Making strategic partnership a reality
| Published date | 01 March 2005 |
| Date | 01 March 2005 |
| Pages | 3-3 |
| DOI | https://doi.org/10.1108/14754390580000595 |
| Author | Edward E. Lawler |
| Subject Matter | HR & organizational behaviour |
3
Volume 4 Issue 3 March/April 2005
STRATEGIC COMMENTARY
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Thought leaders share their views on the HR profession and
its direction for the future
DEPARTMENTS AT A GLANCE
STRATEGIC COMMENTARY
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e-HR
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HOW TO…
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PRACTITIONER PROFILE
METRICS
HR AT WORK
REWARDS
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RESEARCH AND RESULTS
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,
,
F
or at least the last decade, virtually
every book, article and speech on
the future of the HR function has
emphasized the need for change. There
is an almost unanimous view that HR
can and should add more value to
organizations, and that the best way to
do this is by being more of a business
partner. In other words, it needs to
move beyond administrative tasks to
adding value through directly improving
the performance of the business.
There’s also widespread agreement
that HR can do this through effective
talent management, helping with
change management, influencing
business strategy, and a host of other
high value-added activities that impact
organizational effectiveness.
HR as a business
So what should HR do? A useful way to
analyze the HR function is to think of it
as a business. HR in most corporations
has many of the characteristics of a
business. It has competitors, products
and costs. It also has customers who
need a variety of services.
Thinking of HR as a business leads
immediately to the critical question,
What products should it offer?
Potentially, I believe it can offer three
product lines. The first is the traditional
administration-centered one it has
offered for decades. The other two,
business partner and strategic partner,
are newer and the ones that HR seems
to have most trouble delivering. In some
corporations it delivers on the business
partner role, but rarely does it deliver on
the strategic partner role.
Building strategic capability
The strategic partner product line is the
one that has the potential to add most
value. It has rapidly increased in
importance because of the growing
importance of intangibles and human
capital. Basically, this product line needs
to include input to business strategy and
analysis of strategic readiness and
strategy implementation.
In order to deliver the strategy
product line, HR needs individuals who
can interact with senior executives
concerning the development and
implementation of strategy. HR
professionals at the corporate level need
to be focused on strategy and
organizational effectiveness with
expertise in business strategy,
organization design, organization
capability development, knowledge
management, HR analytics and metrics,
financial modeling, and utility analysis. In
short, HR should have a broad range of
analytic skills so it can evaluate different
strategic options and alternatives for the
business, assess how effectively the
current strategy is being implemented,
and develop recommendations about
how to improve the strategic position of
Edward E. Lawler III
is a world authority in human
resources strategy and systems.
He is director of the Center for
Effective Organizations at the University of Southern
California and has authored or co-authored over 30
books including Creating a Strategic Human
Resources Organization (Stanford Press,2003).
the organization and the
implementation of its current strategy.
Separating strategy and administration
Establishing a strategic capability isn’t
enough, HR needs to influence decisions.
One way to help ensure this happens is
to create an organizational effectiveness
unit that reports directly to the CEO.
Depending on the company, the VP of
HR might report to the CEO or to the VP
of organizational effectiveness. One
precedent for the latter approach are
the marketing and finance cases.
Marketing and finance have separated
themselves from sales and accounting by
their reporting relationships. They are
separate units that play a major role in
strategy formulation and development.
The transactional work in their areas is
done by the accounting function and the
sales function.
Following that pattern with respect
to HR would suggest that HR
administration activities would report in
at a lower level than organizational
effectiveness activities. This would
create a world in which HR is to
organizational effectiveness as
accounting is to finance, and as sales is
to marketing. Once and for all, it would
recognize the critical role that decisions
concerning the acquisition,
development and organization of
human capital play in determining the
effectiveness of organizations.
Making strategic
partnership a reality
Ed Lawler suggests HR follows the lead set by marketing and finance by
dividing its strategic and administrative work into separate functions.
© Melcrum Publishing Ltd. 2005. For more information, go to www.melcrum.com or e-mail info@melcrum.com
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