Three Ways HR Can Add More Strategic Value in a Soft Economy

A couple of weeks ago, I spoke with a Sr. VP of HR at a Fortune 1000 company when the topic of HR strategic value arose. Usually, when I have similar conversations, the first thing that comes up is how to measure strategic value, and that is exactly where we took our conversation that day. Because the business world has changed so dramatically over the last 10 years and because continuous improvement is essential to being competitive and profitable, HR has had to “up their game” and demonstrate measurable results for their respective businesses. No different from other departments, necessitating a business case to prove ROI is now to be expected. In discussing our thoughts on measuring strategic value, we enjoyed trading examples and citing statistics on how development training such as leadership and skills workshops has had an impact on retention. We discussed global shifting demographics and how the change will impact future workforces and an organization’s ability to perform. For instance, from Japan, UK, US, EU, India, and China, there are inherent challenges that need to be addressed now. We both agreed that a tremendous opportunity for HR to demonstrate measurable strategic value is simply by being proactive internally.

Currently, Global US organizations have over $1.6 Trillion ready to deploy; however, the funds are on hold as the economic future is uncertain. Every month and quarter, boards and executive leaders are asking how to improve shareholder value. Do we merge, acquire, be acquired, expand, buy back stock, or distribute dividends? What are the three key economic scenarios, and how do we model our business moving forward? Departments are constantly pushed and pulled without understanding the rationale, thereby causing frustration and a sense of lack of control. What matters most, though, is that HR has an opportunity to focus their efforts on providing strategic value to the business in the current environment by addressing value-creating solutions that will help for the future. As a friend who led a Big 3 consulting firm division once told me during the 2008 recession, “when there are uncertain economic times, there is a great opportunity.”

It is a human instinct to want to change the world, but often, we refuse to acknowledge the need to change ourselves first. Leo Tolstoy once said, “Everyone thinks about changing the world, but no one thinks about changing oneself. “ What we have seen from leading organizations, however, is how they focus on making themselves better during these uncertain times. In business, the most successful businesses have acknowledged this need to change in order to yield a multiplier effect for the business. Because we are a global consulting firm specializing in Talent Intelligence, Process improvement, and Talent Acquisition, my recommendations will be geared towards creating strategic value within the talent management area, rather than other critical areas within HR.

  1. Provide clear value.

After you have a clear understanding of the current issues and the potential long term issues for your organization, synthesize your data and determine the priorities based on importance and urgency. What is your intent, and will you drive a return within 30 days, 6 months, or a year? Can you measure the results in time, money, or risk? If you cannot make the case to save time, provide a return on investment, or mitigate a risk to the business, then you will have a very difficult time convincing people above you to make a change. For example, if your bandwidth issues and your budget and headcount are capped, then you should think about what you can do to replace a current tool with a better one that will provide a greater return. We deal with this daily as Talent Acquisition Directors in need of more effective solutions to identify and attract passive talent. When ROI can be clearly stated through time savings and risk management, then the investment is clear. It is much easier to make a strategic change that is systemic and impactful when value is evident.

2. Manage your political capital wisely.

Managing political capital inside corporations is a tricky game. Some people are generous and then there are those who are scarce. In either (or any other) case, what matters is that you understand how to use it to advance your intentions. For instance, our most effective customers who demonstrate best practices at managing political capital tend to bring in two other colleagues for their opinions prior to going for approval. This is what Jack Welch used to expect from his teams at GE. If a direct report had not run the idea past two other colleagues before going to him (Welch), then he took that approach as a lack of teamwork and a biased solution. By gaining insight and ideas from others who might be involved, they help you build political capital as they support an intention to better the organization. The intention is not about you, but about company improvement. Maybe you are thinking about those who use their political capital out of scarcity and build barriers to block improvement. Yes, they are out there, but you have a better chance of moving your idea forward by bringing them along, instead of by isolating them.

3. Have Courage

In the Wizard of Oz, the lion was impressive on the outside, but he lacked courage on the inside. According to Google’s definition, courage is “the ability to do something that frightens one.” How often do we feel this way within an organization? When we perceive that any change or improvement we suggest could impact our political capital and ultimately our career? It is a very human feeling after all; however, the key word to focus on within the definition is ability. There are many studies that establish the perception of failure is much greater than the reality of it. To control this perceived fear, you should focus on your ability to build a well thought out Plan A and Plan B to back up your recommendations. This will help you achieve the courage to change yourself, which will, in turn, enhance your organization by adding strategic value.

If you have questions, examples, or would like to discuss, please contact me at

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