Business focus

7 Steps to Writing a Business Case

Below we discuss Writing a Business Case in seven easy steps. Specifically, we discuss:

What is a Business Case?
Why you should bother Writing a Business Case.
Seven steps to Writing a Business Case
Three things to remember about Writing a Business Case

What is a Business Case?

A Business Case is a document you create in order to help you get approval or financial commitment to a project or change initiative.

Why Bother Writing a Business Case?

It will help you to organize your thoughts and test your ideas. Some things seem like great ideas initially, but after you put some structured thought into it, several questions may arise.
It will help you clarify and focus your efforts. Just a little bit of structure can assist you in the implementation of your idea.
It will aid you in ultimately selling your project or change initiative to stakeholders.
It will provide the basis for more detailed project planning upon approval.

Seven Steps to Writing a Business Case

Create a Backround (or Project Definition) Statement: The first step to Writing a Business Case is to explain the background of the project or initiative. In this phase, you need to provide just enough information to inform the reader as to why you’re bringing the idea or subject up.
State the Objectives (Future State or Desired Outcome): What are your specific objectives for this project or initiative? What is it that you are going to deliver? Try to articulate the root value of the opportunities that you are planning for. Imagine an investor sitting across the table from you: Why would she give you money or otherwise invest in your project?
Describe the Current Situation: Now that you’ve defined your future state, you need to determine where you currently are on that journey. Make sure you include facts, figures, and data wherever possible. You need to create a compelling argument that highlights the gap between desired state and current situation.
Put Forth a Recommendation or Solution: If you’ve followed the above steps, you’ve created a hunger in your audience for some sort of change. Now you need recommend what that change should be. Articulate your ideas as clearly as possible. This section could include a few different options, but ultimately you should commit to a specific recommendation.
Determine Your Success Criteria and Measures: How you will measure the success of the project? What will change as a result of your intervention? Note that your success criteria must be measurable. The return on investment should be included in this section.
Determine Your Support Required: A key part of writing a business case, is to determine who you need support from and letting them know exactly what you need from them. You can’t point fingers after the fact. Indicate what support you need from outside resources to achieve your goals. This includes the resources required in terms of time, effort, tools, money, and other resources.
Articulate Next Steps and the Timeline: Once you have approval for your business case what are some key milestones that come next? When will you commit to finish/deliver?

Three Things to Remember About Writing a Business Case

Ensure that the document is clear and succinct. Minimize the use of jargon, and speak in clear and concise terms.
Include factual information – you’ve done your homework here’s your chance to prove it.
Sell it! Speak to people about the benefits of pursuing your idea. Demonstrate the value the project brings to the organization, customer and financial bottom line of the company.

Watch the ‘3-Minute Crash Course’ about Writing a Business Case (CLICK THE ARROW TO START THE VIDEO):

Optimizing Your Business Process Can Be a Really Bad Idea

Before the industrial revolution, most of us were connected to the outputs of our labor. We were either farmers or craftsmen in cottage industries where we worked on something for some period of time, and then either harvested, used, or sold the output of all our hard work.

In the 21^st century the link between what we toil on daily, and the output of that toil is much more illusive – particularly so in information based jobs and industries. We behave like some really minor cog, in some great big organizational wheel always feeling at least slightly nervous that if we got hit by a truck, it might take some time before anyone noticed.

As a result, we become focused on a series of tasks, rather than how those tasks contribute to some greater goal. Several years ago I did a job at a sawmill. This was before the forest sector in North America got completely spanked, and prior to Americans and Canadians sparring each other, and failing to recognize the much greater threat was coming from outside NAFTA.

Turning a raw log into a two-by-four is a much more complicated process than you might think. There are lots of moving parts and many people involved before you can go down to the Home Depot and buy some boards to build that eyesore treehouse for the kids in your backyard. As a result, you’ve got several groups of people that optimize their little part of much larger process without ever putting their head up to see if what they’re doing makes any sense.

Raw logs are scanned by laser on their way into the mill to optimize the use of fibre, and reduce the amount of waste (also known as chips). The problem is as the timber got smaller and smaller over the course of many years, optimizing the amount of fibre meant that sawmills were producing a whole bunch of lumber with a dimension of 1” X 1” – about the size of a garden stake.

So you can imagine my surprise walking into the lumberyard of a sawmill, and learning that 80% of the space was taken up by garden stakes and bean poles. Somewhere I had missed the bulletin about the fall of society, and our return to an agrarian economy. Apparently, the larger lumber dimensions (like the wood you use to actually build things) were no longer required.

This is what happens when people optimize their little part of the business without any regard for the larger organizational goals. This sawmill was indeed maximizing the amount of fibre recovered from each log – they just weren’t producing anything that anyone needed or wanted.

It would be easy to think this is an isolated case, but there are examples everywhere of people optimizing a piece of the business to the sub-optimization of the whole enterprise. Ironically, this is often encouraged by well-meaning business improvement people, or high-paid consultants.

The bottom line is to draw a clear path between what each person does every day, and the higher-level goals of the organization. If this path of vision is obstructed, you may end up with a yard full of garden stakes.

Strategy Mapping

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Strategy mapping is a simple tool that individual managers (as well as whole organizations) can use to connect individual effort to higher level corporate goals. Below we discuss:

What strategy mapping is
Why individual managers should bother with strategy mapping
Examples of strategy mapping
Potential pitfalls of strategy mapping

What is Strategy Mapping?

A simple technique to connect people’s action to key business drivers.
Created by Kaplan & Norton of The Balanced Scorecard fame.
It’s the next logical extension of the Balanced Scorecard (click here for a Balanced Scorecard Toolkit)
Several books on strategy mapping have been published by Kaplan & Norton, including:
- The Strategy Focused Organization (2000)
- Strategy Maps (2003)

Why Use Strategy Mapping?

Strategy mapping is a tool that is elegant in its simplicity that can be used by organizations or individual manager.

Strategy mapping creates a clear line of sight between individual efforts and organizational objectives
Strategy mapping translates higher level business strategies to operational terms
Strategy mapping Aligns people and action
Strategy mapping helps put a value on things traditionally viewed as hard to measure

Strategy Mapping Example (Standard categories)

Strategy Mapping (Example from an HR department)

For each of the brainstormed categories above, metrics and operational goals would be established.

Potential Pitfalls for Strategy Mapping

Like any other tool, strategy mapping can be used well, or used poorly. Some potential pitfalls to watch out for:

Being unclear on larger organizational goals will cause confusion when strategy mapping. If it is not clear at the top of your strategy map, it will only get more unfocused as you progress downwards.
Not including your people in your strategy mapping exercise. It is a waste of time to create a strategy map without the participation of the people doing the work.
Letting strategy mapping (or the balanced scorecard) take on a life of its own. Tools need to be used wisely, and not become more important than the work they are supposed to facilitate or clarify.

3 Things to Remember About Strategy Mapping:

Keep it simple. Strategy mapping works because it is conceptually easy. Do not make it more difficult than it needs to be.
Put your strategy map front & center. Once you have created your strategy map, put it where people can see it, and understand how their efforts impact the larger organizational goals.
Adjust the categories to your needs. Kaplan and Norton suggest four perspectives, and they are excellent starting points for the development of your strategy map. Don’t feel bound by those categories, however.

Watch the ‘3-Minute Crash Course’ about Strategy Mapping (CLICK THE ARROW TO START THE VIDEO):

Looking for the Full-Length Podcast/Video? …

Cause and Effect Map: Creating and Using a Fishbone Chart

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A Cause and Effect Map is a simple tool that can assist you to direct your action when solving problems. Below we discuss:

Why you would use a Cause and Effect Map.
The Five Steps to creating a successful Cause and Effect Map.
The three things to remember when using a Cause and Effect Map.

Why Use a Cause and Effect Map?

A Cause and Effect Map will help you to find and address root causes of a problem, not just the symptoms.
To identify cases where multiple causes for a problem may exist.
A Cause and Effect Map enables a team to focus on the content of the problem, not on the history of the problem, or the differing personal opinions of team members

5 Steps to a Successful Cause & Effect Map:

Create a clear problem statement
Brainstorm possible causes
Draw Fishbone Diagram
Ask Why
Move to Action

Create a Clear Problem or Goal Statement for Your Cause and Effect Map

What is the problem (use specific terms)?
Where has the problem occurred?
When has the problem occurred?
How much? How can you quantify the problem?
Use data wherever possible.
Ensure all participants have a common understanding of the problem statement. Your Cause and Effect Map will be useless if people don’t clearly understand what problem they are attempting to solve.

Brainstorm Possible Causes to the Problem Statement on your Cause and Effect Map

Start with “Green Light” thinking. Your Cause and Effect Map will be much more effective if you generate ideas without judgment at first.
Do in advance or as a group. You may want participants to lend some thought in advance to potential causes, but if can still create an effective Cause and Effect Map by doing it as a group.
Use Post-its. One alternative for your Cause and Effect Map is to have participants write down one potential cause on each of several Post-It notes. This will allow you to more easily group and move ideas between categories.
Put brainstormed causes into potential categories. You can do this either by labeling causes, and listing causes below the label, or conversely they can be grouped into categories, and then create a label based on the ideas contained in that grouping.
Apply more critical or “Red Light” thinking as you are sorting the potential causes into groups.

Draw a Fishbone Diagram and put in categories

Your Cause and Effect Map will begin to take shape when you draw your fishbone diagram, and label the individual “bones”. Here are some standard categories found on a Cause and Effect Map, but don’t feel bound by these:

Materials
Machinery
Method
Policy
Measurement
People
Information (or lack there of)
Performance standards (quality, cost, etc)
Plant or facilities
Training and knowledge
Procedures
Environment

** Customize categories to meet your specific needs of your Cause and Effect Map

If you used Post-It notes, you can stick them on the appropriate “bones” of your Cause and Effect Map.

Ask Why

Start your Cause and Effect Map by looking at each “bone” and asking:
- What else could be a cause?
- Why does this happen?
You will now have a series of causes listed on each “bone”. For each of those causes, you now need to ask “why”.
Continue to ask why for each cause until the appropriate level of detail is reached.

Move to Action on Your Cause and Effect Map

Your Cause and Effect Map is nothing more than a pretty picture, unless you choose to do something about it. In some cases, several hundred causes may have been identified, in which case you will have to prioritize.

Look for causes that appear repeatedly across categories.
Look for causes that occur frequently.
Address causes you can do something about.
Make diagram available after the meeting for further input.

3 Things to Remember About Your Cause and Effect Map

Make sure you clearly state a problem or goal. If you have an ambiguous, or misunderstood problem statement, you will waste a considerable amount of time.
Make sure you’re at the appropriate level of detail. In some cases a Cause and Effect Map may take several hours to complete. In other cases, it can be done in a few minutes. You need to decide the most appropriate level of detail.
Prioritize what action to take. You should focus on one or two causes you wish to address, and leave the others for a later time.

Watch the ‘3-Minute Crash Course’ about creating and using a Cause and Effect Map (CLICK THE ARROW TO START THE VIDEO):

Looking for the Full-Length Podcast/Video? …

Aligning Mission, Vision & Goals

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Many organizations fail to align their mission, vision, goals and strategies. Most often this is because each of these documents are created or revised in isolation of the others. Or perhaps, mission, vision, goals and strategies are something that are looked at once per year, and then successfully avoided until the following year.

The first task when dealing with mission, vision, goals and strategies is to have a clear definition of each:

What is a Mission?

When writing your mission, vision, goals and strategies, the mission statement is your foundational document:

A well-crafted mission articulates why you exist as an organization.
Answers the question, “Why are you here?”
Describes what the organization does in clear terms
Describes the purpose of the organization, product, or service
Your mission does not generally change over time.

What is a Vision

Of the mission, vision, goals and strategy document, the vision is the one that should provide inspiration:

Paints a clear and compelling view of the future.
Answers the question, “Where are we headed?”
It must motivate, be ambitious and stretch people.

Strategies

Strategies provide a pragmatic roadmap of how mission, vision, and goals will be accomplished over time:

Explain how the business will be successful over time
How the company will compete
How the organization will differentiate
What markets will be served.
What opportunities and strengths will be leveraged

Goals & Objectives

Goals and objectives are the building blocks of achieving the mission and vision:

Goals are directly related to vision, mission & strategies
Goals measure progress towards achieving vision, mission & strategies
Objectives are the plan or stepping stones towards the achievement of a goal

Alignment & Sustainment Plan

It is not enough to simply articulate your mission, vision, goals and strategies. You need to do something about it. Unfortunately, this is where many organizations fail.

Once you plan what you need to do, you need the discipline to follow through on that plan.
What actions will be taken? By whom? By when?
How will you hold people accountable?
How will you reinforce and reward?

3 Things to Remember

Don’t make it harder than it needs to be. Many organizations spend a ridiculous amount of time writing their mission, vision, goals and strategies. Sometimes, a few words on a single page can be far more effective.
Any plan is useless unless you execute it. Don’t bother to write your mission, vision, goals and strategies unless you intend to do something about it.
Your documents should be “alive”. Don’t file them away, and dust them off once per year. If you are using these tools wisely, you will use them to guide your activities throughout the year.

Watch the ‘3-Minute Crash Course’ about aligning Mission, Vision & Goals (CLICK THE ARROW TO START THE VIDEO):

Get the Complete ‘Strategy Starter Kit’:

The ‘Strategy Starter Kit’ includes:

Strategy Starter Kit Workbook (pdf, 40 pages) – A series of questions and fill-in-the-blanks that result in your completed Business Planning Document, containing aligned Mission, Vision, Strategies, Goals & Objectives, as well as a Sustainment Plan to ensure success.
‘Aligning Vision, Mission & Goals’ Full-Length Video (approx. 15 minutes) – Audio (mp3) and Visual Slides (ppt) can be downloaded separately
‘Aligning Vision, Mission & Goals’ Cheat Sheet (pdf, 1 page)
‘Mission Statements’ Podcast + Podcast Slides (mp3, ppt)
‘Mission Statements’ Cheat Sheet (pdf, 1 page)
‘The Vision Statement’ Podcast & Podcast Slides (mp3, ppt)
‘The Vision Statement’ Cheat Sheet (pdf, 1 page)
‘SMART Goals and HARD Goals’ Podcast & Podcast Slides (mp3, ppt)
‘SMART Goals and HARD Goals’ Cheat Sheet (pdf, 1 page)

Blacksmiths and Wordsmiths

Have you been down to your local blacksmith’s lately? Unless you’re reading this post through a hole in the space-time continuum, you probably haven’t. Actually, blacksmiths still exist, but they are now a rare, highly-specialized group of skilled workers.

Compare this to the 15^th through 19^th centuries, when a blacksmith was one of the focal points of every community. As our societies and technologies evolved, the skills of the blacksmith became less and less pervasive.

Now compare this to the wordsmith. I couldn’t find any significant history on the wordsmith, so I’ll make something up, and then go post it on Wikipedia. The wordsmith was also around in the 15^th through 19^th centuries, although they kept a low profile. This is because as children, future wordsmiths were routinely beat up by future blacksmiths

This may explain why so many wordsmiths are able to rear their ugly heads (and ply their treacherous trade) today. With the diminishing number of future blacksmiths, future wordsmiths don’t receive near as many beatings as they should to discourage them.

You probably know a wordsmith – although they set-up shoppe in the most unlikely places. The wordsmith is the one who ensures that any meeting that could have been done in 30 minutes, goes for at least two-hours. These are the people who will argue incessantly about subject-verb inversion, and how it may affect the organization’s vision statement.

If you find yourself organizing or facilitating the articulation of organizational goals, strategies, mission or vision statements, you need to root out the wordsmiths early. Send them on a business trip, or tell them there’s a newspaper somewhere that needs to have a letter written to the editor because the sentence structure of a headline was inappropriate.

The bottom line is that missions, visions, goals and strategies are all useless documents, unless they move people to action of some sort. If the wordsmith gets her way, these documents will all be grammatically and politically correct, but so general and generic to the point of being useless.

So… if you have any of these documents, that sit high on a shelf for 11 months of the year, until the dust is blown off them for the next planning cycle, you can blame the wordsmith. To address this problem, you have two options:

Distract the wordsmith long enough to rewrite the documents in a concise and meaningful way.
Hire a blacksmith to take out the wordsmith.

What Gets Measured, Gets Mismanaged

Well, that title should upset a few people – particularly the folks in finance that love their spreadsheets more than they do their children. Don’t get me wrong… I like the idea of measuring things so you know where you stand. My problem is the way in which some organizations execute their metrics.

Performance metrics often provide an excellent illustration of how a really good idea can be made difficult and useless by poor implementation. It’s a lot like watching your favourite sports franchise consistently snatch defeat out of the jaws of victory.

Usually it goes down like this: someone in some position of authority will read the first fifteen pages of a book about measurement. Without reading the following 250 pages, he concludes that his organization needs to get everyone on the measurement bandwagon. Then he strikes a committee, or hires a consultant to go forth and make this happen.

Fast forward in time six months, and a significant portion of everyone’s work week becomes dedicated to counting the number of paper clips they have consumed since last week, and calculating the annual impact of that paper clip consumption. They then have a meeting to discuss how to reduce paper clip consumption, thereby reducing annual operating costs by $48.50, or roughly 1/100^th the cost of the first meeting about paper clip consumption.

OK… that might be a bit harsh. But here are some actual examples of performance metrics gone horribly wrong:

The technology company that measured sales success exclusively on dollar volume at the end of each quarter. THE RESULT: A whole bunch of clients went somewhere else because they were tired of being sold things they really didn’t need.
The grocery retailer that measured check-stand effectiveness by calculating the frequency of cashiers using customers’ names. THE RESULT: the customers went to stores where they measure how much time was spent waiting in line – something the customer actually cares about.
The restaurant owner that attempted to reduce cost by reducing the number of paper napkins provided to each customer. THE RESULT: I don’t know… probably sticky fingers and dirty tables – this one just seemed really silly to me
The lumber manufacturer that measured how much fibre it recovered from each log, as opposed to how much money they made on different dimensions of lumber. THE RESULT: Very few wood-chips, but a yard full of garden stakes that no one would buy (and a whole bunch of trees unnecessarily harvested)

Some people will tell you all that matters at the end of the day is how much money you make. Not true – if you focus exclusively on this, you are in a never-ending cycle of sub-optimized decisions that forbid any long term success. Most obviously, if you ignore safety while focusing exclusively on how much money is make, it is only a matter of time before you injure or kill someone, which beside being ethically reprehensible, is very expensive.

Here’s the bottom line about measurement: The great thing about measuring performance is that people will adjust their behaviours to affect the outcome of the measure. Unfortunately, the really scary thing about measuring performance is that people will adjust their behaviours to affect the outcome of the measure.

So measurement (like other recreational drugs) should be used cautiously and in moderation. Second, you should never have only one number you are tracking. And finally, you need to understand why numbers are trending the way they are, as opposed to (over)reacting to one data point.

Let’s be careful out there.

The Balanced Scorecard Approach

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The Balanced Scorecard approach is a system of measurement, that when implemented properly is brilliant in its simplicity. Below we discuss the four standard perspectives of the Balanced Scorecard approach, and how you can implement it in your organization or department.

About the Balanced Scorecard Approach

The Balanced Scorecard approach was created by Robert Kaplan and David Norton in the early 90s. Kaplan was a professor at Harvard with a background in accounting and finance, and Norton was a consultant that worked primarily in the Information Technology field.

The original article on the Balanced Scorecard approach, “The Balanced Scorecard – Measures that Drive Performance” was published by Harvard Business Review in 1992, and was voted one of the ten most influential articles of all time. Several more articles and books followed entrenching the Balanced Scorecard approach into standard business lexicon.

The Four Standard Perspectives of the Balanced Scorecard Approach

There are four standard perspectives to the Balanced Scorecard approach:

Financial Perspective: How do we look to shareholders?
Customer Perspective: How do customers see us?
Internal Business Perspective: What must we excel at?
Innovation and Learning Perspective: Can we continue to improve and create value?

Examples of Each of the Four Perspectives of the Balanced Scorecard Approach

The Financial Perspective of the Balanced Scorecard Approach

Financial perspective does a lot with profitability, growth, and shareholder value
Tends to look “backwards”
Shareholder Value Analysis is an attempt to help financials look forward
Such things as:
- Return on capital
- Cash flow
- Profitability
- Reliability
- Sales
- Return on equity

The Customer Perspective of the Balanced Scorecard Approach

A complete blend of time, quality, performance and service, which are of more concern to the customer
Benchmarking is sometimes used for industry comparison
Ensures your business is not excelling at something that has no value to the customer
Such things as:
- Quality
- Service levels
- Timeliness
- “Walletshare” of key customers
- % of sales from new products (proprietary products, etc.)

The Internal Business Perspective of the Balanced Scorecard Approach

Business processes that have greatest impact on customer satisfaction
Often measures are “deconstructed” to a local level
This is where information systems and tracking become critical
Such things as:
- Cycle time
- Unit cost
- Yield
- Efficiency measures
- Schedule versus plan
- Safety
- Risk Management
- Loss control

The Innovation/Learning Perspective of the Balanced Scorecard Approach

Incorporates notion of continuous improvement
Setting targets for improvement and continual learning
Measures company’s ability to innovate, learn, and improve
Such things as:
- Time to innovate next product
- Time to market
- Employee retention
- Employee satisfaction
- Employee skill levels

Implementing a Balanced Scorecard Approach

Organizations make a few critical mistakes when they first attempt a Balanced Scorecard approach:

Don’t make it more complicated than it needs to be. Start with the data you have on hand, and refine it as you go along. If you are spending more time measuring your work, than you are doing your work, you’ve got it wrong. The Balanced Scorecard approach is most effective when it is clear and simple.
Adjust the perspective to meet the needs of your department or organization. The Balanced Scorecard approach should be tailored to your situation, however the standard perspectives are an excellent starting point.
Don’t forget about “leading” indicators. When implementing the Balanced Scorecard approach, many organizations have no problem with the financial, and service measures, but when they get down to the innovation and learning perspective, it becomes much more difficult for them. Do your best to find predictive indicators as well as lagging indicators.

If HR Sucks, it’s Your Fault

Here’s a quiz: In my organization HR is/are:

a) A highly professional service provider that partners with managers to maximize shareholder value through effective people management practice.

b) The people who organize our Christmas parties and picnics

c) Where people who couldn’t make it in the core business go to be marginalized to the point where they do a minimum of damage.

OK – maybe HR’s an easy target in many organizations, but if beating up HR is a fun way to relieve some tension mid-day at the water cooler, you really won’t like what comes next:

If your HR group truly sucks, then your organization most likely sucks, too.

Yep, that’s right. I’m suggesting there is a direct correlation between highly effective HR, and a highly effective organization. Furthermore, I’d suggest that organizational managers get the HR departments they deserve. If your HR group is solely administrative in nature, and generally not very high performing, then that is exactly the quality of service you as a manager, or an organization has asked for.

You may like or hate Jack Welch, but it would pretty hard to argue that GE wasn’t a high performing organization when he was running it. Just about any time you heard Welch speak, he would talk about what he was doing, and he’d also talk about Bill Conaty – his HR guy. For GE, the HR portfolio was extremely important. Some other Jack Welch quotes about HR:

“A high quality senior HR person is as critical as the CFO”

HR should “get out of the picnic business”

And his advice to HR people: “Don’t be a victim”

Every organization has its version of the “People are our most important asset” speech, but Welch actually lived it. People will jump all over this, because Welch had an impressive record of firing people. But valuing people necessarily means that you remove barriers to a team’s success, and sometimes this means removing people.

The strongest organizations I have worked with have highly-competent, business-focused HR people. They also insist that every manager in the company is an HR manager. HR is not something that is delegated to a central group – it is actively managed by every leader, every day. The HR group’s role in these high-performing organizations is to set organizational leaders up to be outstanding managers of the human asset.

Picnics and Christmas parties need to be assigned elsewhere – perhaps the marketing department isn’t busy.

HR as a Strategic Partner: Why HR Often Sucks

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HR as a strategic partner is something that many people have written about, many organizations talk about, and few companies actually achieve. Below, we discuss some of the variety of reasons why HR departments fail to become a management strategic partner, but if people really are an organization’s most important asset, then this is a problem that requires attention urgently.

Why Care about HR?

Why should organizations care about having an HR strategic partner? In many cases HR is viewed a necessary evil in a company, and is simply part of the overhead cost of doing business. This is the case in poorly run companies that do not have HR as a strategic partner. There are no world-class companies with weak HR departments. Excellence requires great HR, or an HR strategic partner.

Here are some other reasons to strive create an organization that has an HR strategic partner:

Employees are expensive, and good leadership/management maximizes the value of organization’s investment in people.
Great HR has better firm performance*
- 63% less unwanted turnover
- 400% greater sales per employee
- Over 3 times greater Market Value:Book Value

*Becker, Brian E., Mark A. Huselid and Dave Ulrich, The HR Scorecard – Linking People, Strategy and Performance (Harvard Business School Press, Boston, Mass. 2001)

Top 10 Reasons HR Often Sucks

There are a variety of reasons that people become frustrated with their HR departments. Here are our Top 10 reasons why organizations end up without an HR Strategic Partner:

Organizations don’t know what they want/need from HR. As companies evolve and grow, the focus of HR and what management needs them to do changes. Often, there is no thought given to what are the key drivers of human performance. Being an HR strategic partner requires a clear understanding of what the HR group will do, and what they will not do.
In the absence of clear direction, HR is reduced to arranging picnics and Christmas parties. Because there is no direction from the organization, the HR group ends up becoming a “catch-all” where all the administrative jobs fall into. Once the HR group becomes overwhelmed with useless trivia, they do not have the time or talent to conduct more vital and valuable work. Being an HR strategic partner requires elevating above mere administration.
We make HR the policy-cops. There is no doubt that HR should be involved in the drafting of policy, but their role in enforcement should be that of an advisor, not an enforcer. It is the job of individual managers to enforce policy. An HR strategic partner coaches, supports and advises managers through the enforcement of policy issues.
There is no HR business plan. HR needs to have clear deliverables and measures just like any other business. The HR business plan needs roll out of the greater organizations strategic, tactical and action plans. An HR strategic partner enables the achievement of the overall business plan through superior people practice.
Managers like to use HR as a scapegoat. It’s much easier for managers to tell their people unpleasant news if they can pin it on someone else. Usually the target of such finger-pointing is either higher-level management, or the HR group. In either case it is inappropriate. Managers need to take responsibility for the leadership and management of their human assets. An HR strategic partner is a trusted advisor to getting this done well.
HR is not properly staffed. If your HR group is filled with able administrators, but not people with any real business training or experience, you will not have an HR strategic partner (although your staff picnics will probably be great).
HR reports through finance. The practice of having HR report through Finance is far too common. If you want an HR strategic partner, HR needs to report to the people responsible for executing the strategy. If HR isn’t at the senior leadership table, then it is highly hypocritical to claim that “employees are our most important asset.”
HR people do not know the core business. In order to provide quality, professional advice to managers in the core business, an HR strategic partner needs to understand that core business. It is not necessary to be expert, but there are many organizations where the HR people do not fully understand how the company operates, or how it manages and measures its success.
HR should be a place for high performers, not the company ghetto. If an organization expects outstanding performance from its HR group, it needs to staff it with outstanding people. If HR becomes the ghetto of the organization where we put people who couldn’t make it in the core business, or a place where we hire less than the best to try to meet diversity requirements, you won’t have an HR strategic partner.
HR needs to be better at selling itself, and influencing others in the organization. An HR strategic partner is an influencer more so that s/he is a decision-maker. As such HR needs to become much better at “selling” its viewpoint. Moreover, for organizations that don’t’ know how they should best use HR, it is up to the HR people to define and sell its role in the company.

What’s to be done?

If you find that your organization has an HR department that sucks for any or all of the reasons above then action needs to be taken right away. As a starter:

Have an HR business plan that is attached to the organization’s strategic plan. Without a clear focus, there is no chance of having an HR strategic partner.
Get skilled business people into HR. If you staff your HR department like an organizational ghetto, your results will match. An HR strategic partner is a highly skilled, high-potential human asset.
Get HR to the table. An HR strategic partner needs to be included in all important discussions. If HR’s not at the table when those discussions take place, there is no change of maximizing the value of the human asset, and no change of truly being a high performing organization.

7 Steps to Writing a Business Case

Optimizing Your Business Process Can Be a Really Bad Idea

Strategy Mapping

Cause and Effect Map: Creating and Using a Fishbone Chart

Aligning Mission, Vision & Goals

Blacksmiths and Wordsmiths

What Gets Measured, Gets Mismanaged

The Balanced Scorecard Approach

If HR Sucks, it’s Your Fault

HR as a Strategic Partner: Why HR Often Sucks

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Tools For Busy Managers