A growth plan is hatched in a boardroom with the guidance of C-level executives and high-level managers. Too often, human resources staff is not invited during the early stages of the plan. But business growth is intrinsically linked to its human capital, says Michael Manser, Vice President of Human Capital Solutions for Talent Tree of Houston.
“Executives need to realize that a company’s strategic plan will always be linked to human capital resource planning ” he says. “You can’t just say, ‘We’re trying to grow X percent, and we’re hoping everyone will pull together and do more.’ That just doesn’t happen; hope is not a plan.”
Smart Business spoke with Manser about the importance of taking resource planning, hiring issues and organizational goals into consideration when putting forth growth plans for your company.
What are some of the obstacles businesses face when trying to align a growth plan with their human resource plans?
Your company’s organizational strategy will drive your business goals, which will, in turn, drive your work force planning. When there is a business goal to grow, say, 10 percent over the course of a year, do you know how many employees you need to hire? What type of employees you need to hire? What the timing of these additions needs to be to attain your goals?
Could you explain what you mean by ‘organizational strategy’?
An organization’s strategy captures its position in the marketplace as perceived by its customer base. In his book ‘The Workforce Scorecard,’ John Huselid gave a simple but powerful model of the three basic strategy groups most every company will fit in: operational efficiency, product expertise and customer intimacy. For example, companies like McDonald’s and Wal-Mart have an organizational goal of operational efficiency that is, their revenue comes from being efficient in delivering an inexpensive product to the most people. Companies with a product expertise strategy rely on product quality that is literally synonymous with their brand, such as Harley Davidson, Apple and Microsoft. The third type of company, customer intimacy relates to service or an experience that a customer gets for his or her money, such as the experience of shopping at Nordstrom, or how you visit Ace Hardware because ‘Ace is the place with the helpful hardware man.’ Depending on how a company’s organizational strategy works will drive how a business chooses, and compensates, its work force.
For example, a perfume company with a product expertise organizational strategy will approach how to achieve a 10 percent growth much differently than if it operated under one of the other two models because its revenue depends on creating unique fragrances for its competitive advantage and growth. So, it may opt to spend its growth budget on hiring the best qualified chemist to create new fragrances, rather than high-end sales-people, or procuring inexpensive ways to get raw ingredients.
Once you have revisited your business strategy and organizational goals, what’s next?
Do you anticipate that the performance results of your staff will achieve the new company’s objectives? Does your hiring plan take into account the learning curve? Should you hire sooner rather than later to get performance results up quicker? Do you have enough recruiters to accomplish your goals? Do you have enough money to hire these new employees? Where will you physically put these employees? Do you have enough offices, desks and computers?
What happens when businesses don’t go through this process of lining up growth plans with organizational goals and hiring needs?
Without connecting the strategy to the hiring plan, you won’t achieve the results. This failure will show up in a variety of ways; for example, while a business may know how many employees to hire, it may not know which ones are essential to its bottom line. Or, it may know the right employees to hire, but it may not have the resources to hire them or a place to put them once they are hired.
Where does this process need to start to avoid these mistakes?
HR and finance personnel need to be involved right at the beginning of a growth plan in order to avoid the disconnect between strategic goals and the hiring plan. Business executives, from the start of planning for growth, need to ask their team: How do these growth goals relate to hiring? And, how can HR and the work force help achieve those goals? Integrating HR executives into the strategic planning process will ensure a connection to the engine that drives your company the work force.
MICHAEL MANSER is the Vice President of Human Capital Solutions for Talent Tree, based in Houston. Reach him at (713) 361-7303 or by e-mail at email@example.com.