I was talking to an HR leader recently, and the topic of strategy came up. “While you speak to the strategic business priorities and run strategic programs, does your HR department have a strategy?” I asked. “We are a supporting function. We have a plan. We don’t need a strategy,” they said.

[My ears perked up… Curiosity piqued…]

A survey from Deloitte’s 2023 Global Human Capital Trends indicates that 87% of business leaders believe developing the right workplace model is crucial, yet only 24% feel their organizations are well-prepared to address this. A quick Google search for ‘What do people think of HR?’ reveals a surprisingly mixed perception…

Getting back to the HR leader.

Interviews revealed that business stakeholders didn’t understand the department’s functions or the value it added beyond standard compliance checks and balances. The HR team was also exhausted from delivering one program after another.

Not very strategic.

[Gears turning]

In this actionable insight, we’ll explore the 5Ws of strategy and how you can incorporate strategy to go from a supporting function to a winning HR team.

The common misconception of strategy is that it’s a long-term plan or a set of tactics / short-term actions when in fact:

Strategy is a set of choices that articulate where and how you will win with your customers and against your competition. (Inspired by R.L. Martin)

Example:

Walmart Business: We will be the #1 retailer in North America by offering a wide range of products at everyday low prices to all customers. We win with customers by making shopping convenient and affordable. We win against other retailers with our unmatched logistics, scale, and investment in technology.

Walmart HR: We will enable Walmart’s goal of being the #1 retailer in North America by building a diverse, skilled, and motivated workforce. We win with employees by offering competitive wages, comprehensive benefits, and opportunities for career advancement. We win with business units by providing tailored HR solutions and strategic workforce planning. We win against external service providers with our scalable, integrated HR functions and in-house expertise.

We all live in a world of limited time and resources. We can’t spread ourselves thin trying to be everything to everyone. Certainly this applies to HR with their small teams serving thousands if not tens of thousands of employees. This means businesses and functional groups must be intentional about where they choose (and choose not) to invest.

Example:

Walmart Business: Chooses to focus on a wide selection of consumer goods so that price-sensitive customers can get anything they need. They choose not to focus on limited items in bulk (like Costco) or be everything to everyone (like Sears).

Walmart HR: Chooses more costly, in-house HR management to meet the specific and complex business unit needs over cheaper, one-size-fits-all outsourced solutions.

The traditional and dominant approach to strategy is top-down, where the executives and leaders are the mind (strategy) and the managers and front lines are the bodies (execution). As you can probably tell, we are proponents of at the very least key leadership and teams both driving the overall strategy and creating their own respective strategies in alignment.

So yes, HR, Marketing, Sales, Operations, Finance, IT, and even Strategy should have a strategy!

The easy answer: Once a year review to adjust and revise, with quarterly/semi-annual check-ins to see if you’re on track.

The harder answer: All the time. Everyone should be intentional about whether their individual choices are aligned with the business, organizational, and team-level choices.

Ok, you’ve piqued my interest. How might I try this in HR?

Check out Roger Martin’s Playing to Win Strategy Framework. It does a fantastic job of distilling strategy down into 5 simple yet powerful questions:

1. What is your winning aspiration?
2. Where will you play?
3. How will you win?
4. What capabilities?
5. What systems and measurement?

At a minimum focus on #3.

• What is your value to your internal customer?
• What is your advantage over competitors (e.g., consultants, headhunting companies) or alternatives (e.g., not doing it or doing it themselves)?

Reflect on these questions for yourself. Discuss with your team to see how aligned you are.

Examples:

Google

How will you win?

• Value to Internal Customer: A climate of innovation and continuous learning, providing employees with extensive benefits, and promoting work-life balance. Not cost-cutting measures at the expense of employee satisfaction and innovation.
• Advantage over Competitors: Extensive resources allow for significant investment in employee development and cutting-edge technologies, creating an environment where top talent thrives. Not ignoring the need for a supportive and engaging work environment, which could lead to high turnover to our competitors and reduced productivity.

Genentech

How will you win?

• Value to Internal Customer: Focusing on scientific excellence and innovation, providing employees with access to cutting-edge research tools and resources, and offering competitive benefits and opportunities for career advancement. Not on short-term financial metrics at the expense of long-term research projects and employee development.
• Advantage over Competitors: Leveraging a strong reputation in the biotech industry, extensive R&D capabilities, and strategic partnerships to attract top talent and accelerate the development of breakthrough therapies. Not choosing a “figure-it-out yourself” and bureaucratic work environment, leading to high turnover rates among key scientific personnel and a decline in innovative output.

The goal of every leader is to ensure that the business is aligned and rowing in the same direction to deliver superior outcomes (i.e., winning).

As a vital function centered around the lifeblood of the organization—its people—it is imperative that HR should have a similarly winning mindset and its own set of choices on how it will win with leaders and employees to enable them to win with their customers.

Happy strategy-making!