The Employee as the New Customer: a Strategy for your People
Many corporate leaders advocate that employees are their most important asset. Our own colleague Beverley Fuller even states that the employee is the new customer (10-point mandate, 2020). So how is it possible that most organizations have a thoroughly formulated and extensively communicated business strategy while they lack having a people centered strategy?
We experience that most organizations want to make their employees a key priority but leadership struggles to achieve this. In this article we provide a 5-step approach to develop and execute a value driven people strategy.
One: Understand the business vision and strategy
Before developing your People Vision and Strategy, it is vital to grasp the organizational context. The overall business strategy should be formulated based on the past, the present and the future. Therefore, it is important to understand the organizational long-term objectives, which strategy is chosen to realize this and how the playing field of the organization is developing.
Both these internal and external factors are essential for HR to understand so they can define how they can contribute to, or even achieve, organizational objectives. Based on these objectives a people strategy is developed.
Two: Define the people strategy
As the people strategy must support the organizational vision and strategy it must most certainly also reflect the long-term ambition of HR. The people strategy sets the direction for all HR initiatives as attracting, motivating, developing, compensating of the (future) workforce.
In order to make sure that initiatives are aligned with the organizational (desired) workforce, organizations should determine who are business essential. After these identification and segmentation of key resources we suggest creating employee personas. Employee personas are a representation, a composite sketch, of employee segments. These give insight in the characteristics and needs of these (potential) employees and are useful for tailoring HR practices.
Personas are often created based on quantitative data as demographic information and performance ratings accompanied with qualitative data. Try to fully grasp their believes and motivations during deep dive interviews and conclude with validation workshops.
A prerequisite for successful strategy realization is the awareness and understanding (at least to some extent) of the strategy and the underlying initiatives. This can be achieved by involving employees in the development of the strategy by, for example, making them part of the Employee Persona creation, by clearly communicating the actual strategy and by being transparent about priorities.
Three: People portfolio management
HR departments often have too many projects which have not been prioritized. Implementing HR portfolio management can help the HR team make the right choices by ensuring that everyone knows enough about each other’s projects and how these interact with the organizational initiatives. If you are in an Agile environment, the aim is to reassess and evaluate the projects that you have in a quarterly cadence so that there can be quick and easy decision making when circumstances change.
Rather unusual but potentially very effective is the integration of HR initiatives in overall Portfolio Management. Implying that People initiatives are combined with business initiatives and executed based on priority. This is in line with organizations that see their employees as equally important as their customers.
In order to implement HR portfolio management there are 4 steps that can be taken during a series of workshops:
- Identify all HR projects and their primary focus
- Develop prioritization criteria that are aligned with the organizations people strategy and priorities
- Identify the costs and benefits of delivering each of the projects/service offerings
- Based on the prioritization, allocate funding to the projects that are part of the HR portfolio
- Re-evaluate the portfolio in a quarterly cadence
Four: (Re)Invent your HR practices
In order to realize your strategy and HR initiatives in your portfolio. We would advise to use our (BlinkLane’s) unique Building Block model. In this day and age where what people expect from HR is considerably different to that of 20 years ago, especially if your organization is within a transformation - HR practices need to be reinvented as well. The model captures the most important HR capabilities in any organization which should align with the HR portfolio. In this step, we essentially design the execution of the HR portfolio using the following 4 capabilities as a guide:
- Recruit & Staff
- Develop & Grow
- Monitor & Evaluate
Depending on the nature, type and existence of a transformation and the preferred journey of the organization, these building blocks are affected differently and at a different stage. Thus, an organization designs its own journey by placing the building blocks in their own preferred order based on the prioritization exercise in step 4. More information on the Building Blocks can be found in the article “Reinventing HR Practices: Optimizing Human Potential to Ensure Sustainable Success” by Bosch, Sintnicolaas, and Boele (2019).
Five: Start small and continuously improve
Start your initiative small with many interactions with the employees. Set up pilot initiatives and define an initial impact analysis. Gather data on the pilot and make adjustments to the initiatives based on gathered data. It is a good idea to do this with having continuous feedback loops with specific measurements and hypotheses which live in the same cadence as the quarterly portfolio cadence. In order to do this, one needs to assess both the efficiency and the effectiveness of the HR -related services and activities through both a quantitative and qualitative analysis. This analysis is presented in a Retrospective type setting which also focuses on coming up with solutions to improve on projects.
Once the initiative is scaled it is important to continue with measuring the success of the HR related products and services.
The following are a non-exhaustive list of (health) metrics to continuously measure:
- Employee engagement
- Employee Promotor Score (EPS)
- Lead time of recurrent HR activities (E.g. Recruitment)
These five steps can ultimately help your people orientate towards delivering on organizational objectives because YOU are able to guide them in that direction. The biggest leap is to start, so get going! Understand your business strategy, talk your employees and measure your successes!