Monday, April 25, 2022

HR Strategy Tops Priority List for 2022


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Organizations, whether small or large, global or local, old or new - are not simple. They are not made up of just one type of asset. For example, your organization is not made up of only financial assets; however, the way we study organizations lends itself to a simple measurement process. Leaders tend to focus on one asset at a time, maybe because the people who report to them manage individual groups of assets. One person leads finance, another focuses on human resources and yet one more individual manages customer relationships. This silo approach tends to help people focus, but when it comes to understanding a business, it can be dysfunctional or at the least misinform leaders. 

The Business Drivers Pulse attempts to correct this problem. Rather than focus on just one business driver, we put together the core assets each company manages into one study. This work has been done by our team for numerous years and in many different settings. We have run the study in the Leadership Pulse, and we used this analysis in client organizations. Lastly, it has been a core piece of work in my work on initial public offerings, providing me with the ability to study how these assets combined predict short- and long-term business outcomes such as stock price growth, revenue growth and long-term firm survival. 

Business Drivers: The business drivers study covers a range of organizational assets or areas of strength, from ability to manage profits and cash flow, to brand and pricing strategy, strategic planning process, employees, culture, leaders, internal technology and more. The business drivers uniquely focus on multiple assets vs. doing a deep dive on just one line of inquiry (e.g. study of just leadership issues). 

Diversity, Equity, and Inclusion (DEI): This year we added something new to the study. We included DEI as an additional asset category. Given the changes happening in the DEI area, we thought it was worth studying as a unique and separate asset area. Thus, in this research we asked leaders to tell us how important all these different assets are to their company’s performance. This allows us to study DEI not as a single piece of research, but instead, as one of a bucket of assets and allow leaders to think about DEI compared to things like cash, technology, leaders, people overall and more. 

Why Study all Assets at the Same Time? You may wonder why take on this approach or why am I suggesting this methodology is better or at least different from how you would normally approach a study. The reason is because leaders are making decisions about which assets to pay attention to all the time – which asset classes get more money, which get more time, which get more people. Leaders compare one asset to another, so we think the more potentially useful approach to studying assets is to evaluate them together. That is what we do in this project. Over the years we have been able to show which assets lead to short vs. long-term gains and which assets are flashy but not necessarily helpful in driving many organizational outcomes. I welcome you to review this work, and if you are part of the study, you will receive your own personal reports to review how you responded compared to the benchmark data. If you did not participate and are interested in learning more, please contact me or the eePulse team. 

Strategic HR May Win the Culture vs. Strategy War in 2022: Over the years we’ve seen the business drivers data support the culture eats strategy notion, but then in subsequent studies the data suggested that strategy was more important or “eats” culture. This year is an interesting mix. When we ran the analysis plotting the business drivers against firm performance, we found that strategy again won, but it was strategic HRM. The data suggest that focusing on strategic HR as a priority may have the biggest impact on improving firm performance in 2022. We also uncovered that diversity, the newest entry to the study, is showing high potential to also impact firm performance as well as individual employee energy, which is a measure of employee productivity and wellness. 


Theresa M. Welbourne

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