In one of the organizations, the Group CEO wanted a reward’s plan for a subsidiary which had been making losses for past 4-5 years. A new set of the workforce had come in who were tasked with the challenge to turn around breakeven in 3 years and turn around the firm in 5 years. Having understood the 5-year vision, the challenge of that subsidiary’s management was to retain the key people who could turn this into a reality. For that, a rewards plan that does not drain the cash flow and is able to retain the key talent was required. And to create this effective and efficient strategy, the rewards team worked closely with the CFO to understand the plans and the triggers required to help the business break even. Then a reward plan which did not work around the common measurements like profitability or sales was created. As the plan was built together with the CFO, selling it to the local management and the group management and getting the buy-in was easier. This case shows that understanding the broad vision of the CEO and then aligning it to reward strategy is the key to leadership buy-in.
Parneet Soni, Total Rewards Head, Piramal Enterprises shared this story from her experience in the Total Rewards and Wellness Conclave and highlighted the pillars of getting leadership buy-in for rewards initiatives. Here are few tips for HR leader and Rewards strategist as shared by her:
Ability to interpret P&L and balance sheet
The ability to interpret the financial books of the company helps the HR leaders in strategizing the rewards strategy in terms of figuring out the ROI on rewards. For some businesses, margins might be the priority while for others it could be about creating shareholder value. Some companies could be in startup mode and be focusing more on cash flow. A clear understanding of business needs and the financials of organization enables the HR to know what is on their C.E.Os mind.
Offer a business solution and not an HR solution
After gaining clarity about the CEOs vision, the next step is to build a business solution. The interpretation of books of accounts comes in handy here. The rewards strategy has to be presented to the leaders and decision makers as a solution to a business problem. It should not be suggested just as a right thing to do or it shouldn’t be presented as just an HR solution; it has to be a business solution having a larger impact. For instance, when the decision of moving away from the bell curve had to be taken and the whole process of performance management was under transformation, it was important to identify whether or not it will be relevant for every business. Just because companies like GE, Accenture and Deloitte are moving away, it is not necessary that every business should do the same. A particular trend being popular in HR community is not reason enough to make a huge business change; the benefit of the transition has to be squared down to organizational success.
Strategize and present your case backed by data
Data and analytics are fundamental in winning the appreciation of the key decision makers. With the help of information retrieved from this data analysis, HR leaders are able to create a more robust and effective rewards strategy. This data-driven strategy is more comprehensible for the key decision makers.
Find an ally outside the HR function
Working closely with the CFO to build the reward strategy, helped Praneet in winning the leadership trust as she already had someone in leadership team on her side. When someone in the top is kept in the loop throughout the whole process of creating a new plan, one it gives a broader perspective and the chances of creating a business solution increases. Second, the leadership trust is already half won.
Getting a leadership buy-in is a stage which many HR strategies are not able to cross. And the key to cross this milestone lies in building a business solution with a clear understanding of the vision and financial outlook impacting the whole organization. Build the ability to interpret the financials, utilize the data and present a business solution to win the leadership buy-in. Instead of getting stuck at the stage of finding a perfect solution, strategize and run an initiative to learn more about its effectiveness. Revisit and review the already executed processes. Take the first step even if it’s a small step. Remember to take this step in the right direction of solving a business challenge and creating an impact.