HR Role in Strategy Implemnetation

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HR’s Role in StrategyImplementation

Leading The Human Side of Change

By Richard McKnight, Ph.D.1

HR professionals have arrived at the strategy-creating table. This is good, but it is time for HR as a profession to

move past this objective. HR professionals have a unique set of perspectives and knowledge to bring to the strategy- creation table, but even more important is what they could bring to the strategy-implementation table. HR

professionals, often defensive about their comparative worth, need not apologize for not being financial, engineering,

marketing, or sales geniuses; they can—and should be—strategy implementation geniuses. This article sets forth a

framework for the work of strategy implementation, argues that HR professionals can and should take the lead, and

offers guidance for their doing so.

The marketplace has always punished companies that dawdle in manifesting the promise of their

strategic intentions. But today, those beatings come faster than ever. The good news is that the

basic work of strategy implementation—at least the human side of strategy implementation—is

knowable, and once known, it becomes clear that HR professionals can—and should be—its natural

leaders.

HR is pre-positioned to make exceptionally valuable contributions to the firm when it comes to

strategy implementation.

• HR has an organization-wide purview, i.e., unlike other corporate functions, HR is involved

in and generally understands the business in its entirety.

• Strategy implementation is inherently a human issue; HR by its very title has deep

responsibilities in this territory.• The skill set required for strategy implementation and the inclination to use it is more

concentrated in HR than anywhere else in the organization.

1 Richard McKnight is Vice President, Consulting for Right Management Consultants. He can be reached at 215-887-

8775 or via email at [email protected].

Right Management Consultants, Inc, © 2005 Page 1 All rights reserved.



The term “strategic HR” appears frequently in the HR literature. Articles and books that use this

term generally urge HR professionals to become more active in shaping strategy and more a partner

to line management in running the business. There is evidence to suggest that much movement hasbeen made in this direction, but there is also evidence that HR, as perceived by line management and

HR alike, is not moving fast enough or getting involved deeply enough in the organizational change

aspects of its role (Walker and Reif, 1999). Clearly, this has strategy implementation implications,

especially when strategy shifts. When strategies change, organizations have to change, and when

organizations have to change, people are making those changes.

For over 20-years, Right Management Consultants has supported HR professionals (as well as line

executives) in their quest to be “more relevant” to their organizations. Often, our HR clients have

sheepishly revealed a discomfort with respect to what strategy implementation consists of and how

organizational change takes place. In these circumstances, HR is vulnerable to fads that purport to

enhance the capability of the organization. Anyone who has knocked around the corporate world

for a long time (or even a short time!) has seen many HR-led programs launched with great fanfare

that have only the vaguest relationship to the strategy.

Lawler and Mohrman (2000) claim that “the HR function should be positioned and designed as a

strategic business partner that participates in both strategy formulation and implementation.” To

convey something of what the present article is about, we believe the word “participates” in this

statement should be changed to “leads.” In other words, in our view, the HR function should be

positioned as, yes, a partner, but a partner that participates in the strategy formulation process andleads—or at least is a key leader in—the overall implementation process.

This article puts forth a model of strategy implementation that can help HR professionals move

assertively and confidently into an arena where their contribution is sorely needed and likely to be

valued. The model is based on a set of conclusions drawn from 30 years of organization

development experience. These conclusions are corroborated by the recent research of Beer and

Eisenstat (2000) who found that there are steps that every organization needs to take in delivering

on its strategy, no matter the size of the organization, the content of its strategy, or how sweeping its

aims. Our model outlines how HR professionals—and anyone else, for that matter—can lead the

strategy implementation effort. It also offers a roadmap for aligning all HR activities—training anddevelopment, compensation and benefits, culture change efforts, competency programs, etc.—with

the strategic plan.




C O M M O N B A R R I E R S T O S T R A T E G Y I M P L E M E N T A T I O N

HR professionals who wish to become better at helping their organizations implement strategy

should first ask themselves what gets in the way of execution in their organization now. In part,

strategy implementation is a process of overcoming barriers to change.

On this subject, it is important to keep in mind that every strategy will face some degree of

opposition even when everyone in the company agrees that change is completely necessary. In fact,

the more a new strategy differs from the old one, the more resistance there will be. HR can

contribute significantly by helping the organization anticipate and address this resistance.

There are ten predictable barriers laying in wait to foil almost every strategic plan. They are listed in Table 1, “Barriers to Strategy Implementation.” The HR professional who wishes to be a strategy

implementation leader must know which ones are most operative in his/her organization. HR

professionals can initiate very useful conversations with line executives by asking these questions:

• “Which of these barriers are most likely to get in our way?”

• “What problems result when these barriers persist?”

• “What measurable business benefits would result from removing or diminishing these

barriers?”

• “Which do we absolutely have to address now?”

• “How might we in HR support you in addressing these barriers?”

Note that these barriers are grouped into five “Root Causes” of strategy implementation failure.




T A B L E 1 : B A R R I E R S T O S T R A T E G Y I M P L E M E N T A T I O N

Root Cause #1: LACK OF COORDINATION AT THE TOP

1. The lack of alignment among top executives blocks the cross-system collaboration the

strategy requires.

Root Cause #2: EMPLOYEES AREN’T ON-BOARD

2. Employees in the organization don’t understand the strategy.

3. Employees don’t feel personally responsible for fulfilling the strategy, perhaps because they

feel powerless to make a difference, perhaps because they’re cynical about management.

4. Employees don’t feel a sense of urgency to execute on the strategy.

5. Employees don’t feel inspired by the strategic goals.

Root Cause #3: INSUFFICIENT CHANGE AT THE WORK UNIT LEVEL

6. Managers are not refocusing the efforts of their work units to conform to the new strategy.

7. Managers operate in a way that kills employee enthusiasm about the strategy.

8. In mission-critical areas, work proceeds as usual even though the strategy requires

significant, rapid change.

Root Cause #4: INSUFFICIENT CROSS-FUNCTIONAL COLLABORATION

9. The new strategy calls for collaboration across operating and/or functional areas, but there

are no mechanisms in place to work through the competitiveness that exists between the

silos.

Root Cause #5: NO MEASUREMENT SYSTEM IN PLACE

10. The means of measuring progress towards change goals are inadequate or missing

altogether. In other words, there is no way to know exactly what’s changing and what isn’t,

especially in the “softer” human areas.

This list is consistent with a six “silent killers” of strategy found most frequently in the study by Beerand Eisenstat (2000) referenced earlier. Their term “silent killer,” borrowed from the language of

cardiology, is an apt one: just as undiagnosed high blood pressure can cause catastrophic heart

failure, these strategy impediments when unaddressed can annihilate strategy implementation

without anyone knowing what happened. In the organizations Beer and Eisenstat studied, these

were the “killers” most often discovered when strategy failure occurred:




1. An ineffective management team (12 of 12 cases)

2. Poor vertical communication (10 of 12 cases)

3.

Top-down or laissez-faire senior management style (9 of 12 cases)4. Unclear strategy and conflicting priorities (9 of 12 cases)

5. Poor coordination across functions, businesses, or borders (9 of 12 cases)

6. Inadequate down-the-line leadership skills and development (8 of 12 cases)

S T R A T E G Y I M P L E M E N T A T I O N I S P R I N C I P A L L Y A S O C I A L S Y S T E M I S S U E

With one possible exception (#4 on the Beer, Eisenstat list) these impediments are reflections of

difficulties or misalignments in the human system, not in technical or financial systems or flaws in

the strategy itself. This fact should be, at least in one sense, good news for HR professionals: wherethere is trouble in the human system, there are opportunities—and the need—for HR to show its

stuff.

Ultimately, successful strategy implementation requires getting three things right: the social system,

the technical system, and the business process system. (See pie chart below.) When making strategic

shifts in their organizations, most executive teams tend to do a better job of bringing business

processes into line with their new strategy and identifying the benefits of new technology, than

aligning the social system with the strategy. This is conspicuously evident in the widespread and

well-known failures of SAP and other technology installations,2 but this generalizes, too. David

Successful strategy implementation requires getting three things right

2 Nike recently sued a supply chain management software provider for business losses, claiming the vendor over-

promised the merits of the technology. The vendor claimed it was failure of people at Nike to provide needed

information. Added up, this sounds like a social system issue, not a technology issue.

20%

The RightTechnicalSystem

29%

The RightBusinessProcesses

51%

The RightSocial

System




Norton (in Becker, et al., 2001), co-creator with Robert Kaplan of the Balanced Scorecard concept,

observes that while human capital is the foundation for creating value in the new economy, human

assets are the least understood by most business leaders and therefore the least effectively managed.HR can help effect improvements in both technology and business processes by helping to break

down silos and enhance cross-company communication, top to bottom, side to side.

Notice the proportions in the pie chart, above. The “people issues” are huge, so big, in fact, that

they often overcome otherwise excellent efforts in the other domains. While these proportions are

not derived from scientific observations, our clients have repeatedly validated them. Frequently, we

hear it put this way: “You can get the best technology money can buy and you can identify the ideal

process ‘blueprint’ for your business, but it takes people to wring the value out of the software and

to align work with the vision. Without buy-in and cooperation, you’re sunk.”

The impediments to strategy implementation discussed above might be thought of as restraining

forces in a Force-Field analysis, a traditional organization development tool. Figure 1, “Jumping the

Strategy Gap,” below, depicts the strategy implementation process as one of jumping a gap of good

intentions. On the right in this graphic are depicted the forces that inhibit successful strategy

execution, on the left, those that support it. Note that, symbolically, strategy execution is depicted as

not only having to jump a gap, but also to jump up to a new, higher place. If the driving forces are

weaker or fewer than the restraining forces, strategy implementation fails. HR needs to help the

organization build up these forces.

Strategy Formulated

Strategy Executed

The

Bottomless

Pit of Good

Intentions

D r i v i n g F o r c e s o f S t r a t e g y

I m p l e m

e n t a t i o n

R e s t r a i n i n

g F o r c e s o f

S t r a t e g y I m p l e m e n t a t i o n

Right Management Consultants, Inc, © 2005 Page 6

Fig. 1: Jumping the Strategy Gap

All rights reserved.



S T R A T E G Y I M P L E M E N T A T I O N : W H E R E T O S T A R T

If one transforms the valence (from negative to positive) of the in-common elements of the

common barriers list and Beer and Eisenstat’s “killers,” one comes up with a useful, actionable list

of “To Do’s.” But, to be sure, addressing each of these tasks and managing them effectively is a

daunting task. No wonder effective execution is so uncommon. The good news is that each of these

“forces” represents opportunities for HR professionals to make a contribution—or even lead the

effort—with respect to strategy implementation.

In our experience, there are four essential tasks that all organizations need to accomplish. These

make up the basic work of strategy implementation. We call them the “Four Jobs of Strategy

Implementation.” They are listed in Table 3, on page 8.

Note that the Four Jobs concept is a systems model of change. It identifies the work that leaders

need to do in three arenas of an organization: individuals, work units, and larger organizational units

(departments, divisions, business lines). This is in contrast to much of the “strategic HR” literature,

which quite often focuses on what HR can do to attract and retain individuals , motivate and train

individuals , and enhance the capabilities of individuals . Strategy implementation requires change in all

levels of the social system: individuals, work units, cross-functional relationships, and, yes, HR

systems.

The work of strategy implementation does not always follow a predictable, linear path as might be

implied by the model above, beginning with Job 1 and going forward in lock-step fashion through to

Job 4. Still, Jobs 1 & 2 are foundational; without widespread understanding of the strategy, no one

can tell how to apportion their energies or set priorities.

Timothy Galpin (1998), wrote, “What really makes the difference between successful and

unsuccessful strategy deployment is the way management motivates and educates its people to act

on a business strategy.” While motivation and education are important, they are hardly the whole

story. Still, Galpin’s statement speaks both to Job 1 and Job 2—and the two are related. When

groups of employees fully understand the contents and the logic behind a strategic objective, they tend to feel a stirring inside to do something to achieve it—especially when they can see what’s in it

for them.




T A B L E 3 : T H E F O U R J O B S O F S T R A T E G Y I M P L E M E N T A T I O N

Job 1:

Ensure that employeesunderstand the strategy

Job 2:

Increase employeecommitment to the

strategy

Job 3:

Align local effortwith the strategy

Job 4:

Cause cross-systemrealignment

Employees need to

understand not only the

strategic direction, but also

the drivers of the strategy,the rationale behind the

strategy, and the metrics

associated with it. If

employees don’t

understand the game, they

don’t play it very well. A

rule of thumb: every

employee should

understand the strategy as

well as a well-informed

shareholder, probably

more.

Because strategic shifts

cause dislocations,

employees have to feel

impelled to go the extramile to fulfill the strategy,

turning it into reality.

Employees have to believe

that, overall, the net result,

despite the pain, will have

been worth the effort and

sacrifice they will have to

make in implementing it.

Although they are essential

and laudable

accomplishments, it is not

quite time for high-fives when the entire employee

population understands the

strategy and feels good

about it (Jobs 1 & 2). A

strategy calls for change in

actual work production. Job

3, then, calls for all off-

strategy work to cease and

on-strategy work either

begin or be continued.

Job 4 is where the

implementation magic

really starts to happen. Job

4 involves making systemicchanges needed to fulfill

the strategy. In most cases,

this means forging

improved relationships

across key organizational

units, e.g., sales and

manufacturing, or customer

service and distribution. It

can also mean changing the

compensation structure.

This is the most challenging

work because it requires the

“silos” to engage in give

and take, a practice most

functions in most

organizations know nothing

about.

Employees

informed

Employees

enlisted

Work units aligned

with strategy

Systemic

roadblocks

removed




For example, if employees learn about the fact that their company is losing 5,000 customers a

month, they will probably be motivated to take action to stem the tide. It is important in working

with executives to make sure that Job 2—the affective dimension—is not overlooked in favor of theprimarily cognitive concerns of Job 1. No amount of snazzy PowerPoint presentations will motivate

the typical employee to make the sacrifices that a break-phase strategy will require.

Peter Drucker once observed that all the talk about strategy has to, at some point, “devolve into

action.” This is the work of Job 3. If the work done at the local level doesn’t change, the strategy

won’t be fully implemented no matter what people understand and feel. Usually strategy

implementation requires changing not only what local work units do, but also how they go about it.

It’s hard to know how, for example, if reducing waste in a production area is the goal, how this can

be accomplished if the supervisors keep treating the line workers like brainless automatons. The

supervisors have to draw workers into the solutions creating process, an aspect of Job 3.

Unless we’re speaking of a strategy that is confined to a department, a function, or a single work

group, fulfilling it will doubtless require change in the way one or more organizational units work

together and what they accomplish. This is the essence of Job 4. When people speak of “breaking

down the silos,” this is what they’re referring to. New strategies almost always require change in

cross-system functioning, but it is utterly amazing how little is often done in organizations to make

these shifts, by HR or anyone else. In fairness, this is partly because it’s hard work.

Harder to Accomplish Easier to Accomplish

Job 1:

Ensure that

employees

understand the

strategy

Job 2:

Increase

employee

commitment to

the strategy

Job 3:

Align local effort

with the strategy

Job 4:

Cause cross-

system

realignment

Job 5:

Measure

progress/

redirect effort

HR Must Partner With Line to

Accomplish

HR Could Do on Its Own

Fig 2: Relationship of the Four Jobs of Strategy Implementation to HR

As one moves through the Jobs of strategy implementation, the work gets more and more difficult

(as in Figure 2, above), reaching a crescendo of difficulty with Job 4. To illustrate the point, imagine

the challenges involved if the new strategy calls for making the shop floor people in manufacturing




part of the sales team like some companies are exploring. What makes it more difficult? There are

several reasons:

• Theoretically, while HR could accomplish Jobs 1 & 2 without in any appreciable way

partnering with the line—and it practice, frequently tries to—it is inconceivable that it could

accomplish Job 3 or 4 without full partnership with the line organization. To influence how

work is done and what work is attempted, HR has to be let in the door. In other words, it

will have to have a willing client who wants the help.

• It is one thing get people to learn something; another to cause them to feel motivated to do

something with what they learned (Jobs 1 & 2). The organization is better off when both

occur. And traditionally, this has been an area in which HR has shined. But just because HR

can cause such shifts among employees entirely within its own sphere of influence, i.e., intraining rooms and new employee orientation sessions, does not mean it should do so

independently of line manager involvement which often happens.

• Another comment about Jobs 1 & 2: it is always a good thing when employees understand

the strategy (Job 1), but it is far more important that they apply what they’ve learned, i.e.,

Jobs 3 & 4. This is where traditional training often breaks down.

• Job 3 speaks not only to individual application but also to entire work units changing their

focus, their work habits and processes, or all three. Further, since most strategies require not

just one but many work units to make such shifts, Job 3 is a pretty daunting task. To

accomplish it well, HR must work intimately with line managers often in circumstances that

HR is not always familiar with, i.e., shop floors, selling environments, laboratories,

warehouses, and so forth.

W H O S E W O R K I S T H E F O U R J O B S ?

If doing Jobs 1-4 is the work of strategy implementation, whose work is it? HR’s? The line’s? Both?

HR will prove its worth as it helps the organization address each of these jobs, not to do them all.HR can and should do what it can where it can on its own initiative, but should forge the kind of

partnership with the line required to do the rest of this work. In other words, HR has to drive or

lead this effort.

Conversely, just because HR can do much of what is required by Jobs 1 & 2 doesn’t mean that the

line can or should be “off the hook.” The truth is, employees want to hear from, learn from, and be




inspired by line leaders far more than they want to hear and learn from HR. HR can create the

forums which bring employees together with managers and executives, and be leading while never in

the spotlight.

The senior management group most likely to succeed in implementing strategy will, at minimum:

1. Have a common understanding of the strategic objectives. (This is far less common than one

would think by reading the Annual Report!)

2. Agree that the strategic objectives are worth achieving and be willing to make sacrifices to

accomplish them.

3. Share a common view about what parts of the organization have to change, why, and how,

in order to implement the strategy.

4. Commit to a systematic plan of employee engagement, management support, and cross-system dialogue that will foster efficient strategy execution, i.e., the Four Jobs.

Where any of these ingredients are missing, the senior HR professional can and should press the

group to address the issues involved and suggest mechanisms (offsite planning sessions, external

consulting support, coaching, one-on-one’s with the CEO, etc.) that will bring the group into greater

alignment. Once the group is in alignment (numbers 1-3, above), HR can make a very valuable

contribution by proposing a comprehensive set of initiatives to accomplish the Four Jobs. (For a

best practice illustration of how an HR team did this, see McKnight, et al, (2001) and Barbian

(2002).

T O D O ’ S F O R H R S T R A T E G Y I M P L E M E N T A T I O N L E A D E R S

Taking all this into account, below is a set of suggestions for HR professionals who want to get

started tomorrow in working more effectively with the line in manifesting its intentions into reality.

1. Focus on business problems, not HR activities.

Starting today, in every one of your conversations with line executives, ask what is keeping themup at night. Chances are they will not complain of a lack of competency models or that the

company lacks a list of corporate values. Instead, they will speak of things like retooling time,

customer response time, bottlenecks, production costs, efficiency, waste, regulatory incidents

and observations, sales slumps, inadequacy of forecasting processes, etc. They will also not speak

of cost of new hires, number of training courses conducted.




Which strategic priorities is it especially useful for HR professionals to get involved in? Should

they be limited to “HR-type” priorities? What are “HR-type” priorities? Teamwork across

organizational lines? Developing a customer mindset? New skills and competencies? Cross-selling? Does it matter? What matters is that HR is helping the business get results. These are all

legitimate points of involvement if they align with the strategy. But then, so are “non-HR-type”

business objectives such as reducing cycle time, lowering waste, and forging new financial

arrangements with strategic partners.

2. Measure HR—in terms of business results.

The argument we’re making here is akin to that made by Kevin Herring (2001) urges HR to be

more “market-driven.” In Herring’s view, HR will earn the respect it deserves only if it makes

the contribution line executives truly appreciate, bending its efforts to help deliver the most

needed organizational results.

3. Forge a tight, partner-like relationship with the top line executives.

A partnership is one in which both parties are working toward the same goal. Each has “skin in

the game.” Become exceptionally open to feedback as to how you are aiding or not aiding the

line in accomplishing its goals and how the relationship is working/not working. Such a stance is

in stark contrast to the disconcertingly frequent HR habit of telling line functions what problems

they have, what they have to do to solve them, and how they must do so.

4. Be a tenacious coalition-builder.

Of the Four Jobs, Job 4 (cross-system collaboration) is the most important because it drives

more business results. Next to the CEO, HR is better positioned than anyone to forge the

coalitions the strategy requires. “I try to find ways to lock them in a room and force them to

work things out,” one HR friend of ours said. “And usually it works. But I also look at the comp

structure, too, because often this creates senseless tensions between parties that absolutely must

collaborate with one another.”

5. Become more sophisticated with respect to organizational change.

If this article, with its emphasis on organizational change reminds you of the fact that you never

really comprehended all that “OD” stuff in graduate school, do yourself a favor: sign up for a

course on the subject. You won’t regret it. (Some SHRM chapters are now offering courses for

their members called “OD 101.”)




6. Use outside partners to support your effort.

Perhaps self-servingly, consider hiring and using outside partners to help you put together and

pursue your approach to helping the organization align itself with its strategy. It does not display

inadequacy to do so. In fact, objectivity and creativity may require it. Reflecting the myopia that

can result by being a deeply imbedded part of an organization for a long time, Edwards

Demming, the famed Quality guru said, “A system cannot transform itself.”

C O N C L U S I O N

The primary intent of this article has been to articulate the need for HR to become much moreeffectual in the realm of strategy implementation and have offered a perspective (The Four Jobs) to

guide the relevant activities. We hope we have conveyed our conviction that HR professionals can

be exceedingly valuable to organizations, especially as they draw on sound principles of

organizational change and get away from HR programs for the sake of programs.




R E F E R E N C E S ( I N C O M P L E T E )

Barbian, J. (2002) “Ensuring Hearts and Minds.” Training. Volume 39: No. 2.

Becker, B., Huselid, M. and Ulrich, D. 2001. The HR Scorecard: Linking People, Strategy, and Performance .

Harvard Business School Press.

Beer, M. and Eisenstat, R. A. 2000. “The Silent Killers of Strategy Implementation and Learning.”

Sloan Management Review . 41:4, p. 29ff.

Galpin, Timothy (1998). “When Leaders Really Walk the Talk: Making Strategy Work Through

People.” Human Resource Planning. Volume 21: No. 3.

Herring, Kevin (2001). “The Market-Valued Model: a New Paradigm for HR.” Workforce Magazine.

Volume 80: No. 10

Lawler and Mohrman (2000) “HR As a Strategic Partner: What Does It Take to Make It Happen?”

Human Resource Planning. Volume 21: No. 3.

Kaplan and Norton. (1992). “The Balanced Scorecard—Measures That Drive Performance,”

Harvard Business Review , 70, No. 1 (January-February.)

Kotter, J. (1996). Leading Change. Harvard Business School Press.

McKnight, Richard. (Fall, 2001) “The Four Jobs of Strategy Implementation.” OD Practitioner .

Volume 33; No. 3

McKnight, Richard, Doele, Jody, and Christine, Kim. (Fall, 2001) Human Resource Management Journal.

McKnight, R., and Zaklad, A. (2002) “ HR Scorecard: Linking People, Strategy and Performance”

(Book Review). Human Resource Planning , Volume 24: No. 4.

Walker and Reif, (1999). “Human Resource Leaders: Capability Strengths and Gaps.” Human Resource

Planning. Volume 22: No. 4.




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HR Role in Strategy Implemnetation