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Part 2: Jump-shifting HR's impact on business performance

Part 2: Jump-shifting HR's impact on business performance

Part 2 of 3: A laser-like focal point for transforming HR’s value to the business

As we’ve already seen, HR has a pivot-point opportunity to transform its contribution to meeting overall business needs. To make this happen two sets of priorities are on track to converge…

On the one hand, global CEOs are currently focusing on 4 top business priorities to deal with the business conditions and challenges over the next 3 years:

  1. Accelerate/sustain business growth
  2. Attract and develop human capital
  3. Enable innovation throughout the entire organization
  4. Focus relentlessly on customers

On the other hand, HR has 4 top strategic priorities for getting its job done:

  1. Develop leaders
  2. Engage employees
  3. Change the culture
  4. Re-design the organization

How these two sets of priorities converge and integrate will shape HR’s opportunity to jump-shift its role and impact as a strategic business partner.

Context is all-important, and global CEOs are defining a specific context for this convergence: large scale, transformative change must take place in virtually every facet of their companies in the coming years.  The New CEOs Guide to Transformation, from the Boston Consulting Group (BCG) in 2015, states: “We define a transformation as a profound change in a company’s strategy, business model, organization, culture, people, or processes… a fundamental reboot that enables a business to achieve a sustainable, quantum improvement in performance, altering the trajectory of its future.”

Taking all this into consideration, we ask: What is the single, most important, highest-priority driver of business success that HR could concentrate all its internal functions and priorities on – and thereby maximize its impact on the enterprise?

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As a starting point, if large scale transformative change is the necessity of the day, then HR is pressed to transform how it approaches all its internal functions, including leadership development, employee engagement, culture change, and organization design. This will require a mixture of breakthrough and incremental innovations throughout HR – something that we’ve observed is currently going on with HR in many corporations. Deloitte reports that 79% of the HR functions are beginning to use innovative “design thinking” to craft the employee experience as they manage, support and train people.

But that’s internal to HR: innovating how HR meets its functional priorities. The business mandate is much broader and bolder than that. HR must focus its HR strategy to serve the top CEO priorities by enabling all kinds of business-related innovation throughout the entire organization. That’s what HR is for.

And this is where we begin to see the light! The capacity for INNOVATION is absolutely central to the transformation that CEOs are looking for. Put another way… Being innovative is the fundamental competency for responding to key business challenges and addressing top strategic priorities for the business. The reports by BCG, the Conference Board, and KPMG, illuminate some of the specific targets for innovative solutions that can transform the top CEO priorities. For example…

To transform GROWTH, innovative solutions are needed for:

  1. Generating disruptive business models – and responding to competitor disruptions
  2. Collaborative growth through partnerships or other “open innovation” relationships
  3. Better measures of the impact and value of innovation, and key risks for stakeholders
  4. Trust-building, ethical accountability, and transparency as fundamental to growth

To transform HUMAN CAPITAL, innovative solutions are needed for:

  1. Attracting and developing new talent who are “ready and agile” – including Millennials
  2. Creating and managing new knowledge
  3. Revitalizing the organization design in terms of teams, not silos

To transform CUSTOMER CENTRICITY, innovative solutions are needed for:

  1. Co-innovating relevant, new products/services, with customer involvement
  2. Using technology to drive change in the way organizations interact with customers
  3. Meeting the ethical and “green” expectations of “good consumers”

Let’s keep going with the other CEO priorities brought out in the Conference Board and KPMG reports…

To transform OPERATIONAL EXCELLENCE, innovative solutions are needed for:

  1. Digitizing the entire value chain
  2. Increasing quality, efficiency, and productivity at all levels

To transform SUSTAINABILITY, innovative solutions are needed for:

  1. Developing new levels of relationship with all stakeholders, including activist shareholders
  2. Enhancing the portfolio of sustainable products and services

To transform the generation of DISRUPTIVE TECHNOLOGIES, innovative solutions are needed for:

  1. Keeping up with the newest technologies
  2. Improving the effectiveness of R&D

To transform MARKETING AND BRANDING, innovative solutions are needed for:

  1. Reshaping sales and marketing, while ensuring that sustainability is part of the brand
  2. Communicating transparently and digitally with customers, employees, and stakeholders

In short, HR’s mandate is to build the competencies that employees throughout the organization will need to innovate the what, why and how of their everyday work. This means putting the power, responsibility, knowledge and tools for innovation at the fingertips of every employee – with a common language and understanding, integrated productivity tools, and processes that can be used throughout the organization. This competency building is far more than just the behaviors and skills needed, it also includes the inner transformation and mindset shifts required to mobilize the entire workforce as a coherent innovative whole.

HR is in the unique position to make this kind of contribution, impact, and difference. HR knows how to look across the organization and connect dots as it develops policies and practices that work across functions and levels. HR’s talent development expertise knows how to develop the competencies needed across an organization to maintain industry leadership by innovating and operating well. HR’s organization development expertise knows about large scale engagement and change, and how to design systems that transform the organization. HR knows how to be broadminded and focus on the good of the whole as it exercises its duties to the organization. HR understands the role that “inner transformation” plays when evolving a culture.

With expanded influence and responsibility for enabling innovation, HR can make its maximum contribution to meeting the innovation challenges that will determine the organization’s future.

So… How does HR go about playing this transformative role through a focus on innovation? Let’s explore that in Part 3: Integrating HR and CEO priorities in a coherent framework

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William Miller's picture
About the author

William C. Miller, co-founder of Values Centered Innovation, is passionate about integrating emotional intelligence, human values, and mental discipline with our innate capabilities to be innovative.