“It's not a debate, but organisations need to make HR strategic. Rebuilding new processes needs cross-checking the processes and management of the organisation. They should differentiate between competition strategy and competition parody. The world has changed, but for some reason, HR hasn't. If an HR doesn't know the art of possible, they won't get there ever,” said Brian Sommer, Founder and Owner TechVentive while delivering a masterclass session on ‘Prepping for the next HR Revolution: How to Get Your Strategy Right’ at TechHR India 2023. 

In this session, Sommer highlighted the key areas of making businesses HR strategic, along with the challenges and pitfalls that come along the way.

Differentiating strategic decisions from tactical choices in HR

In the realm of HR strategy, it's crucial to understand that merely adopting new tactics or software is not enough. While some companies fall into the trap of treating tactical decisions as strategic moves, this approach fails to generate meaningful outcomes. True HR strategy involves charting a course towards new and valuable outcomes, often requiring a shift in perspective. Sharing a few examples, Sommer further explains, “Commonly, I've encountered companies that mistake tactical decisions or strategic ones:

• “A prime example is the desire for a new HRMS. Rather than a strategy, this is a tactical choice, which might not even be the right one. Many companies seek off-the-shelf solutions, hoping for an easy answer to their problems. However, this seldom leads to success. I recall an article I wrote years ago highlighting the diminishing human element in HR processes. One story from a colleague emphasized the importance of the human aspect in HR practices.”
• “At Accenture, I frequently clashed with the HR division due to their lack of comprehension. While leading the HR Center of Excellence, I used an analogy of a staircase leading to an unknown destination.”

He remarked, “Often, initial HR strategies are positioned similarly. Strategy cannot be taken right off a shelf; it must be unique to your organisation. Merely adopting practices that mirror competitors won't yield a competitive advantage. Instead, strive for bold policies that resonate with your organization's identity.”

Key insights:

• A great leader creates an environment where people are motivated to stay for the long term, fostering an exceptional employment brand. 
• Strategic HR should contribute to your company's competitive endeavours. 
• While technology can play a role, the strategy should precede the technology, not vice versa.

Survey your organisation's perception: Sommer asked the audience whether they view HR as strategically valuable by saying, “Often, HR is seen as operational, not strategic. This gap needs to be addressed to demonstrate value to external stakeholders and recruits. It's not just about HR's perception of value; it's about external recognition”

Evaluation of organisational readiness for HR strategic implementation

Surveying the phases of explosive growth, mergers, or divestitures that can expose weaknesses of an organisation are the key factors to assess the organisation’s readiness for change. Moreover, these vulnerabilities must be rectified before embarking on a strategic transformation of HR. Meanwhile, addressing any integration issues, procedural gaps, or technology shortcomings along the transition.

Sommer said, “To transition to a strategic approach, focus on understanding your board's viewpoint and priorities. Surveys and assessments provide insight. Don't allow the board's perspective to push you into a tactical approach; HR must maintain a strategic outlook.

• Embrace the "art of the possible." Look beyond current limitations and envision what could be. Recognize that incremental changes are insufficient; the pace of change has accelerated. Be cosmopolitan in your thinking, exploring broader horizons and learning from various industries.
• Craft an engaging, strategic narrative. Imagine headlines that highlight your successful HR transformation five years from now. Develop a cohesive plan that aligns with this vision.
• HR strategy aims to extend both employee and organizational life. Nurture careers with growth opportunities, training, and advancement paths. Also, create value for contractors and suppliers.
• Strive for the strategic quadrant, avoiding custom solutions that offer no competitive advantage. Utilise packaged solutions where appropriate, understanding that certain elements are necessary for business but don't contribute to strategic differentiation.

He concluded, “Remember, a true HR strategy goes beyond tactics and embraces a holistic, transformative perspective. By shifting from 'tactical to strategic', HR can drive valuable outcomes and foster long-term success.”