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Bet on People Before Strategy

6 ways HR can help business-line leaders overcome common pitfalls and confront current business challenges



Monday 18 July 2016



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In an increasingly global and digital economy, finding and developing the best talent has become a determining factor in a company’s survival and success.

Human resources professionals are vital to navigating the way forward, helping management teams understand the interplay between HR practice and strategy. My own experience is that strategy is nothing without people to drive it. That may be self-evident to HR professionals but, as an HR non-professional myself, I will attest it’s not second nature to many business-line leaders.  HR professionals have an increasingly critical role to play in helping business-line leaders overcome common pitfalls and confront current business challenges. Here are six I would highlight, drawn from my own experience and my vantage point on emerging trends.

 

You need to listen before you can lead

A year into my first management job, half my group was doing well. The other half was floundering. The problem seemed clear: half my group were low performers.

What I discovered was that I was most of the problem. I did not understand what half my group expected. I had got my job the usual way; not because I had proven myself good at managing people, but because I was good at solving problems. I led by example.

When I finally listened to them, I discovered not everyone was like me; members of my group had different interests, talents and ways of communicating. I don’t think my experience is unique. The takeaway for HR is to invest in an excellent first-level management training program and make it mandatory.

 

A leader’s job is mostly people

As COO of the Bank of Canada, I always seemed to have a couple of key positions to fill that I felt were distracting me from what I was “supposed” to be doing: driving strategy and operations. It took me two years to figure out that if you have 20 senior positions and 10 per cent turnover, you will always be looking to fill two positions. Finding and developing the best people is “the job.” HR leaders need to push senior managers to embrace this as their priority.

 

Diversity is not a problem to be solved; it’s a perpetual challenge

By now we all know decisions are superior and strategies more robust with a diverse team and we have made real progress, especially on gender diversity.  But when I told the Bank of Canada’s HR director how thrilled I was that we had finally achieved gender balance at the senior table, she showed me our succession plans. Despite having lots of women at the executive level, one level down, the cupboard was bare. The strong women had been promoted. Though we had many amazing women at more junior levels, the middle ranks were thin.  We still had work to do. 

 

Never waste a good HR crisis

HR crises come in many forms. The HR team’s role is to remind C-suite members to look at them as opportunities. When a mission critical person is suddenly out of commission, who is ready for a stretch assignment? When faced with a rash of senior retirements, see the opportunity to re-organize and align the structure of the senior team with where you want to take the organization. And when dealing with a messy issue of gender or racial bias, it’s time to reinforce the importance of your core values of respect and diversity.  So long as you are prepared – with plans, processes and a readiness to execute them – these “disasters” are opportunities in disguise.

 

Culture Matters

Culture is sometimes described as influencing “what we do when nobody is looking.” This is a soft skill and hard to measure. But the evidence is mounting that culture matters for performance. Mounting conduct fines have impaired the profitability of many global banks, and beyond finance, Volkswagen is the latest corporate giant to face the fallout of ethical failures. At the positive end of the spectrum, there is also evidence from employee surveys that companies where employees rate the integrity of senior executives highly are more productive, more profitable and better able to attract talent. 

When it comes to embedding a culture of integrity into our organizations, there are three key lessons:

  • Be clear about your values, and talk about them
  • Increase people’s attention to the standards of honesty and integrity
  • Walk the talk

While most people know what’s right and what’s not, humans are also masters at rationalizing their behaviour with excuses like “everybody is doing it” or “this won’t hurt anybody.” But recent research at Rotman and elsewhere suggests that by making the moral dimensions of decisions more explicit, we can make rationalization more difficult and increase the likelihood that employees will make morally correct decisions.

 

Disruptive innovation is not going away

The implications for HR are profound. If change is coming more quickly, companies need to hire less for specific roles and skills, and place more emphasis on behaviours like initiative, adaptability, and resilience. How do we assess these? If companies are going to have to disrupt themselves or be disrupted, how can we foster loyalty and provide enough stability so people can still do their best work? And how can we nurture a culture of entrepreneurialism while still maintaining standards and security?

These are tall orders, but companies thriving in this environment are those that have thought deeply about HR as a key element in their winning strategy – Google is a prominent example.  In an increasingly winners-take-all market place, the best talent is more imperative than ever at the same time as “best” is being redefined. HR practitioners need to be creative and leverage their know-how to attract, keep and develop the talent.

There has never been a more exciting time to be an HR professional.

Tiff Macklem is Dean of the University of Toronto’s Rotman School of Management and former Senior Deputy Governor of the Bank of Canada. His article is based on remarks first delivered to the CHRO Leadership Summit in Toronto last December.


Rotman School of Management is Canada’s top business school and has Canada’s largest group of management faculty. It is home to some of the most innovative research institutes in the world





 
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