organizations. They conceptualize and execute organizational change.
Another study by Mercer Consulting concluded that 39% of CEOs surveyed
see HR as more of a partner than a cost center: Yet another study, of 447
senior HR executives, focused on the extent to which HR had been involved
in executing mergers for their companies. Mergers in which top management
asked HR to apply its expertise consistently outperformed those in which HR
was less involved.
Yet one recent survey of 1,310 HR professionals found that, in practice, only
about half said senior HR managers are involved in developing their
companies' business plans. A survey by the University of Southern California
found that about one-fourth of large U.S. businesses appointed managers
with no HR experience as top HR executives. Reasons given include the fact
that they may find it easier to give the firms HR efforts a strategic emphasis.
They may also sometimes be better equipped to integrate the firm's HR efforts
with the rest of the business. So in practice, HR managers don't appear to be
as involved in strategizing as perhaps they should be.
As HR managers do assume more strategic planning responsibilities, they will
have to acquire new HR skills. This does not just mean technical skills relating
to activities like selection and training. HR managers will need "an in-depth
understanding of the value creating proposition of the firm." How does the
company make money? What activities and processes are most critical for
wealth creation as defined by customers and capital markets? Who in the firm
executes these activities successfully?
HR's Strategy Execution Role
Today's HR managers fulfill two basic strategic planning roles: strategy
execution and strategy formulation. Strategy execution is traditionally the
heart of the HR manager's strategic planning job. Top management
formulates the company's corporate and competitive strategies. Then, it
formulates broad functional strategies and policies. Like the riverbanks for a
boat steaming up a waterway, the firm's functional strategies and policies set
the broad limits that determine what the functional manager can and cannot