2 - People: HR Strategic Planning Flashcards
Strategy
- A long-range plan of action-oriented to achieving defined goals.
- Created and refined through a strategic planning process.
- Implemented through strategic management.
Levels of Strategy
- Strategic planning is repeated at each level with increasing focus and specificity
- Business unit and operational strategies are closely aligned with the organizational strategy to better support its implementation
Critical Success Factors
- Alignment of effort
- Control of drift
- Focus on core competencies
Strategic Planning and Management Process
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Evaluation
- Evaluate results continually and at designated intervals
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Formulation
- Gather and analyze information
- Determine current position
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Development
- Identify goals and tactics to frame strategic plan
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Implementation
- Provide clear communication, coordination and support
- Control resources
Formulation Strategy
Deepening one’s understanding of the organization and its internal and external environments and opportunities and challenges
- Information gathering and analysis
Systems Theory
Strategic planning and management requires systems thinking. The challenge is to coordinate interacting and sometimes interdependent parts to achieve strategic goals.
Input-Process-Output (IPO) Model
Inputs can include internal and external constraints as well as organizational resources and external conditions. All of these inputs can affect the outcome.
Environmental Scanning
Systematic survey and interpretation of relevant internal and external data to:
- Identify external threats and opportunities.
- Strengthen strategic plans and goals.
PESTLE Analysis
Environmental Scanning
- Systematic search for environmental forces organized under specific categories.
- PESTLE can be used for the entire enterprise, for individual units or functions, or for specific activities.
Political
Economic
Social
Technological
Legal
Environmental
PESTLE Process
SWOT Analysis
- Uses data to assess strategic capabilities in comparison to threats and opportunities identified during environmental scanning.
- Can be performed for organizations, functions, initiatives.
- Can be applied to specific HR activities.
Growth-Share Matrix
Uses data to find where the greatest value in the organization resides:
- Stars—high value
- Cash cows—create value reliably but with little opportunity for growth
- Dogs—consume resources without offering strong value or future growth
- Question marks—could be winners or losers
Mission
- What the organization/function intends to pursue and its charted management course
- Provides focus and purpose of strategy
Vision
- What the organization/function aspires to become in the future
- Provides motivation and unity
Values
- What beliefs the organization/function supports through behaviors and actions
- Provides guidepost for decision making
Setting Goals
General goals suggest how the organization will focus its resources.
- Starts with moving the organization and people in the intended direction
- Example: Increase productivity
Organizational goal-setting process must be repeated on unit or functional level
- Creates a line of sight from the organization’s strategic coals to the goals and objectives of the organization’s functions and units.
- Example for HR: Improve quality and efficiency of talent supply chain
Value Drivers
HR Strategic Goals
The actions, processes, or results needed to deliver a desired value.
Balanced Scorecards
Identify key performance indicators (KPI) and make sure that the objectives used to measure performance are aligned to various sources of value to the organization and are balanced
Provide a more strategy-focused, balanced, multi-perspective assessment of performance
- Finance: budget (control OT)
- Customers: provide quality goods and services and satisfy its customer
- Internal Business Processes: results that lead to success & satisfied customers (talent, retention, development)
- Learning & Growth: prepare for the future
Lagging Indicators
Balanced Scorecards
Describes effects that have already occurred and cannot be changed.
- Turnover rate indicates the success or lack of success in employee engagement.
Leading Indicators
Balanced Scorecards
Describes predictive actions that can change future performance and help achieve success.
- Employee satisfaction indicates future retention rates and associated costs of hiring.
SMARTER Performance Objectives
- Specific - narrowly defined
- Measurable
- Attainable - within reach
- Relevant - in light of sight with the goal
- Timebound - reasonable & defined time
- Evaluated - assessed continuously
- Revised - changed based on what has been learned
Benchmarking Process
- Define KPIs
- Measure current performance
- Identify appropriate benchmarks and data
- Identify performance gaps
- Set objectives and implement support activities
Developing Strategy
- How do we get to the future we have envisioned?
- What strategy or strategies have “fit”?
Strategic Fit
- Describes the consistency of strategy with internal and external environments.
- Reflects interconnectedness and alignment of activities throughout the organization
- Resources and capabilities deployed toward strategic goals
- Strategic fit exists when activities:
- Are consistent with the strategy.
- Interact with and reinforce each other.
- Are “optimized” to reach the strategic goal.
Creating Competitive Advantage
- External Changes: Compete by adapting quickly to changes in the external environment
- Internal Changes: Compete through change, innovation and reinvention
Porter’s Competitive Strategies
Impact of Business Strategy on HR
HR strategy can influence a primary lever of organizational strategy—employees:
- Talent management
- Workforce planning
- Compensation
- Employee engagement
- Organizational effectiveness
- Diversity and inclusion
Growth Strategy Options
Each strategy requires different levels of investment and offers different levels of control and return.
- Strategic alliance
- Joint venture
- Equity partnership
- Merger/acquisition
- Franchising
- Licensing
- Contract manufacturing
- Management contract
- Turnkey operation
- Greenfield operation
- Brownfield operation
HR Involvement in Growth Strategies
- Greenfield operations will require involvement in HR areas of risk analysis, staffing, working with local authorities, and implementing HR policies and procedures in the new operations.
- Policies and procedures may require adjustment to meet local laws, business practices, and culture.
- Even when little integration is required, HR may be asked to audit workplace practices.
HR’s Role in Divestiture Strategy
Implementing Strategy
- Translates strategic intent into specific plans of action.
- Requires communicating the value of the strategies to all members and effectively managing the implementation of plans.
Operational Budget
Funds ongoing activities required to provide HR services to internal customers
- Talent acquisition costs
- Compensation and benefits
Many items are variable and affected by organizational and HR strategies
Strategic Budget
Funds initiatives aligned with strategic goals (line of sight)
- Development of mentoring program
- Initiative to improve cultural alignment
Initiatives must compete for available resources and are funded according to strategic priorities.
Communication Strategy
Communication occurs in different ways and at different levels.
- Formal communication or team meetings
The communication plan should include ongoing opportunities for feedback.
Core Elements of Success
- Outward toward entire team
- Inward toward leaders
- Leadership support
- Free flow of information across organizational boundaries
- Helping team members see how their work connects to the strategy
Managing Strategic Initiatives
HR action plans are implemented through normal operations and through specific initiatives managed as time-limited projects.
Projects can vary in complexity. Some require dedicated project managers.
- Multiple phases
- Simple or complex deliverables
- Large or small budgets
Project Stages
- Planning
- Executing
- Closing
Planning
Project Stage
- Working with stakeholders
- Defining deliverables
- Scheduling: critical path analysis, Gantt charts
- Assembling team
Executing
Project Stage
- Communication
- Leadership
- Removing obstacles
- Managing stakeholders
- Monitoring and controlling
Closing
Project Stage
- Assessment and evaluation
- Team debriefing
- Continuous improvement
- Continuous learning
Specialized Project Management Approaches
- Lean
- Six Sigma
- Agile
- Critical Chain
Evaluating Strategy
Essential for:
- Sound management
- Good governance
- Continuous improvement
Evaluating Strategic Results
Appears as the final phase of strategic management but is often a factor in the preceding stages.
Requires:
- Developing tools and establishing processes to collect data.
- Analyzing data in an ongoing manner.
- Investigating discrepancies between planned and actual.
Communicating Strategic Results
- Create a narrative that explains results.
- Visualize data analysis with tools such as bar charts and Pareto charts, trend diagrams, etc.
- Acknowledge disappointments as well as successes.
- Invite reactions and feedback.
- Describe next steps.
Strategic Planning
Process of setting goals and designing a path toward a competitive position
Strategic Management
Strategic Drift
Cost Leadership
Aim at capturing market share within their industry by virtue of lowest price
- IKEA
Differentiation
Charge a higher price by offering something different or the same thing in a different way from competitors
Strategic Alliance
Companies agree to share assets to accomplish a goal
- Technology or sales capabilities
Varying degree of tightness and formality
Some involve customers, partners or competitors
Joint Venture
Two or more companies invest together in forming a new company that is jointly owned
Equity Partnership
One firm acquires partial ownership through purchase of shares.
Agreements define issues as leadership and division or profits and loss
Merger/Acquisition
A firm purchases the assets of a local firm outright, resulting in expanding the acquiring company’s employee base and facilities.
Significant cultural, systems and management challenges.
Data privacy can be a big issue.
Franchising
A trademark, product or service is licensed for an initial fee and ongoing royalties.
Control over behavior is greater
- Fast-food
Licensing
Local firm is granted the rights to produce or sell a product.
Low risk entry
Avoid tariffs and quotas imposed on exports.
Little control over activities and results.
Contract Manufacturing
Arranges for local manufacturer to produce components or products as means of lowering labor costs.
Management Contract
Another company is brought in to manage and run the daily operations of a local business.
Turnkey Operation
An existing facility and its operations are acquired and run by the purchaser without major changes.
Greenfield Operation
Build a new location from the ground up.
Staff and equip the new location.
Brownfield Operation
The company repurposes, through expansion or redevelopment, an abandoned, closed, or underutilized industrial or commercial property.
