Holding Strategic Conversations with the Business: HR Leaders Share Their Insights
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Holding Strategic Conversations with the Business: HR Leaders Share Their Insights

June 14, 2021 | Report

The ability of senior HR leaders to initiate and manage strategic conversations is becoming a critical skill, requiring a comprehensive understanding of the wider business and a perspective that extends well beyond their functional expertise.

Strategic HR conversations should fulfill several important roles, most notably challenging assumptions, predicting outcomes, diagnosing problems, taking the temperature of the organization regularly, and prescribing actions which add value to the wider business. The arguments need to be supported by an extensive use of rich HR data to be credible. Successful strategic conversations entail candor, the ability to suspend judgement and openness, which collectively trigger new ideas and enable trade-offs to be weighted and decisions made.

This report draws on focus group discussionspart of the Next Generation HR research by The Conference Boardand off-the-record interviews conducted with senior HR leaders specifically for this report. [1] Strategic conversations are at the core of HR’s ability to be a proactive and challenging partner to the business, as one executive explained:

“The most important perquisite is to acquire an understanding of how the business works. If you don’t have this understanding, it is very difficult to have the right kind of conversation.  What are your customer needs? Who is the competition? What is the market landscape? How do you make money? What are the things that help you make money? What challenges do you face at a market level? This is where the core of strategy decision making lives. If you do not understand these dimensions, it is very difficult for you to connect with the conversation. You can’t really make the right challenges.”

Insights for What’s Ahead

  • Strategic conversations are critical for companies undergoing any kind of business transformation. The ability of HR senior leaders to hold high quality strategic conversations with the executive committee and senior operational leaders is key to ensuring the people strategy stays aligned with the changing needs and priorities of the business. This skill will ensure the long-term future and relevance of the HR function. If HR leaders are not equipped to support and lead business transformation, they will find themselves sidelined by leaders from other business functions or trusted external partners, such as vendors and professional service firms.
  • Skillful strategic dialogue is a key enabler for transforming HR functions to create value. Emerging new HR operating models are seeking to dismantle functional silos in favor of more nimble, blended HR teams that can quickly “flow” to where they are most needed.[2] Deploying in this more fluid and strategic manner depends on wider and deeper understanding of organizational priorities obtained through strategic conversations between HR senior leaders (not just HR business partners) and other business leaders.
  • Senior HR leaders skilled in strategic dialogue are likely to become a valuable talent pool for sustainably run businesses. Such HR leaders tend to engage a range of stakeholdersglobal and regional leadership teams, vendors, and suppliers, works councils and employee groups, local community partners, regulators, analysts and investors, etc. Their skills in stakeholder relationships will make them valuable sources of talent for companies that are transitioning to more sustainable models and that need to engage a wide range of stakeholders to manage their economic, social, and environmental impact.
  • There is a shortage of HR leaders with skills in strategic dialogue. Developing this expertise requires exposing HR executives to a broader array of business contexts. The art of strategic conversations is not easily taughtinterviewees suggest that this is a hard-won skill, requiring time, experience, and maturity. While some basics may be covered in a HR curriculum, the next generation of HR talent will need more intensive development opportunities, such as coaching and mentoring, and carefully designed, stretching work experiences, which expose them to new business contexts and challenges.
  • Senior HR practitioners need to “earn the right” to converse on a strategic basis with decision makers from the wider business. This will not result purely from seniority, functional expertise, or existing status but from interventions that demonstrate an understanding of the market forces that shape the business, the intricacies of the company’s products or services, the perspectives of key stakeholders beyond HR and the capabilities and strategies of key competitors.

AUTHORS

MarionDevine

Principal Researcher, Human Capital, Europe
The Conference Board

MichelSyrett

Senior Human Capital Fellow
The Conference Board


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