The strategic role that HR plays in an organisation is well-documented in business literature, but most chief HR officers (CHROs) say it bears repeating, especially since its value is increasingly challenged by other functions.
This is especially true for mature organisations with a presence in both developed and high-growth markets.
For these regional companies, HR certainly cannot take a one-size-fits-all approach, and HR leaders and CHROs are the main drivers controlling this diversity.
One such organisation is medical technology development corporation Medtronic. Its strategy for the Asia-Pacific region is described by Regional Vice President of HR Lorraine Parker-Clegg as “a tale of two cities”.
“The reason for this is that my area of responsibility includes the territories from Japan down to Australia, and these two are highly-developed markets with quite different challenges,” Parker-Clegg shares. “In between these, there are the areas of Southeast Asia and India that have a different set of nuances, and those are the areas that we would describe as our high-growth markets.
“So we would tier these countries into developed, developing, and truly emerging markets,” she adds.
Parker-Clegg states that Medtronic expects an average annual growth rate of six percent for the developed markets, a growth rate of between 10% and 18% per year for the developing markets, and a 20% to 25% growth rate for emerging markets like Southeast Asia.
Aircraft maintenance service provider SIA Engineering is looking to a more international future, having already reached its peak output in its Singapore base.
“The strategy going forward would be about expanding overseas because in Singapore we’re already pretty much where we want to be,” explains Zarina Piperdi, Senior Vice President of HR at the SIA Engineering Company.
Where HR fits in is in identifying and analysing whether entering a particular region or territory is a viable and lucrative option, in terms of employment laws and other factors such as how often labour strikes take place. HR’s role is to ensure the business case is sound.
“For international expansion, it is not so much about what it means to HR but what it means to the organisation,” says Piperdi. “It’s for the organisation to know what is the growth that is planned out; what we need to be mindful of, and what issues come into play.”
Leaders drive culture
An increasingly younger workforce has also meant employee engagement strategies have had to evolve to take this age group’s unique behavioural patterns into account.
But this change is not only HR’s responsibility, says Jayesh Menon, former Global Organisational Effectiveness Leader, Micron Technology. He believes it should also be driven by organisation leaders across various functions.
He laments that some leaders do not follow through on their engagement obligations.
“There are leaders who do fantastically in certain things and there are leaders who actually default on their commitment to engagement actions year-on-year-on-year,” he says.
“If you ask them to commit in terms of specific action plans, they flail over it. This is not just once or twice – I’ve seen this consistently in my experience.”
Menon says he rarely sees organisations punishing leaders who do not commit to improving engagement levels. “I rarely see that happening because businesses are also driven by what value you provide to stakeholders and other factors.”
Menon believes the issue comes back to the organisational culture that the leader drives. He says it becomes difficult for a CHRO to have strong outcomes if other C-suite leaders are not on board.
“If the organisation is not ready for an engagement approach, which is very different from what the CEO or the senior executives feel, don’t even enter the company to do it because that becomes HR for the sake of HR,” he warns.
Ensuring effective execution
Apart from being involved with only formulation, HR leaders also need to oversee and ensure effective execution of policies.
“I believe HR plays different roles and different aspects of the strategy formulation, and then subsequently the execution,” Piperdi asserts.
She says it is important for HR practitioners to be at the policy formulation table right from the earliest stages. They would be able to provide research statistics, forecast and guidelines regarding the feasibility and profitability of the proposed plans.
“That’s where HR can give advice on the issues involved,” Piperdi says. In the example of an organisation looking to find a new market to expand into, HR can alert leadership to the labour issues involved, something that may not be on the radar of other function heads. “If you are to go into these other areas, it would give you similar growth but those issues you see in Country A might not seen in Country B,” she says by example.
After plans have been firmed up, HR then needs to draw out goals and targets.
“We have to ask what it means to build up the organisation of the future, in terms of where we want to grow,” Piperdi says. “This could be about the number of people, the kind of technical workforce that is needed, and the leaders who will set up all the structures and foundations.”
Parker-Clegg says her role combines that of a CHRO and a business partner to the president of Medtronic in Asia-Pacific. As such, she has to be “malleable” across different territories and their corresponding growth rates.
“The process I go through in supporting my leader is quite simple,” she says. “The strategic plan is generated as a multi-functional process and from there we translate that strategy, which is usually a five-year horizon, into a set of human capital actions.”
This process usually begins in October each year.
It doesn’t stop there. Both Piperdi and Parker-Clegg agree that people management leaders have to equip themselves and their teams with finance skills and knowledge in order to be effective business advisors.
“I may be biased in this opinion but it helps to understand a little bit of finance,” Piperdi says. “It means you are able to connect better between the strategy and the bottom line. After all, at the end of the day, it is about leading to an improvement in the bottom line.
“Some knowledge of finance can help you connect it with what it means to HR, why it is important for you to think about the resources in this way, and how does it link back to the strategy and the financial objectives.”
Piperdi adds that she has sent her HR team for specific “finance for non-finance executives” training. She believes this knowledge can help HR professionals “be heard louder in whichever forums they are in”. This will also contribute to the acceptance of HR across different aspects of the organisation, she adds.
Parker-Clegg echoes the importance of HR personnel becoming financially-savvy. She says this is an important way to stay relevant to an organisation’s business needs, especially since data analytics are so widely employed in HR today.
She says this relevance is created in a variety of ways at Medtronic.
“We’re in the midst of HR transformation right now. It doesn’t matter if it’s high-growth or developed markets, we’re transforming the way our HR business partners are equipped,” she shares.
“Some business partners might have a lower ability to be able to build a business case in the language of the people they are serving,” says Parker-Clegg.
“We need to understand the proposition and how it is going to work for the hiring managers,” she continues. “The relevance of that skill becomes especially important when you are driving lots of hiring, as we currently are in Indonesia, Malaysia, and the Philippines.
“We are really re-thinking the way we do our staffing and we’ve already moved to recruitment process outsourcing, but that’s not enough.
“So we’re working on something now specifically for the high-growth environments.”
How can CHROs motivate their workforces?
Gregory Moore, Managing Director, Asia, Miller Heiman Group, says leaders and managers can use the “Skill versus Will Matrix”, a management tool made popular by author Max Landsberg in The Tao of Coaching, to help identify poor performers and the reasons for their lacklustre results.
Moore says the matrix is a four-quadrant model with “skill” on the vertical axis and “will” along the horizontal. If an employee is not performing, managers need to ask the question: “Is this due to a lack of the skills needed to perform, or a lack of willingness (including motivation)?”
If an employee is low on skill and high on will (lower right quadrant), skills training can address the problem, Moore says.
If they are highly skilled but score low on willingness (top left quadrant), other approaches are needed. Leaders will need to identify the constraints that are holding the employee back, and tap into their individual motivators.
Armed with this knowledge of employee motivators, managers will also find it helpful to distinguish between traditional performance reviews and “talent reviews”.
“Performance Reviews are great platforms for discussing skill gaps to improve performance. But, companies with good talent management initiatives in place should keep their Talent Reviews separate,” Moore explains.
“The Talent Review can be used for tapping in to the employee’s motivators about where a person wants to go with their career. Performance should be left out of this conversation.”
Sandeep Aggarwal, Chief Financial Officer of Aon-Hewitt Asia-Pacific, shares his thoughts on the Workday finance and HR analytics platform. He says the cloud-based system is intuitive and easy-to-use, but still provides powerful insights across the functions.