I had the opportunity recently to talk to a client about their Management Development strategy. It got me thinking. In my experience many HR/L&D (HRD from now on) people find it a real challenge to (succinctly) define their people development strategy. This might seem harsh, but if you are an HRD type person then I challenge you to verbalise it. Go on, try it. In 30 words or less.
This is partly because we HRD types hold the intuitive belief that developing people is inherently important and (probably) has an impact on the business. Of course we’ve never been able to prove it, despite all the work on training evaluation and human capital measurement. I also have a strong feeling that we suspect deep down that ‘training’ doesn’t really work. However, in the current climate I reckon that the ability to make a straightforward, succinct business case for continuing to invest in management development is not only in our interest as a business, but our fellow HRD professionals’ too. If not, then how can we demonstrate that we really do add value to the organisation?!
So, in simple terms this is our take on defining management development strategy.
Defining people strategy should really be no different to defining business strategy so we’ll start there first. Business strategy is really about understanding the environment in which the organisation operates, in order to find ways to develop a competitive advantage, or simply continue making money. We know there is tons of research on strategy, but in essence the kinds of things we would consider when developing strategy are:
§ competitors - who they are, what they’re good at compared to us
§ the economic situation - what’s happening now and what might happen in the future that will impact us
§ customers - who they are and what they want
§ the market – where do we intend to sell our stuff
§ our offering – what are we selling and why is it better than everyone else’s offering
§ and other stuff such as legal or environmental issues and how they might impact on the market place we operate in
Of course, when talking about management development strategy, not all of this applies, at least in the same way. What does apply though is the following:
Business environment.
In this I include the economic situation and the market. Even though HRD is an internal function we still need a firm grasp on what is happening in the outside world. HRD professionals need to talk to their senior managers and understand as much as they can about what’s happening in the market in which the company operates – what are the constraints, challenges, opportunities? This provides our context for how we add value to the business. Even though we cannot shape the external environment we can play a major role in shaping how the business positions itself and how capable it is to compete in the external environment through its people.
Competitors
Many businesses would kill to have no competition, yet this situation is exactly what almost all HRD functions enjoy. Internally we are the experts and there is no other competition for delivering our service. Even the use of external consultants and specialists tends to be policed by the function! If this was a business it could become complacent. I wonder if this is why HRD functions tend to be criticised so much by line managers?!
Customers
Some big businesses (think Tesco) spend millions on understanding their customers - who they are, what they want, and how they behave. HRD has a great opportunity to do the same. The people in your business are your customers, but, as with external customers, your managers and employees all want different things. If you were a business, you would segment customers by demographic, how old they are, where they live, where they work, how many kids they have, what they purchase and why etc. The challenge for HRD functions, therefore, is to first identify who the different employee ‘segments’ are. Then find out what those different groups of employees want from you and the company as a whole. For some it may be more money, for others more holiday or flexible working. Our own research on the reasons people give for leaving companies actually reveals that the number one reason is to do with lack of career progression and development. Eureka! If that’s true of your company then all of a sudden you have a proper piece of strategic information – your people desire development from the company, if they don’t get it they will leave. This costs money and loses intellectual capital, which means we need to invest in developing and retaining people in order for the business to compete and thrive….
So what does this prove? Well business strategy is driven by information. Without a thorough understanding of the kinds of things we have talked about, your the business will not be able to make informed decisions about how to compete and grow. It’s the same with people decisions – without good info you will not able to make informed decisions about where to spend your (limited) development budget. Or influence those who do decide where it gets spent! HRD professionals need to think about how to gather sensible people information and then use it to make the case for being specific about where to invest in people development – because it will complement the business strategy, rather than simply being a good thing to do.
However, as HRD pros we struggle with people metrics. This is partly because it is difficult to measure behaviour - no-one has yet made the absolute empirical linkage between people satisfaction and performance - but it is also because HRD professionals tend to view defining metrics as the end point - I used to spend hours, days, discussing HR metrics with colleagues when I had a proper job. We never got much beyond absence and turnover. Metrics are not the end point, they are the means to the end - which is helping the business align its people processes to help it compete.
I believe in keeping it simple, maybe all we do need to do (as a starting point) is look at absence and turnover, maybe performance ratings, employee satisfaction ratings, exit interview data. We could then look at the numbers by age group, grade, gender. The point is we need to start somewhere to provide us with some clarity over where the business needs are.
We’ve started to develop a ‘Learning Strategy Review’ process based on some of the things we’ve talked about above. It’s still a collection of ideas, but if you’re interested then get in touch – we’d love to pilot it with you. And we won’t even charge you. Now there’s a strategy for winning new customers…..