chapter  7
26 Pages

HCM Strategy Development

Reader: ‘I take it we’re moving into the first stage of the strategic HCM planning cycle. What are we going to cover?’

Author: ‘This chapter focuses on how HCM strategy, and in particular, creating value HCM strategy, can be developed. The chapter emphasizes the need for strategic alignment and provides a case study from Microsoft which demonstrates alignment and best fit. The chapter also highlights the need for creativity in strategy development and provides some tools and techniques for this. But probably the most important point in the chapter is the use of the HCM value matrix to show, I think really for the first time, why and how it is that business strategy can be led by people’s capability. I know a lot of people talk about putting people before strategy. A good example is Jim Collins’s call to get the right people on the bus. But it’s one thing to say that people management drives strategy, and quite another to illustrate diagrammatically why it’s the case …’

Identifying the Focus for HCM Strategy Development

The first stage in the strategic HCM planning cycle is the identification of a set of strategic objectives to describe an HCM programme. The HCM

value matrix is a useful tool to support objective-setting for two reasons. Firstly, the matrix provides a template for capturing and communicating lead and lag objectives. Secondly, and more importantly, the matrix helps focus objective-setting on the right steps in the HCM value chain. As Figure 7.1 shows, the primary focus or starting point for strategy development (represented by the circles) changes according to the level of value being considered (the box labelled number ‘2’ for value for money, box ‘8’ for adding value and box ‘11’ for creating value).