Human Resources As Strategic Performance PartnersSix Keys to Creating A Heroic New Role for Human Resources Professionals

A FranklinCovey White Paper

FranklinCovey (NYSE:FC) is a global firm providing training and tools to assist individuals and organizations in measurably increasing their productivity and effectiveness. Clients include 90 percent of the Fortune 100, more than 75 percent of the Fortune 500, thousands of small and mid-sized businesses, and numerous government entities and educational institutions. Organizations and professionals access FranklinCovey products and services through corporate training, licensed client facilitators, one-on-one coaching, public workshops, catalogs, 180 retail stores, and www.franklincovey.com. More than 3,000 FranklinCovey associates provide professional services and products in 39 offices around the world.© 2002 FranklinCovey Co. All rights reserved. 0208053

Human Resources as Heroic Strategic Performance PartnersThe fabled hero of antiquity is pictured as overcoming insurmountable odds in miraculous ways to accomplish the momentous task, to win the unattainable victory, to fulf ill the impossible dream. Human resource professionals have the opportunity to achieve their own level of heroic status today, through means less daunting than the siege of Troy. Their heroic task at hand is to translate senior management’s strategies into easily understood and executable employee behavior. Sound straight-forward? So did cleaning the Aegean stables. Yet, the benefits of this strategy-to-behavior translation can be monumental, both in employee productivity and corporate profitability.

So, can Human Resources really become a heroic champion of corporate strategy, employee productivity and corporate profitability? Read on.

Over the last several years, corporate executives (as well as HR professionals) have been taking a closer look at HR departments and their potential to make organizations signif icantly more profitable-not just by saving money, but by contributing to growing the business, and achieving major organizational goals. Many senior executives are conditioned to see HR professionals in non-strategic, cost-center roles that are outside the “core operations” of the business. As Paul Kearns points out in The Bottom Line HR Function, executives typically diminish the value of HR because its “soft goals” are automatically separated from the “hard goals” of the business enterprise.

For Human Resources to maximize its strategic contribution, this executive perspective needs to change. HR professionals occupy a unique position to become invaluable partners and catalysts in executing corporate strategy. However, before the HR team will be widely recognized for their value as a strategic performance partners, certain education and repositioning needs to occur within the management ranks.

What is the “highest and best use” of Human Resources in creating strategic value for the business?

Unleashing The Power of EmployeesHR professionals can reposition themselves as a primary resource to help managers unleash the untapped power of their employees. Consider the following data concerning employee value and its unrealized potential:

“Human capital” is considered the most important “intangible asset” used by financial analysts and portfolio managers in their valuation models, representing an average of 35% of the investment decision, according to the authors of The HR Scorecard: Linking People, Strategy, and Performance (Becker, Huselid and Ulrich).

According to Business Week, “The most important key [to increased earnings] is productivity.”

FranklinCovey surveys consistently show that managers and employees feel they are contributing only a little more than half of their potential to achieving core strategic business objectives through their current job requirements, activities and role definitions.

Knowledge workers typically spend 60% of their time on tasks not related to what they believe are their organization’s mission-critical objectives, according to another study done for FranklinCovey by Wirthlin Worldwide in Fall 2000.

Fully 90% of typical managers squander much of their time daily in all sorts of ineffective activities, unrelated to the strategic objectives of their organizations, according to “Beware the Busy Manager, “ published in Harvard Business Review in February 2002.

In a major industrial repair facility, off icers were shocked to f ind that their employees reported spending only about 30% of their time in strategically productive labors.

According to a benchmark cover story by Fortune magazine in June 1999, in an estimated 70% of organizations, CEOs fail not because of bad strategy, but…because of bad execution.”

Clearly, there is tremendous potential for value creation by unleashing the productivity of the most important resource of any business—its employees. There is no more basic or important role in creating strategic value.

For all the volumes written on business strategy, one often-overlooked link tends to undermine performance increases that so many senior executives strive to attain. To paraphrase Peter Drucker’s commentary on strategy: “All grand strategies must ultimately degenerate into work.” And work means behaviors. The fundamental daily activities of employees are the only things that produce results. Announcing grand strategies alone does not produce results. Reengineered systems and processes do not produce results. Executive speeches and communications do not produce results. Only the behaviors of people produce results. All other initiatives are effective only if they ultimately focus employees and create behaviors that create desired results.

Therefore, if Human Resources is to assist managers to improve employee productivity and achieve increased profitability then it must assist to improve or focus the behaviors of employees. Yet, this simple “Productivity Connection”—that only the translation of strategic goals into focused activities and behaviors of employees can create improved business results—appears to be lost on many leaders. One formal study after another confirms that employees frequently engage in activities and behaviors which have little to do with achieving the business objectives they are paid to produce.

Six Keys to Reinforcing Human Resources’ Role as Strategic Performance Partners

Improved employee performance and increased productivity can be reduced down to one fundamental concept—getting the right stuff done in the right way at the right time or, said differently, superior execution. This ability to execute, or to achieve strategic goals as compared to setting them, is based on two fundamental components: focus and synergy.

Focus is the clear identif ication of and commitment to the highest priority goals, and the resulting specif ic activities and employee behaviors necessary to achieve them. It is passionate focus on a few wildly important goals (in contrast to acknowledgement of a broader set of merely important goals) that determines whether these goals are actually accomplished.

Synergy is the transformation of individual employee efforts into collaborative teamwork, producing creative breakthrough thinking and broad scale high quality results. It is the systemic development of synergy—built on high trust, effective

Improved Corporate Performance

Key #1 Key #2 Key #3 Key #4 Key #5 Key #6

Employee Execution

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communication, and exemplary leadership—that fuels execution momentum.

If superior execution is the key to improving corporate performance, then HR’s truly heroic contribution is to help employees individually and as work groups identify, understand, and then engage passionately in daily activities around the “wildly important” priorities of the business. In essence, Human Resources becomes the execution expert of the organization-assisting executives and managers in developing passionate focus and creative synergy among employees and employee work groups.

Here are six key initiatives that the Human Resources team can use to focus employees’ behaviors and improve synergy:

Key #1: Reposition Human Resources As Credible Strategic Performance PartnersA possible barrier preventing Human Resources from claiming the role of strategic business partner is that management may not yet see them in that role. Do not assume that Sarah in HR will be taken seriously when she suddenly starts volunteering ideas—no matter how on-target—to middle managers about focusing sales associates’ behaviors to increase productivity. After all, Sarah is the company benefits administrator. What does she know about achieving the sales department’s goals?

The answer is, she knows plenty. She has been trained to identify ineffective habits and work patterns, to think in terms of inter-departmental collaboration, and to measure specif ic behaviors against results. Through regular association with staff and the trust relationships she’s developed, she knows what’s really happening in sales.

For Sarah’s potential contribution to be valued, much less solicited, the HR function must be seen differently. Here are a few ideas for repositioning HR as a credible partner to senior executives and line managers:

Make deliberate efforts and devote time to developing strong, high trust relationships and business credibility with the management team at all levels. Starting at the top executive levels, build a thorough understanding of the goals and action plans for the business overall and for each major business unit. Budget time each week to meet with different senior managers and their teams to understand the unit’s contribution to the overall business, its goals and desired employee activities and behaviors.

Human Resources professionals can become heroic strategic performance partners with the executive and management teams when they maximize the value-added contribution of the company’s most valuable resource: its employees.

Armed with a thorough understanding of their goals, educate executives and managers on HR’s ability to improve departmental performance through better employee execution. Share data on productivity generally, or for the organization specif ically, from either internal or secondary sources. (Note several examples and references in this article.)

Demonstrate HR’s ability to create more focused and desired employee behaviors. Describe targeted training programs that can address issues, and sketch out potential tracking mechanisms to monitor progress or slippage. Share examples of past successes that can be directly translated to that department’s performance goals.

Assign HR resources to support specif ic projects—but go slowly, depending on the current state of relationships and culture. Perhaps only a few of HR professionals will be involved in this initiative at f irst. Focus on one department or team initially.

Human Resources’ contributions will not immediately unleash the untapped power of all employees and may not have the full support and cooperation of the management team. However, even doubtful senior managers can become avid supporters when they witness success within their own department. Continue to communicate company-wide as initial projects unfold, and broader senior management support and strategic partner credibility will develop.

Key #2: Help Create Organizational Goal AlignmentA primary reason many people don’t focus their daily activities around top priorities is they don’t know what the top priorities are and particularly, how they apply to their department and job. Many senior executives understand clearly the core needs, requirements, and strategic goals of their organization—and assume that everyone else does as well. But everyone else usually does not! Front line employees are typically intelligent and willing workers but are far removed from detailed strategy sessions in executive board rooms. They want and need to know, “What are we trying to accomplish as an organization, how can I contribute, and what are the benefits for me?”

The simple articulation of top corporate goals, however, does not assure that employees can translate them into their own work priorities. FranklinCovey worked with a medium-sized international software f irm of about 5,000 employees. At an

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international conference of the top 250 leaders, the CEO referenced the strategic plan for the next f iscal year. In small breakout groups that followed, it became evident that most of the conference attendees were confused about the specif ics of the plan. When this concern was voiced to the CEO, he became defensively animated and said, “Of course they understand the strategic plan! I gave a two-hour presentation on it to this same group just a month ago!” What are the chances the other 4,750 employees could translate the corporate global strategy into their teams’ priorities, workplans, and daily behaviors?

Human Resources can help communicate corporate strategies and help senior managers to translate that strategy into divisional goals. Here are a few suggestions on ways to help, starting with a diagnostic experiment:

With the approval of the unit head, go through a department and brief ly interview any ten people. Ask them what the three most important strategic priorities of the overall organization are; then what the three most strategic priorities of their department or business unit are; and then what the three most important activities or job functions they personally perform to achieve these larger priorities are. The employee feedback will provide a clear indicator of the size of the communications and understanding gap.

Facilitate sessions within departments to help them create “downstream” strategic goals. Start out by sharing the corporate goals and fielding questions. Then, develop recommendations on how they can implement the corporate strategy. The team will probably generate more recommendations than can realistically be achieved. Prioritize their ideas by identifying the three or four activities having the biggest impact on the corporate goals. Use these as the basis for new departmental goals. Follow-up within a short time on actions to be taken and unanswered questions.

Key #3: Link BHAGS to SDABSIn their landmark Built to Last study on the successful habits of visionary companies, Jim Collins and Jerry Porras noted that corporate industry leaders made “bold commitments to ‘Big Hairy Audacious Goals’ (BHAGs).” Such galvanizing goal setting can drive “adventure, excitement and challenge…(that) grabs people in the gut, gets their juices f lowing, and creates forward momentum.” Certainly, Collins and Porras are correct that the judicious use of BHAGs can “stimulate progress and blast past the competition at crucial points in history.”

Focused Priorities: FranklinCovey’s 360º profile instruments show that managers are perceived as consistently having the greatest difficulty in four key productivity areas: how they (1) make decisions effectively; (2) give and receive beneficial feedback; (3) plan and delegate to avoid crisis management; and (4) set expectations and prioritize work. In summary, managers struggle the most in how they assist and enable employees to focus their own time and that of others on top priorities.

Perform a little experiment—and see for yourself how well workers understand their job’s strategic priorities.

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For HR professionals to succeed as performance partners, however, they should add another critical dimension to BHAGs. Not only must lofty, compelling goals (BHAGs) be well articulated and coordinated, they must also be translated into Specif ic Daily Activities and Behaviors (SDABs) that reach to the individual employee’s job function. When the CEO announces the BHAG to increase revenue growth from 7% to 15% per year, employees want to know answers to the simple questions, “How?” and “What am I supposed to do?”

Remember the productivity connection: Only behaviors produce results. Establishing strategic priorities is a necessary step, but incomplete; employees need to know what to do. It is more diff icult than usually f irst thought to identify which SDABs will produce the desired results. For example, in a client pharmaceutical company, executives were deeply concerned about the lack of blockbuster drugs in the development pipeline, a process typically requiring a lead time of three to seven years. The HR team performed a time and productivity analysis of their research lab personnel. They realized that scientists were spending 42% of their time in basically administrative activities—completing government agency or corporate reports, attending organizational meetings, handling e-mail and phone calls, etc. When research scientists are spending less than 60% of time doing research, is there any wonder that too few strategic results—new blockbuster drugs—are produced?

Here are some suggestions for identifying the Specif ic Daily Activities and Behaviors (SDABs) that will support corporate goals:

Work with managers and their direct reports not only to coordinate understanding of department, team and individual employee goals, but also to determine the priority, timing and accountability for the achievement of each goal

Corporate Employee Performance Goals Behaviors Results (BHAGs) (SDABs)

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Work backwards from the department or team desired output or goal results (which ref lect the corporate goals), to identify the specif ic front-line activities and behaviors that will produce that output and achieve the goal results. Identify present activities and behaviors that do not contribute to, or interfere with, achieving these results and determine how to reduce or eliminate entirely these activities.

Define productivity in terms of input resources (activities, behaviors, f inances, etc.) and output results (products or services produced) for each organizational unit. Track, measure, and provide feedback concerning productivity—both input resources used and output results delivered to internal and external customers. Help managers use this data to make decisions that inf luence employee activities and behaviors, increasing output and reducing input. Use 360º profiles, self-assessment, customer and other stakeholder focused feedback methodologies and instruments in addition to f inancial metrics.

Establish current baseline performance and progressive goals to be achieved over time. Create specif ic metrics and the methodology for capturing and reporting the measurements, to determine progress in achieving the desired results.

Consider the following relationship between employee behaviors and productivity. As cited in a Harvard Business Review article in September 1995 (“Realize Your Customers’ Full Profit Potential,” Grand and Schlesinger), the difference between the productivity of top-level performers and average performers ranges from 50% to 125%, with the greater gap appearing in more complex jobs. The gap between top-level performers and the bottom 1% is signif icantly greater—ranging from 300% to over 1,200% for medium complexity jobs, and to almost infinity for high-complexity jobs. The reason is simple yet powerful: top performers not only do things differently, they do different things. Their system of activities and behaviors is different. Human Resources can identify these high performers in organizations and help to replicate these systemic activities and behaviors to elevate the productivity of all employees.

Accountability: Worthy of an entire treatment on its own, the basic principle referenced here is that people perform better when they are held accountable. Consider evolving the traditional “annual performance review” into mutual accountability reviews between supervisors and direct reports to discuss progress against SDABs. HR professionals can initially facilitate such sessions.

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Key #4: Facilitate Interdependent BehaviorsNumerous surveys have identif ied two basic categories of barriers that prevent organizations from performing more effectively: (1) lack of interdependence, and (2) low trust. The two are obviously related. As one head of Human Resources remarked, “It’s far easier to reengineer systems and processes than to redesign people. On paper, the departments are supposed to work well together, but in practice they don’t communicate, they don’t share, and they don’t know what each other is doing. We waste time, exasperate people, duplicate efforts, and let other important things fall through the cracks.”

While a company is composed of individuals, it is collective behaviors that ultimately are critical to increased company productivity and profitability. Virtually everyone depends on someone else to complete a business project, whether it is a team member or internal supplier. To achieve BHAGs, managers will need to identify the interdependent behaviors necessary across boundaries and territorial barriers (departments, divisions, geography, language, culture) to produce overall strategic results.

HR can help employees and divisions work together more effectively across divisions. Try the follow approaches, among many others:

Identify interdependent behaviors; they may not be obvious to employees. Start by interviewing managers, asking them to identify the activities for which employees require input from, or produce output for, other departments or customers. Then, interview employees. What are their complaints in working with other areas of the company? The bottlenecks? Find the tasks where departments perform “handoffs” of work product or interim output to others.

Diagnose barriers to achieving cross department goals. While the barriers may occasionally be personalities, more often they are conf licting strategic goals, conf licting incentives, lack of clear process and accountability, or a dearth of clear and frequent communication.

Organize one-day “job swaps” between departments which interface regularly. Let them experience first-hand what their colleagues address daily. By exchanging such “job swaps,” mutual learning and problem solving dialogue will take place on the spot.

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Key #5: Challenge “Sacred Cows” That Hinder ExecutionIn every organization, there are always time-consuming , non-mission-critical activities, practices, and initiatives that hinder execution. Organizations adhere to processes more often because they are “ just the way we do things” than because the processes have withstood close scrutiny.

There are several approaches that can change less focused older habits, and create more focused SDABs to support unit and organizational performance goals. Try some of these ideas (and create others):

Conduct “continue, stop, start” sessions with employees that give them freedom to challenge “sacred cows” and build new processes. Get the support of senior management and include them in the sessions, depending on relationships and trust levels. Make some sessions purely departmental; others should be cross-functional.

When possible, try bringing in creative thinkers from outside organizations. It is quite possible that partners from outside agencies and/or suppliers have observed non-productive company practices from afar but “bitten their tongues” for fear of damaging client/vendor relationships.

Before discarding old processes for new ones, use measurability as a litmus test. Ask the group, “will the new process allow me to track a clear causal relationship between SDABs and BHAGs?” If the answer is yes, odds are good that the new process will be a more productive method of achieving corporate goals.

Report back to employees in a timely way the actions taken as a result of their input.

Key #6: Deliver Training That Links Behaviors to Desired ResultsMost HR and training departments already understand that education and professional development should be related to the organization’s strategic goals and delivered in a timely way while also contributing to the employee’s career growth. But do current training programs drive and support focused and desired behaviors and foster synergy? To change behaviors requires more than just excellent classroom training, no matter how beneficial it is at the time. Think of training as an integrated process not so much of gaining knowledge or skills, but of changing behaviors. Ask and address three questions for each training initiative:

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What are the desired results of this training, and how do they relate to desired employee behaviors and the unit goals of the employees attending?

How well do the employees understand the linkage between the training content, the desired front-line behaviors, and corporate goals?

How does the training support and reinforce focused and sustained behaviors, so that six months later the productivity stays high and actually continues to increase?

ConclusionThe six keys outlined here certainly do not exhaust the opportunities for Human Resources contributions to employee productivity as a strategic partner. For instance, all organizations suffer from some degree of systems and process misalignments that can significantly reduce performance, stif le synergy, and demoralize employees. Operations restructuring and business process reengineering represent advanced avenues for HR exploration and development as internal organizational consultants.

However, these six keys represent ways in which HR professionals can contribute solutions to one of the biggest dilemmas facing senior management today - execution. In practical business life, the HR professional as strategic performance partner is not the substance of heroic myth and fable. With closer examination, there are many cases in which Human Resources leaders truly excel in making major contributions toward employee focus and collaboration. With these keys in hand, perhaps many more HR professionals can redefine their strategic contribution to their business enterprise. The performance results realized over time will add value to their organization, customers, employees, and their bottom line.

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SummaryHow Human Resources can Become Heroic Strategic Performance PartnersHuman Resources professionals act as coach, facilitator and partner with executives and line managers in each of the following key initiatives:

1. Reposition the Human Resources team with senior leadership as credible partners to unleash the power of employees.

2. Help create organizational goal alignment by translating corporate strategy into division, department, team and individual goals.

3. Link BHAGs to SDABs. Measure, record, and report productivity progress.

4. Identify and facilitate interdependent behaviors vertically and horizontally.

5. Challenge “sacred cows” that can hinder execution by interfering with focus and inhibiting synergy.

6. Deliver training that links employee behaviors to desired goals.

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Recommendations for additional resource articles: 1. “Beware the Busy Manager,” Heike Bruch and Sumantra Ghosal, Harvard Business

Review (February 2002).

2. “Good to Great,” Jim Collins, Fast Company (October 2001).

3. “Why Can’t We Get Anything Done?,” Alan M. Webber, Fast Company ( June 2000).

4. “Execution As Attitude,” Lawrence A. Bossidy, The Leigh Advisor (Summer 2002).

5. “Why CEOs Fail,” Ram Charan, Fortune ( June 21, 1999).

6. “Creativity is Not Enough,” Theodore Levitt, Harvard Business Review (August 2002).

7. “HR’s Push for Productivity,” Charlene Marmer Solomon, Workforce (August 2002)