HR Leads Business

Nov 3, 2021 | Dave Meginley, aPHR, GPHR, HRCI Chief Revenue & Learning Officer

Traditional vs. Strategic HR: How to Guide Your Business into the Future

There’s never been a better time for HR professionals to embrace their role as business leaders and drivers. The divide between a traditional vs. strategic HR function can be the difference between successful businesses becoming complacent or raising the bar to achieve ambitious long-term business goals.

DARE Worldwide CEO Rita Trehan recently joined us on Achemizing HR to share insights from her research into the state of leadership, purpose and culture. What she discovered was startling: The research found company leaders say that 85% of current performance indicators are unreliable measures of future growth.

Here’s how shifting from a traditional to a strategic HR function can support your company’s long-term success.

Identify the True Performance Indicators

Before HR management can step up, we need to understand the true drivers of a business’s strategy. During COVID, most organizations performed well in three areas:

  • Providing access to data and resources to do the job.
  • Adapting operations and accelerated adoption of new technology.
  • Solving employee problems through effective communication.

But these don’t truly indicate a business’s growth potential. For example, good communication is always essential. But to be strategic, communication must move past the traditional approach of simple information flow to gathering and sharing new inputs.

According to Trehan’s research, the top three indicators for future performance are:

  • Improving how the organization carries out its purpose.
  • Continually innovating new products, services and ways of working.
  • Utilizing new sources of metrics, trends and insights.

HR departments are in a position to step up and improve these factors driving future performance.

Move Beyond the Basics

In general, this is a time when many businesses have been so focused on addressing current challenge that it’s easy to lose sight of what comes next. Trehan’s research shows that employees believe their companies have weathered COVID successfully, but these respondents also admit they’re currently staying in their comfort zone. That’s a problem. The areas companies focused on during COVID aren’t what companies believe will really improve future performance. For example, leaders today are focused on expediency. The research shows, however, that expediency will have a limited impact on performance over the next five years.

“What they really need to be thinking about is purpose, connection and collaboration,” Trehan says. That’s what people are actually asking for, and what leaders believe will impact long-term performance.

Unfortunately, while leaders understand what is necessary moving forward, too often they aren’t actually taking those steps. “There’s a massive gap between what is known and what is done,” Trehan says.

Strategic human resource management practices can begin to fill those gaps, so insights are actually implemented.

Learn the Difference Between Traditional vs. Strategic HR

Employees need a sense of purpose. Too frequently, they aren’t getting that from their leaders. They also need connections that go beyond basic communications with their peers. Indeed, they should collaborate with them. Strategic HR can help fill these gaps, ones operational leaders may not be equipped to fill.

Start by reflecting on your company’s current state. Do employees understand the company’s purpose? Are their goals and actions aligned with the larger business strategy?

Think about what you’ve learned from pivoting during the pandemic, too. COVID probably highlighted silos, for example, or how quickly your workforce can adapt. What does that tell us about what we were doing before, and what we can do differently to envision a new workplace? Also, remember where the business was five years before the pandemic. Back then, could anyone have predicted our new reality? Remember just how radically things can change whenever you find yourself getting too set in your current ways.

Traditional HR is transactional and reactive. It’s time for strategic HR to step up and lead our companies to long-term success.

Watch the recording for recertification credit.