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The Great Planning Debate

Pick out one business — not HR — problem you can solve. Pull the data together and execute.

June 6, 2010
Related Topics: Technology, Performance Management
Recently, I put out a question on Bill Kutik’s LinkedIn network. It was a simple query: “Workforce and succession planning: Do you think it is for real? And, if so, what makes you say HR people are building planning systems that have intelligence and go beyond head count?”

Apparently, I hit a nerve. Within three days, more than 60 people chimed in. The debate quickly shifted to, “Are HR people strategic thinkers — business planning — or program administrators — service delivery?” Two opposing camps formed immediately and kicked off a spirited debate.

Two Camps

One group took the side that a number of HR folks were in fact actively trying to apply strategic thinking and planning. Of those, only a small percent have succeeded due to resistance or apathy from top management. One of the major barriers was lack of good data. The other was a focus on HR, not the business.

The other camp took the position that since HR traditionally has not collected data much past head count, it doesn’t have a base from which to make a case for the business value of planning. Essentially, HR does not have the sales skills or the toughness needed to overcome resistance.

In the discussion, vendors and consultants took some heat for pushing products as opposed to educating and guiding clients on the finer points behind data analysis and presentation. One vendor, whose company has many honors for its analytic products, fired back that he had never met a group with such a low aptitude for strategic thinking and analysis.

So what is a person to do?

Data School

Whether you are content to administer HR services or you aspire to be a human capital strategist, you need to have command of quantitative tools. Yet, very few, if any, math majors seek a career in “personnel.”

To offset this deficiency, a growing number of departments are bringing in people with finance, production or market research backgrounds. You don’t have to be a stat master to manage it. But you do have to be able to think beyond tomorrow’s lunch. If analytic thinking has a back seat in your management wagon, surround yourself with people who are good at it.

Do what some market leaders do: Hire people with psychology, anthropology, sociology, philosophy or marketing knowledge. These are skills deep in right-brain processing and visualization, the abilities that good strategists have.

Show Me the Money

Team up the stat folks with the right-brainers, and lay a strategic question on the table for them. Here is today’s big problem: With a major exodus of baby boomers in the next decade, what effect will this have on production, marketing and sales or customer service? HR tends to think only of numbers of people to be hired and trained. But effects on the business are what a business manager thinks about: loss of sales, denigration of service, lack of competitive products. See the difference?

Here is a true story from my experience as an HR director. When I audited our worker’s compensation account, I found we were paying too high a rate, and the insurer had tens of thousands of our dollars in its account as a hedge against future payouts. Given our business, only a massive catastrophe could ever eat into that. I negotiated a rate reduction and a refund. I went to the CFO to show what I had done. He said, “Thanks. That is 3 cents a share you just added to our profit.” Get it? Earnings per share, not numbers of things processed.

Get the Data You Need

There are products on the market today that can calculate the outcomes you need to sell management. I know one that collects basic HR and financial data, runs a combination of accounting and statistics under the cover and spits out three dozen cost savings and profit projections for up to five years ahead. This solves the two basic problems blocking value-adding HR programs: poor data and business impact.

The lesson is to start with a small set of standard metrics that everyone agrees to, understands and are available. Pick out one business — not HR — problem you can solve. Pull the data together and execute. Report the results, and you begin to build credibility for larger planning systems.

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