Healthy Organizations Align Business Goals with Human Resources Management (HRM)

A healthy organization is one that is effectively run across functional departments, to rally around and deliver on its business strategies, goals, and policies in an innovative, sustainable, and regenerative manner. The ability to successfully align organizational plans, strategies, goals, and practices with HRM has a direct impact on the health of an organization. Indeed, HR cannot function and be a true value driver within an organization without the full cooperation of other functional departments of the organization, the Board, and the CEO.

Formulating a Vision of Aligning Business Goals with HRM:

To successfully align business strategy, goals, and practices with HRM, it is important to understand, at the outset, what those strategies, goals and policies are. They can run the gamut from exploring a company’s strategic alternatives including acquisition, merger, reorganization, restructuring, to the expansion of a unit, contraction, or consolidation.

Understanding the business strategy entails that the company and HR are familiar with the current realities of the company. They must grasp and articulate the internal strengths and weakness of the company as well as the external threats and opportunities including economic, social, or political conditions impacting the organization to craft a vision for the organization. A well-crafted vision must have a core ideology and an envisioned future (see “Building Your Company’s Vision” by Jim Collins and Jerry I. Porras).

It is imperative that the CHRO has a seat at the table during the crafting of the vision, objectives, and policies. Conjunctively, HR should also understand how the company defines success by clearly articulating its key performance indicators. Thus, the CHRO must be close allies with the CFO and CEO to keep retooling, where necessary, based on data. Afterall, the CFO directs funding, and the CEO is ultimately responsible for the health of the organization. A supportive leadership is essential to crafting this vision as it must be ever so tangibly woven into the organizational culture. Leadership must embody this vision and lead by example. Without sufficient clarity as to this support, there will be no quantifiable enthusiasm and sabotage becomes inevitable. A well-crafted vision is also nothing if there is no buy-in by leadership.

Implementation of the Vision of Alignment

Having formulated a clear vision, it is now up to HR to plan and implement an architecture of governance, talent and change management, policies, and practices that will help it develop the proper competencies, performance framework and behaviors to accomplish these goals. HR will use its tools to attract, recruit, train and retain the proper talents, match compensation to talent and roles, implement employment laws that compliment those organizational objectives, and make sure that employee relations, safety and security are aligned with those objectives.

HR should put systems in place, including a performance management system, to track return on people investments. Armed with analytics and robust data it can determine if its policies and practices are working in employee engagement, job satisfaction, retention, turnover, competencies, and behaviors in each position. Are people well paid? Does a position or role require different competencies? Is this manager just paying lip service to the end goal? Are the right people being groomed for the right succession roles? Are working conditions being maximized for value and innovation? How is HR continually renewing and adding value to this process? Where are the bottlenecks? In this way, HR is an agent for a continuous transformation, sustainability, and stability of an organization. The February 1998 Dave Ulrich article, “A New Mandate for Human Resources” is particularly instructive.

HR must be nimble enough to change course where data mandates. This means that beyond the HR metrics, the organization must implement a system of organizational health assessment to track and evaluate the results of its strategic goals, objectives, and policies. Leaders tend to paint a rosier picture of an organizational performance, thus, having full panoply of tools that track how well the organization is integrating its functions is invaluable in assessing the success or lack thereof of the alignment from the point of view of the outsider, the employee, the board, the functional departments, the CEO, and customers. Such metrics include direction, innovation, leadership, talent capabilities, motivation, accountability, external orientation, coordination, work environment and control. See, September 7, 2017, McKinsey Quarterly article “Organizational health A fast track to performance improvement.”

Barriers That Impede Alignment

Barriers that impede the alignment of business strategies, goals, and policies, and goals with HRM include not understanding the nature of obstacles and removing those obstacles that stand in the way of such alignment. Some opposition can be vocal, while others can be silent but equally destructive. Take the opposition seriously. You do not want a fox in a hen house. It is a waste of resources and time to attempt to convince or convert staunch opposition. Once you have determined the opposition is baked in there are two options, viz: let them go or move them to another department more suitable for them. Take some time to mobilize commitment to the vision. Have like-minded people in key strategic roles and build on their success. HR must thus move in lockstep with the company and must prioritize its talent management to match the priorities as set by the company.

Ineffective communication is another barrier to a successful alignment of company’s strategies, goals, and policies with HRM. In this regard, it is imperative that no silos exist when it comes to communication, free flow of information and knowledge. The mission and vision of the company as well as HR’s plans should be clearly articulated, easily disseminated and digestible. If no one understands the end goal, there will be cross currents and integration will not be sustainable. The erstwhile segregation of knowledge, information, and tasks as “this is HR” or “this is finance,” should no longer hold. The entity should be seen as one cohesive unit. Organizations should incentivize the sharing of knowledge, as it may be key to unlocking solutions to bottlenecks.

The actual nature of an organizational strategy can be an impediment to a successful alignment with HRM, because of the way some of the strategies are viewed and supported vis-à-vis HRM. There are two generic organizational strategies, namely: cost-based strategy and innovation-based strategy. (Acar & Zehir, 2010 “The harmonized effects of generic strategies and business capabilities on business performance”) Those developing a cost-based strategy are looking for a competitive advantage through economies of scale, while those that are innovation focused are in constant search for new technologies, products, services, and markets. The latter version has a healthy risk appetite. (Miles & Snow, 1978 “Organizational strategy, structure, and process”). It is easy to see which gets more attention, funding, and support from the organization. It should not matter for a successful HRM alignment which orientation the company is tilted towards. The strategic role of HR should be the same, consistent, long term, sustainable, stable yet flexible, renewable talent management that should be seen as a partner and a capacity builder to the overall growth and success of a company.

Inflexibility and Failure of Strategic Planning

Inflexibility and failure to plan for contingencies will derail any alignment of core objectives with HRM. Surprises are inevitable. Some organizational efforts may require more fundamental changes than others. A pupa to butterfly change is fundamental, for instance. In other words, you can’t undo the change. For these sorts of organizational objectives, failure to follow a carefully mapped out step by step plan that stacks on each other will be detrimental to a sustainable integration. (See John P. Kotter, “Leading Change – Why Transformation Efforts fail” p.3). There must be a steady hand at the helm, but there must be planning for unintended outcomes or conditions. Thus, at the first sign of an economic shock, the response should not be a reactionary cost-cutting measure. There should be plans in place to deal with such contingencies well in advance.

Further, HR must dispense with antiquated practices that do not add value. HR must prioritize critical roles and give them the architectural support they need to succeed. Let’s say that an organization has 7 critical roles that bring in 75% of the value and the rest are valuable but supportive of those 7 key roles. It becomes important to make sure that the right talents, talent development, and succession plans are put in place for those critical roles. Some of these roles may lend themselves to competencies and behaviors not previously present in those skills, HR must adapt in being flexible to reflect realities in how talent is hired, developed, and put into those roles so that they are primed for success.

Mission Must Be Achievable

Finally, setting an impossible mission will impede any alignment of organizational strategy goals and policies with HRM. What is being proposed and planned must closely match what the employees are hired for and what the organization exists for. You cannot put a square peg into a round hole. This is not to say that difficulties should not be foreseen, however, the organization must not embark on a fool’s errand. Indeed, it should be clear that any directional change is inherently perilous. However, the vision and strategies must be well communicated and understood by the actors involved. So, the tasks must be capable of being accomplished. Results should be quantifiable so that small wins can be celebrated and stacked on top of each other. Success, even a small one, is energizing and begets more success, while failure is depressive. Further, what is being planned and launched cannot be too large in scale as to make success elusive (see “Successful Change Programs Begin with Results, by Robert H. Schaffer and Harvey A. Thomson”).