Month: June 2014
Aside Posted on Updated on
“Strategy is always linked to risk. We could say that risk is the other side of strategy coin. For each strategic objective exists a strategic risk. But even if many different methodologies and approaches are focusing on improving the risk management or on improving the strategy management, none of them clearly offer a solution for linking both management processes.
At ACSA (Airport Company of South Africa), we were using an ISO 13000 framework to manage our risks, and the balanced scorecard methodology to track and execute our strategy. But, again, both processes were not talking to each other. Therefore we have been working on linking both strategy management and risk management processes, and we came out with the following 3 steps approach:
The first phase consists on identifying, for each expected strategic outputs:
- the strategic objectives: they are the strategic input that ACSA has to be achieve in order to obtain those expected strategic outputs. They answer the question “WHAT do we need to achieve?”
- the strategic initiatives: they are the strategic projects that ACSA has to implement in order to reach the strategic objectives. They answer the question “HOW are we going to achieve those objectives?”
The second phase is about identifying the key risks for each one of those strategic objectives and strategic initiatives:
- Risks related with strategic objectives: we ask ourself “What if we don’t achieve this objective?” “What could happen?”
- Risks related with strategic initiatives: we ask ourself “What can go wrong in this initiative?” “What can be the consequence?”
The third and last step relates more with a classical risk management process: risk identification, description, control, rating, treatment, etc.
You will find in the slide-share below some details and illustration of this breakthrough link between strategy and risk management processes”
Wasfie Ismail, Group Manager – Strategic Planning at ACSA
Aside Posted on Updated on
The 4 common pitfalls 90% of organizations make, and what you can do to avoid them
By Fares Hillo – Consulting Manager – at ShiftIN Partners.
This article is an abstract from the whitepaper ‘How to bring HR to the Strategy Table’ co-authored with Carlos Guevara, Partner at ShiftIN Partners that will be published in June 2014.
We’ve all either heard this complaint before, or said it ourselves; “HR isn’t supporting the strategic growth of our organisation”.
In fact, the very first line on Wikipedia’s page for Human Resource Management is: “…a function in organizations designed to maximize employee performance in service of their employer’s strategic objectives”! Isn’t it strange then that so many organizations and the people within them feel the same about their HR function? We’ve all become accustomed to playing our role and almost working in silos. Your average employee rarely gets a chance to see the bigger picture, even if they ARE part of the ‘core business’. Imagine this problem in a government entity where bureaucracy rules supreme…
HR is no different. Actually, it may be worse. As a support function, they are expected to deal with ‘managing’ the employees and not interfere with their ability to carry out their responsibilities. But in the dynamic landscape of 21st century business, a function – certainly one as critical as HR – can’t afford to turn its cogs without realizing that the machine it’s turning is an uncoordinated mess.
Yet HR doesn’t sit on the strategy table.
Your typical well rounded strategy includes a neat section about ‘organisational enablers’ – nice and clear somewhere at the bottom of your strategy, ‘driving’ the core business above it. The problem with this is that it still keeps HR at arm’s length. The organisation see’s that HR has its part to play, and HR sees the same thing, and everyone understands what they have to achieve.
But what about truly embedding HR in the heart of executing the strategy?
This has been a common failure in most organizations, and while many have mature and ‘evolved’ strategy know-how and capabilities – they still struggle with bringing HR onto the strategy table. Many of the fixes require a deep analysis into the culture and operations of the organisation in question, but there are some pitfalls that can be easily avoided with a little careful planning and approach. So consider the following:
PITFALL # 1: Is your HR planning calendar synchronised with the Strategy Calendar?
The other day when I was discussing the strategy with one of our clients, we finished the discussion agreeing that we needed to invest in growing the sales force in order to tackle some of the untapped opportunities. After reaching this conclusion we felt relaxed, until somebody raised her hand and said: ‘but we have already defined our manpower plan for next year, 2 months ago!!
How do you know that something is not working well? Look for the following symptoms:
HR asks departments to define their manpower needs for next year before these departments have had the chance to review their departmental strategies.
The strategy department doesn’t involve HR during the strategy formulation process.
Similarly, HR doesn’t involve Strategy Department when updating their HR plans.
PITFALL #.2: Competency management is not aligned towards the strategic outcomes
Let’s say that you have a successful restaurant and, after a strategy session with your shareholders, you have envisioned transforming your restaurant into a franchise that offers a brand new value proposition to its customers. Do you think your future company will require the same competencies that you see now in your staff, or will different capabilities be needed to deliver this value?
You know that you have this problem if you perceive the following symptoms:
You have a competency framework but it reflects the competencies needed in the past but not those needed in the future.
You have a competency framework but you lack the tools to measure the proficiency levels and accurately identify the competency gaps.
You are able to measure the competency gaps but your training plan is unable to address them.
Or, you don’t know which competencies your strategy will need at all!
PITFALL # 3: Personal Objectives not connected to Organizational Objectives
Research shows that the vast majority of managers believe that individual objectives are helpful to determine task importance, yet how many times have we heard managers complain about the bureaucratic, template-filling exercise that objectives setting has become? Their solution is to simply recreate the basic core responsibilities of their employees, based on the job descriptions, as their personal objectives without any kind of alignment with the corporate and function strategies.
How do you know if you have this problem? Look for the following symptoms:
Personal goals are not aligned, and sometimes contradictory, to the organisational strategy.
Managers are not required to provide justification (in the form of strategic contribution) when setting personal objectives.
There is low level of engagement from managers while setting objectives and providing coaching and appraisal. They don’t seem to see the value in doing it…
PITFALL #4. Rewards system doesn’t incentivise the right behaviours
Last but not least. HC frameworks should foster the right organisational culture to enable the strategy. One of the key aspects of shaping the right culture is the incentives. The way an organisation rewards its employees has a tremendous effect on driving behaviors, and ultimately performance.
How do you know you have a misalignment between culture and strategy?
You strategy says one thing but your culture says another (Nokia disease).
HR doesn’t have a proactive process to incentivise the right behaviors.
Culture is an intangible that nobody actually manage.
The Values in my organisation are nice words on a wall but I don’t feel that the majority actually.
So what can you do differently tomorrow? Where should you begin?
Start by breaking down the walls separating HR from the rest of the business, and bring them closer to the heart of your strategy planning. Don’t let them be the afterthought, which you expect to ‘react’ to solve the business’ challenges once all has been said and done… Instead make them a proactive part of your core team of strategic thinkers.