Recently nearly every HR professional I talk to wants to discuss how HR can be more strategic. That’s fine, I agree. We need to focus on being strategic. However, as the conversation progresses I often find that many seem to confuse strategic for proactive. Now, don’t get me wrong – as a profession we need to be proactive rather than reactive. But there is a significant difference between proactive and strategic. The root of the problem is failing to distinguish between organizational effectiveness (being proactive and addressing needs) and strategy (competitive advantage).
A recent example was at a networking event where a colleague was talking about being “strategic in OH&S.” The intent was to be proactive, and highly effective in the organizations approach to OH&S, but for most industries OH&S isn’t (and won’t ever be) a strategic differentiator. Unless a great OH&S program can reduce your WCB claims enough to undercut your competition, or is key attractor to your ideal candidates it won’t be a strategic advantage.
Michael Porter helps define these two concepts in his Harvard Business Review – What is Strategy article:
- Organizational Effectiveness – Performing similar activities better than competitors
- Strategic Positioning – doing activities differently than your competitors
So, as an HR professional who wants to demonstrate the value of HR, don’t mistake what is “strategic” for what is merely proactive. Every time we discuss being proactive but call it strategic we lose credibility. All functional units can be proactive, and they wouldn’t discuss it as strategic.
Some questions to help you assess whether a practice is a strategic advantage:
- Does this add-value to our goal?
- Does this service have a high impact on performance?
- Does this set us apart from our competitors?
- Who are our most satisfied customers, and is this practice a major reason?
So, before you start talking about strategic HR, think about it. Is it organizational effectiveness (best practice) or a strategic position – a competitive advantage that sets you apart from other organizations. All organizations need both to be successful, but knowing the different between strategic initiatives and organizational effectiveness is key to finally becoming a strategic function.
Organizational Effectiveness: Reactive to Proactive / Efficiency (Employee Engagement, )
Strategic: Unique / Differentiates you from your competitors (Employment Value Proposition, Recruitment)
Hopefully later this week I will put together a list of HR functional areas, and their potential to be strategic. Feel free to let me know what you feel about how HR can move to be more strategic or effective.
Tyler Totman
twitter: @FAPhoenix