Unfortunately, HR is to a great extent still trapped in the 80s, when it was merely an administrative function primarily responsible for personnel management. Therefore, HR is, in some companies, not adequately business-oriented in the sense that the focus is on improving the HR function rather than the business as a whole. This lack of strategic leadership acumen ultimately means that HR cannot become the “strategic positioner” – a term coined by Dave Ulrich, HR & Leadership guru – it has the potential to be and contribute to sound business decision-making.
According to Ulrich, in order to drive strategic decisions and understand why certain business decisions are necessary, HR professionals should radically adjust their mindset; instead of analyzing and understanding internal needs and decisions which require them to look outwards for solutions, HR should first get a grasp of external business conditions and trends which can then inform internal business decisions and actions. This mindset shift ought to entail an in-depth understanding of the organization’s corporate strategy, how the company can thrash the competition and thrive, who the inside and outside stakeholders are and what conditions pose challenges and create opportunity for the business.
In addition to becoming more business-savvy, HR needs to build two crucial qualities; namely, confidence and resilience. Without these two, HR will be unable to showcase its importance to business strategy. Studies have shown that Chief HR officers received the lowest ranking in confidence levels in comparison to their chief executive counterparts. To overcome this shortcoming, HR should start with the business. In other words, they should opt to tie their HR planning to organizational strategy and make an effort to show how their decisions add value. Similarly, resilience is acquired when HR becomes more of a risk-taker and overcomes their fear of failure. As Ulrich suggests, HR should learn to “fail forward” which means there should be less focus on failure itself and more focus on the lessons that can be learnt from it.
Finally, apart from cultivating these competencies to overcome the self-defeating mentality plaguing the function, HR leaders can attain excellence and add real business value by knowing how to set and execute strategy, manage the existing human capital effectively and think forward on how to build and foster talent for the future. This is precisely what HR partnering with the business means.