What?, should we?, how?

People strategy formation and 3 key questions

When the most strategic businesses focus on People Strategy, three types of questions tend to emerge:

What…?

Should we…?

How can we…?

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As examples, from broad to specific:

What…

·?????? Parts of our business strategy are currently most dependent on effective people strategy and where do we need to shift the dial to deliver significant value?

·?????? Are the smallest strategic HR actions we can take to make the biggest positive organizational impact?

·?????? Frameworks, models or approaches can we apply to help get the best ROI from our investments in people and technology?

·?????? DEE&I initiatives tend to “work” and which aren’t worth the investment?

·?????? Does “work” mean in this context and what has the business, employee and societal impact been of “not working”?

Should we…

·?????? Re-prioritize what we focus our resources on, in HR and the wider business?

·?????? Implement new AI tools in recruitment, coaching and career management?

·?????? Reward for performance? Individually?? As a team?

·?????? Remove our traditional Performance Management process?

·?????? Mandate return to office?

How can we…

·?????? Maximise employee adoption of and/or success of our key change initiatives, both people-focused initiatives and other business change initiatives?

·?????? Ensure more of our talented employees stay with us and grow?

·?????? Ensure our leadership development programs are as effective as possible?

·?????? Most effectively unlock the potential of women in our workforce, increase diversity at all levels and improve the gender pay gap?

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Ideally, answering the “What…” type questions lead naturally to the more focused “Should we…” type questions and then onto the questions of “How?”.?

Tapping into internal and external evidence

Businesses all have their own unique contexts and this means people strategies should be based on an element of organisation-specific analysis and be tailored to respond to those circumstances.? Equally, businesses all employ people as their most costly asset and there can be a high level of commonality in how people respond to certain circumstances across different businesses.? Consequently, businesses can also benefit from the learnings and experiences of one another, including from quality research exercises.? Whilst some people challenges and opportunities are unique to certain businesses, there are many that most businesses need to solve. Unlocking untapped employee potential, making ethical and effective use of AI whilst managing its risks, avoiding employee burnout and controlling people costs and risks are all examples.

The most well-informed strategies respond to both internal and external streams of evidence to devise their overarching plan and inform implementation tactics. ?All good HR leaders know that this means working with stakeholder opinion and reaction, using available sources of data and discussion (however so gathered inside and outside of the business), applying experience, and resisting too much gut instinct!? With the pressures of everyday HR to manage, good HR leaders also know that minimising gut instinct and keeping all strategic action as evidence based as can be is also easier said than done.? It’s incredibly difficult to stay connected to the many different sources of evidence all the time.?

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The external research disconnect

What I have always found fascinating about the process of People Strategy creation, from my consulting days at PwC, through to the expert services and large-scale business transformations I have subsequently led “in-house”, is the frequent and persistent disconnect between HRM research and business practice.? Even for HR actions where businesses repeatedly experience similar negligible or negative impact, there is an almost stubborn resistance to changing them. ?Earlier this year, Negt & Haunschild, went so far as to say:

“A gap has been identified between HRM research and practice, indicating that these two worlds coexist without any meaningful connections”

In the last week a Stanford conference considered the evidence on Return To Office (RTO) mandates, which provoked continued skepticism about whether high profile CEO RTO decisions are yet being made in the knowledge the 2024 research papers that, among other findings, reportedly show RTOs having (i) no impact on future profits or stock returns, and (ii) an association with employee exits and reduced employee sentiment ((12) Post | Feed | LinkedIn).? In a similar vein, earlier this year we saw the UK Government publish the findings of the inclusion at work panel’s report on improving workplace diversity and inclusion (Inclusion at Work Panel: report on improving workplace diversity and inclusion - GOV.UK (www.gov.uk)) which, under the guidance of a Harvard professor, highlighted that “organisations continue to adopt D&I interventions that have been shown to have little or no impact, and in some cases are counterproductive or unlawful”.? ?This preceded the announced “scrapping” of Civil Service diversity jobs two months later, affecting around 400 FTE yet knowledge of the report and findings among professionals seems generally low.? Both the private and public sectors have therefore felt the challenge of keeping up with and applying appropriate external evidence, including research.?

We can go further back in time and find other examples of the disconnect between expert research and strategic HR.? Rynes et al (2002), for example found seven common misconceptions among HR professionals, relating to, for example, staffing, goal-setting, performance management and compensation, that prevented HR professionals from implementing practices based on sound evidence. The disconnect we see today is nothing new.?

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What explains the low usage of expert research?

Experience within organisations tells me that the sheer volume of external research, coupled with the relatively low volume that is seen as good quality, digestible and relevant to HR leaders, has a lot to do with the low usage of expert research.? I have spent the last 9 months immersed in the most recent HR and occupational psychology published research and have judged that less than 10% of papers “pass” when applying these criteria.? Also, surprisingly, there are a very significant number of papers published today that exhibit issues that were flagged as problematic nearly 20 years ago, by Wall and Wood (2005), not least a considerable number inappropriately attribute causality when the research design doesn’t support it (note that this is a separate issue to the challenge of funding which can make it difficult to implement research designs that can determine causality in the first place).? Setting these reporting issues and niggles to one side, some very good insightful HRM and occupational psychology research exists and, where it does, it can be very valuable.? It can play an important role in the questions of “What”, “Should we” and “How”, often giving HR leaders a degree of confidence where they would otherwise have little as a guide, and acting as a prompt to explore whether positive research findings, from one or several businesses elsewhere, would be replicated in the readers own business context.?

While less common, in some cases the sample sizes in external research are so large that even quite simple descriptive findings can be eye opening and prompt transformative strategic action.? I will never forget working for the NHS as Head of Transformation for Talent Management, (a service-wide role across the many hundreds of NHS organisations), and coming across a paper by Sara Connolly and Mary Gregory, based on 74,000 women each year over 27 years, including women in the NHS.? It was published in 2008 but I didn’t come across it until over 10 years later when I took on the NHS-wide role. No one I spoke to had seen it before. ?It reported that 43% of women in high skilled jobs downgraded occupationally if they reduced their hours (a common occurrence for mothers) and switched to a different employer after a career break.? These women experienced a permanently lower earnings trajectory.? 43% of highly skilled women! This research was gold dust.? It meant significant numbers of women could be delivering well below their potential and be being paid well below their potential to match, or could be graded and paid well below their potential but delivering more in line with their higher level capability if their role didn’t constrain them. Where were the fog horns?? This was incredible information.? Why had nobody heard of this?? ?I pieced this together with three other pieces of evidence that I had: (i) there had been promotional/recruitment stories on Mumsnet (with an audience of around 9 million) about it being usual for women returning to nursing to do so at a lower grade than when they left, (ii) nursing vacancy rates were the biggest strategic resourcing concern nationally, and (iii) band 6 nurses are often ward managers and when band 6 roles remain vacant, which was extremely common, wards can be closed, affecting patient care. ??I did whatever I could to raise awareness of the research and how the simultaneous operation of certain practices could be preventing downgraded women from returning to their previous level, and progressing further, frustrating efforts to close resource gaps at hard-to-fill senior levels.? Crucially, I led the strategic steps of a pilot survey of employees (male and female) to reveal who had experienced occupational downgrading and wanted to (i) return to their previous level and (ii) progress from there.? Whilst I feel privileged to have been in a position where I could help unlock such huge potential in what is the world’s largest employer of women in the world, and hopefully influence associated resourcing and patient outcomes, it is concerning to me that it took more than 10 years for someone to read the research, spot the dots, join the dots and take the initial steps in strategic action with the aim of bringing positive change.?

Not only do the worlds of research experts and strategic practitioners need to be closer together and build understanding and trust between the communities, more time and effort must go into connecting dots between research and practices in order that People Strategy can bring about the human and business benefits that society deserves.?

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The internal data challenge and the importance of “How”

External evidence can help People functions know “What” to put in their strategy and help make choices between alternative work practices from a spectrum of alternatives.? Examples of the spectrums that strategic people leaders might be looking at are:

1.????? Work arrangements – from fully remote, to hybrid, to full RTO

2.????? Benefits practices – from basic, to enhanced, to innovative options

3.????? Training – from on-the-job, to bite-sized online, to scheduled in person

4.????? Working hours – from fixed, to core hours, to highly flexible

5.????? Employee engagement methods – from surveys, to crowd sourcing, to 1-1 AI bots

Much less often does external evidence provide enough detail on “How” the initiative should be implemented to bring about the desired impact.?

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Some favorite tools I have drawn on in various large-scale transformation programmes have been from Prosci Europe , the change management consultancy who have created various models and tools based on decades of research into implementing effective change.? The recommended “healthcheck” using the “Prosci change triangle”, for example, facilitates structured conversations with a broad range of stakeholders around the state of play of (i) Leadership/sponsorship for the project, (ii) Project management/the technical side of the change and (iii) Change management/the people side of the change.? It helps foster a positive mindset where the status of each can be recognized, and corrective action can be planned and taken where necessary, to boost the factors that will help lead to successful change.? Strategic people professionals who are using such a framework can, within their own networks for example, share tips on how they managed to successfully achieve each of the factors shown to increase the change project’s success: The awareness of the change among employees, the desire for the change, knowledge about it, the ability/skills to implement it and methods to reinforce it.? For many people practices, the challenge for the strategic leader is not merely to decide what practices they should implement and at what level on a spectrum.? The challenge is also “how”, including constantly and reliably tuning into internal evidence to flex the approach and respond to any feedback.? Sharing stories about these implementation journeys is a valuable exercise for any strategic HR leader and can increase the skill with which subsequent change management is executed and thus the impact of future projects.? It is an important part of practicing evidence-based HR.?

The most successful strategic people leaders employ an evidence-based approach that maximizes the return on human capital investment and delivers for stakeholders, ideally including society. They must be analytical, but not solely analytical, they must spot the dots and be capable of joining them, they must ensure the right strategic choice of models and tools and apply them, they must be deeply rooted in the practical and strategic realities of bringing about change in a business, at the same time as being curious enough and dedicated enough to look outward and seek external information, including the stories of peers who have been on the journey they are about to embark on.? To see EBHR as something that goes on largely in the people analytics team, as is sometimes the perception, is to miss the importance and breadth of evidence on which successful people strategy depends.? EBHR is about research, curiosity, experience, story-telling and scar-sharing.? It must be front and centre of the CHRO mindset.?

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