HR leaders as value creators: Tips for linking strategy to execution
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How can HR professionals ensure they fall into the ‘value creator’ category by successfully linking strategy and organisational goals to what people do in their day-to-day roles?
The road to now
Experienced HR practitioners will recall a time when a key career objective was to obtain a seat at the executive table, to be viewed as a trusted advisor to the CEO, and to have the ear and respect of the C-suite. For many, that has occurred. Today, it’s about maintaining that position and ensuring the true value of the HR function continues to be demonstrated.
Research indicates there’s still some way to go. An AHRI member survey in October 2024 revealed that just 36% of HR leaders believe the HR function is viewed positively by other organisational stakeholders, and only 45% said their work and efforts were adequately recognised by the rest of the organisation.
There's a legacy element at play. However, HR isn't just a cost centre; it's actually a key player in revenue generation. Around 60% of a company's monthly expenses go towards people, who then generate revenue. So, HR is effectively managing the company's largest investment aimed at revenue and building cultures and frameworks for people to thrive.
If human capital needs are ignored, there can be no, or severely curtailed, growth.
On a positive note, a global Mercer report from 2024 found that 71% of CHROs report high alignment with the C-suite on HR and people priorities. The key to strengthening C-suite ties, according to 65% of CHROs, is to share data about employee engagement, retention and productivity.
The path to being ‘value creators’
The essentials for gaining influence and becoming a key strategic partner to the CEO may seem obvious but they bear repeating include:
Being commercially focused and understanding not only the overarching business strategy but also the business drivers and potential risks, threats and challenges
Understanding why key company metrics matter and knowing what ‘success’ looks like
Being more adept at telling HR success stories to make the work and initiatives that HR teams undertake more visible for all stakeholders
Using data and analytics to demonstrate how HR’s actions have impacted the business
Understanding how will your board and CEO measure the performance of the HR team
Having the skills to link strategy to on-the-ground implementation, to get people involved, engaged, and contributing in the right ways
Linking strategy to execution: The missing element
It’s the last point – linking strategy to execution – that is often the missing element. Organisational goals – let alone strategy – don’t mean much if they aren’t articulated effectively to those on the ground doing the work.
Performance management plays a crucial role. Setting OKRs and cascading goals to employees, ensuring individuals understand how their work contributes to organisational objectives, and rewarding exceptional performance are all ways to bridge the gap between strategy and execution. Research backs this up. For example, according to McKinsey & Company research:
42% of leaders report effective performance management when employees’ goals are linked to business priorities (vs. 16% at companies that don’t do this)
62% of leaders who report high performance say their company revisits goals at least twice a year, or on an ad-hoc basis
40% of employees report they are more motivated when their personal goals are linked to company goals
McKinsey says the explanation for why it’s beneficial to link individual performance goals to organisational success is simple:
“Employees will be more effective if they can see how their individual goals fit into the big picture. In recent years, there has been an uptick in the number of companies linking organisational business goals to functional business objectives, and converting those into team-performance goals. This encourages accountability and better performance as individuals grasp the direct impact of their performance.”
The essential ingredients
It’s up to HR leaders to ensure robust performance management processes are in place. Technology plays a key role. For example, Humanforce’s Performance Management solution enables easy cascading of organisational objectives, tracking of team and individual goals, skills and training needs analysis, and facilitation of 360-degree feedback and regular 1:1s between managers and team members.
HR leaders also need to ensure they are providing:
Clear frameworks and processes
Set clear objectives: Ensure everyone understands the strategic goals and the OKRs that support them
Prioritise: Break down goals into specific, actionable tasks and prioritise them according to their impact on strategic objectives
Clear communication and accountability:
Transparent communication is key: Clearly communicate the strategy across all levels, ensuring visibility and clarity
Data-driven insights:
Insights: Use data to provide insights and make informed decisions
Continuous monitoring: Regularly track progress against OKRs, adjust actions as needed, and ensure accountability
Operating calendar: Use a detailed operating calendar to schedule activities, reviews, and milestones
Key questions to ask
In order for HR’s contribution to be truly recognised, HR leaders should be asking:
How linked is my people strategy to my organisation’s overarching business strategy? How often do we revisit that people strategy and are our HR systems and processes agile enough to adapt to changing business needs?
Have we encountered challenges communicating business strategy to those people ‘on-the-ground'? If so, how can we bridge the two?
Do our people understand how their contribution links to organisational performance? Are incentives part of this (to reward contribution to the company’s objectives)?
What metrics or analytics are we using to connect people to strategy – and does our technology stack support this?
The HR profession is at yet another tipping point in its evolution. The pressure is on to navigate seemingly opposing paradoxes: individual and organisation; short and long-term; administrative and strategic; social and personal wellbeing and financial performance. The art of performance management is no different.
When done skillfully, setting goals that link to organisational success can improve the employee commitment materially and help clarify an employee’s role – and that is one of the biggest drivers of organisational performance.
About Humanforce
Humanforce is the best-in-one platform for frontline and flexible workforces, offering a truly employee centred, intelligent and compliant human capital management (HCM) suite – without compromise. Founded in 2002, Humanforce has a 2300+ customer base and over half a million users worldwide. Today, we have offices across Australia, New Zealand, and the UK.
Our vision is to make work easier and life better by focusing on the needs and fulfilment of frontline workers, and the efficiency and optimisation of businesses.
To learn more about how Humanforce’s solution can help automate people processes in your business, please contact us.