Part - I

The pressure on Human Resources to become strategic is not new. In 1997, David Ulrich initiated the debate by labeling HR "ineffective, incompetent, costly and value-sapping." With this statement he challenged HR professionals to create value and move beyond administration to business partnership. So how close has HR come to achieving this?

Defining what "value" means in HR terms is the clincher. Outsourcing solutions, Web-enabled processes and shared services have almost eliminated the need for HR as a purely administrative function. Today, HR can only truly add value if it helps the organization develop capabilities to compete and win business. This includes attracting and retaining talent, acting with speed and agility, instilling learning, crafting a shared identity, facilitating innovation, investing in the future of leadership, and providing strategic clarity to the entire organization.

The meaning of value itself has changed dramatically since the events of September 11, 2001. The economic downturn and fragile international relations have meant that cultural issues and change now take center stage for HR. Speaking at The London Business Forum in 2001, Gary Hamel said: "We now face relentless margin pressure; ever more powerful customers; diminishing returns on yesterday's sure-fire strategies; anaemic growth; and enormous pressure to innovate." A daunting set of issues, to be sure.

How can Human Resources make a difference?

If the successful execution of business strategy is the ultimate goal of strategic HR then, like other functions in the organization, HR should be "market-driven." The extent of HR's influence is immense and the function needs to create a link between internal operations and external performance. On matters of business strategy, HR needs to take a fully aligned and integrated approach. Steve Harvey, Director of People, Profit and Loyalty at Microsoft, made the journey from tactics to strategy by first taking a consultative approach to HR. Harvey says that the key to being strategic is to "worry about the same business issues that keep the CEO awake at night." He notes that with increased connectivity and device proliferation, HR cannot hide behind administrative "HR handcuffs" and must make the connection between employee loyalty and customer loyalty. He believes that if you create an environment where people can do their best work, then they will turnaround the company's performance.

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Source: The Net