned to the Strategy. In fact, Conaty and Charan advocate that there should be no distinction between talent development and strategy development, and that we should, “Use business reviews as people reviews and vice versa.” (The Talent Masters, p. 269)

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JWI 522 (1192) Page 5 of 6

We want to be clear, however, that every HR team has operational necessities it has to attend to, and that a focus on strategy cannot come at the expense of keeping the machine running smoothly. Jack likes to use the expression “eating and dreaming” to characterize how organizations need to look ahead at what could be without losing sight of what has to be done today. The role of the CHRO and senior HR executives seeking a seat at the table is to manage this balance and ensure a proactive alignment between HR activities and strategy. This is no easy task, and is one of the reasons that some experts like Ram Charan (and even Jack himself) advocate splitting HR into two functions: one to manage the operational elements, and one to drive the talent management strategy. Whether or not such a division of duties is the right approach for all organizations is open to debate. We encourage you to explore the idea and the arguments on the matter presented in our weekly readings and beyond. But regardless of the structure, the outcome must be the same: clarity and alignment across the entire organization around why we do what we do. McCord argues for the following:

“How do you know when people are well enough informed? Here’s my measure. If you stop an employee, at any level of the company, in the break room or the elevator and ask what are the five most important things the company is working on over the next six months, that person should be able to tell you, rapid fire, one, two, three, four, five, ideally using the same words you’ve used in your communications to the staff and, if they’re really good, in the same order. If not, the heartbeat isn’t strong enough yet.”

Powerful, P. 27

LEADERSHIP DEVELOPMENT One cannot discuss Mission, Values, and Strategy without addressing the importance of developing the next generation of leaders. Leadership development was arguably the single most important task for HR at GE under Bill and Jack. This wasn’t only about ensuring a smooth transition when a leader left suddenly, retired, or was promoted. It was about developing a clear and ever-evolving picture of the performance and behaviors needed to drive continued growth. A clear strategy is essential for the organization’s success, but the strategy alone won’t win the day. It’s the people that will drive the success of the strategy, not the other way around. Conaty and Charan stress the importance of this “people-before-strategy” approach:

“Strategy comes from the minds and cognitive makeup of people – their abilities to differentiate what matters, their understanding of trends in the external environment, their risk appetite, and their skill in modifying a strategy in the face of change. A strategy can only succeed when the right people conceive and execute it.

The Talent Masters, P. 50

This position is echoed by Jack himself, who writes: “Any strategy, no matter how smart, is dead on arrival unless a company brings it to life with people – the right people.” (Winning, P. 181)

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JWI 522 (1192) Page 6 of 6

GETTING THE MOST OUT OF THIS WEEK’S CLASS

As you read the materials and participate in class activities, stay focused on the key learning outcomes for the week:

• Discover the importance of Mission and Values in building a high-performing team Think about what this means for you and your team. How much does the Mission of the organization drive the actions of the HR team? In what ways can a focus on Mission help you direct your energies on what is essential to the company’s success, and cut down on the activities that are distractions? As you think about Values, how do your behaviors, and those of your team, demonstrate the Values of the organization? Are the desired behaviors identified and leveraged throughout the organization to build a culture that is aligned and focused on winning? If not, what can the HR team do to change that?

• Explain the relationship between strategic direction and talent management

Is your HR team sufficiently focused on the strategy of the business to drive the talent development and succession planning initiatives needed to prepare the company for its future personnel needs? Or is your team largely a reactive service group that is only called upon when there is a problem to be fixed? If the CEO stopped you in the hall today and asked you to explain how HR supports the strategy of the organization, how would you respond? When decisions must be made around promotions, layoffs, and talent development, can HR guide these decisions in ways that support the Mission and Values that are critical to winning?

• Explore the importance of effective HR leadership in strategy execution Reflect on the interactions that take place between HR and business managers in your organization. Do you meet together regularly to discuss how the business is doing and whether the people on the team are performing in ways that drive the company’s success? How well do you really understand what the business does on a day-to-day basis? What can you do to better align how the business operates and what your team can do to further its success? How can you support business leaders in providing performance feedback tools that clearly connect what the team does with how the business wins?