Elevating HR Capabilities for Sustained Business Impact

Posted by Arthur Mazor, and Gary Johnsen on March 13, 2018.

Organization performance, at its core, is about using your enterprise’s assets to maximize its potential to achieve goals. The current age of disruption presents new challenges, where forces have already dramatically impacted the talent landscape, likely disrupting your business model and radically changing when, where, and how work is done and who does it. Current HR capabilities may no longer be adequate for sustained performance in this disruptive, dynamic, and digital business and workplace environment. It’s time for a refresh.

Industries across the board are experiencing new competitors, new products, and new business models that are significantly changing the face of business forever. Customer expectations and buying patterns are changing, digital technology is here to stay, and the workplace has new expectations for work and careers. Many companies – and sometimes entire industries – are succumbing to disruption faster than before. The average lifespan of S&P 500 index of leading US companies has decreased by more than 50 years in the last century, from 67 years in the 1920s to just 15 years today.1

One constant in all of this disruption is people. Your workforce and talent have never been more important to ongoing successful performance—which means HR has never been more important. High-impact HR organizations are now expected to bring solutions that are focused on improving enterprise performance and productivity through people. This is becoming more challenging, and the need to meet that goal is driving leaders and HR to pause, pivot, adapt, and build new HR capabilities.

The new HR capability framework
A refreshed HR capability framework provides a foundation from which to elevate HR. The framework is based on research from Bersin – Deloitte Consulting LLP, The Global Human Capital Trends report that surveys thousands of leaders from 140 countries each year, and the collective knowledge gained through field experience across hundreds of organizations.

The framework identifies the HR capabilities needed for success in the modern age. These capabilities reside at the organization level and are a combination of processes, technologies, infrastructure, and talent required for sustained performance against business objectives.

The new HR capability framework is built on the foundation that, for HR to have a consistent impact on business results, the function must understand and embrace its new value chain and the new outcomes it can deliver. This means:

  • HR Designs strategic, customer-centric, digitally enabled, and data-tested workforce and talent solutions
  • HR Delivers workforce and talent solutions that use customer experience to drive engagement and productivity and enable leaders, managers, and the workforce to deliver on business results
  • HR Sustains its impact on business results by continually sensing trends, partnering with networks to crowdsource fresh ideas and innovations, making adjustments, and building capabilities

As shown below, this design-deliver-sustain foundation comprises seven critical capability groups with 21 capability elements that are used to measure and build capability maturity so HR can maximize its potential to achieve business outcomes.

Source: Deloitte Consulting LLP

The HR capability framework consists of familiar and newer capabilities that help shift and pivot HR from being “service provider” to “strategic business leader, providing measurable business impact”.

For designing workforce and talent solutions, the framework includes a shift to being:

  • Strategically valued by the business
  • Digitally mastered, taking full advantage of digital technologies, traits, and behaviors
  • Customer centric, designing with outcomes and customers as the target
  • Data enabled, providing validated solutions that help steer business strategy

For delivering workforce and talent solutions, the framework includes a shift to:

  • A renewed focus on engagement as the driver of an irresistible workplace that fuels people’s productivity, passion, and purpose
  • A new target of working on the business, measuring success by business results
  • A platform that enables meaningful interactions between leaders, managers, the workforce, and the organization’s customers to achieve the right business results in the right way so that customers experience value

And finally, for sustained performance, the framework includes a shift where:

  • HR extends itself, reaching out and forming partnerships inside and outside the organization that yield information and innovation
  • HR uses a full spectrum of voices and faces to build solutions, replacing a divide-and-conquer, siloed model with an integrated approach that combines the capabilities of HR with those of IT, finance, marketing, and other functions to treat the workforce as a sustaining corporate asset.

As organizations navigate this age of constant disruption for their businesses and workforce, HR is uniquely positioned to lead by shifting, building, and deploying a new set of capabilities, focused on business outcomes, using innovative practices and enabling technologies. The path to High-Impact HR includes making a series of Strategic Choices. Elevating HR capabilities should be a primary focus among the many choices.

Arthur Mazor is a principal with Deloitte Consulting LLP and the practice leader for HR Strategy & Employee Experience and Global HR Service Delivery. He collaborates with complex, global clients to achieve high business impact with a focus on transforming human capital strategies, programs, and services.
Gary Johnsen is a specialist leader with Deloitte Consulting LLP. He helps complex organizations design and deploy innovative HR strategies, HR operating models, and leads Deloitte’s HR Professional Capability Academy.
The authors would like to thank the following individuals for their contributions to this post: Michelle Pugh, Anurag Dhingra, and Sarah Brook

1 Kim Gittleson, “Can a Company Live Forever?” BBC News, New York, January 19, 2012, http://www.bbc.com/news/business-16611040.

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