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[Music] hello and the warm welcome I'm armed interest professor at the football and university in Germany and this is my series on human resources strategies a real master course for advanced HR students professionals and executives this series is available on youtube and on all pot catchers like iTunes or Spotify all slides that support this series are available on my website for more information please read the description to this youtube or podcast I'd also like to refer to my book human resources strategies available at most online bookstores so again thanks for listening have fun and gain valuable insights into that fascinating world of a chart strategies [Music] so let's assume you are a regular employee in a regular company whatever it is you are an engineer you are a lawyer you are a Salesman say it's women you are a nurse you are whatever right and I ask you what is your first thought when thinking about HR Human Resources what is your first thought what comes to your mind all right I had the chance to to ask these questions to to hundreds of people in the last 15 years since I am a professor for instance in my MBA courses the master courses I asked this question in the beginning of my course and in this round I meet people from all over the world really it's a very international group I meet people from various professions I have engineers lawyers everything of different ages and all of them are professionals they are all experienced and then I ask exactly this question what do you think of HR what comes to your mind and you know that the last thing I hear as a response is something like oh yeah oh that's that's their very cool I mean HR that's that's the probably the most important function in any organization right I mean yeah that's about people you know it's about people and our business is about people it's about their creativity and their capabilities and their motivation and that's why HR is so incredibly important I don't hear this I hear this sometimes and probably decide that the person who says this is an HR person well I don't hear this what I hear very often sounds bit more like this uh yeah HR let me think yeah well in my organization I was working with there was also on each our department I suppose and yeah well I I don't have too much experience with what they did yeah of course I had to deal with nice colleagues from the HR department during the recruiting process I guess there were one person in the interview did not say too much well yeah in the beginning I had some I had to share some information with HR and that was not so much what I also hear sometimes is something like this Oh HR my organization you know yeah yeah yeah we have an HR department and what they do is crazy I mean what they do is they run employee surveys so we were supposed to respond to satisfaction questionnaires every year where I'm being asked about my satisfaction about a lot of different things but actually I do not know what happens to the results I guess we were asked to do some workshops with the results but in fact I've never seen them so that's HR I sometimes hear something like this up yeah HR I remember that one time HR came across saying we have to do this performance a bracelet every year they wanted to do this well yeah so we did yeah because there was this rule don't mess with HR so we did it but did not work out more mess was ridiculous okay we did it and no it's always happy and keep HR happy anyway HR department this our it's a department where you have nice people mostly women love to go there it's nice something like this well that's uh that's bad you know that's bad and and really I I recently had a little debate with a great Dave wheeler here and he he shared with me his empirical evidence saying that the competence is after HR department to constantly grow and he also assumed that the if I got it right that the acceptance of HR is constantly growing I don't see this really yeah I don't see this well what I share here is not an empirical evidence it's just what I hear from hundreds hundreds people I were asking over the course of the last 15 years well that's not really valid I know so so to sum it up what I hear very often is HR is seen very often as a administrative function it's about administration and it's our administration of course deals with the daily operational issues and topics all around people in your organization so when we think about these daily operational things of course we think about payroll for ins make sure that the people get their salaries on time and in a correct way making sure that the people the the the new hires get their job offers their contract or whatsoever if you if if somebody quits you you prepare the reference letter if you fire somebody I mean that might be an administrative process so there are a lot of things to be done in a very operational way and properly this is where HR came from a time when we when we named it personnel right and then and this is of course important I mean somebody has to take care for all this stuff and you know it's absolutely sure so this is HR administration but before I progress and talk about HR strategy I would like to make something clear here when we talk about HR in this series I do not talk about the HR department it this is not this is not a series this is not a course about HR department not at all yeah of course there might be an HR department but that's not the point here H R is not a department HR is how do I name it it's it's it's it's a bundle of of activities and strategies and things we do of course along with certain priorities but the responsibility for Human Resources is not primarily or mainly in the hand of the HR department that must not necessarily be the case and we will talk about this over this series I mean let's have a short example here but let's assume there is an employee in an organization maybe you yeah and you want to learn something I would say yes that's great idea better you better learn learning is good especially these days and it's a fast changing world so you better learn that's cool yeah learn so okay learning professional learning who's responsible for that is that the HR department I mean you you might say yeah yeah yeah that's about learning learning is a people thing so it's almost be responsible so I knock at the HR department store ask hey guys hey I want to learn something so what do I have to do and yeah maybe in some companies that works that way but but I see many companies the majority of companies don't handle it that way you want to learn okay go ahead and learn take over a responsibility for learning you as the learner you are responsible for your learning it's your job it's not the HR Department's job and this can go on and on and on we gonna talk about this so HR is not the main responsibility of the HR department so let's put that right here okay so and then this entire series will not be about HR administration not at all I mean this course is named HR strategy so what we will not talk about here is how to create job ad we will talk about it in the context of employer branding inmates would make sense but that's a strategic point of us as you will see we will not talk about how to create a job offer we will not talk about how to organize an interview we will not talk about how the pay slip is supposed to be structured or how to read a pay slip we will not talk about this we will not even talk about things like labor law or something like this but not at all we will only talk about strategic things strategic so now comes the question what does that mean being strategic in HR why is that strategic HR that's a that's a important question and I I would like to clarify this in this very first episode what makes a CH oo strategic what is the strategic side of human resources management well I've mentioned already HR administration is about the daily operational issues and topics related to people what is HR strategy it's a strategy affects the future business of the company yeah got it right it affects the future business of the company it affects its competitive advantage its competitive position in the market it affects its overall strength that's what HR strategy is all about of course its long term of course it's big yeah and it does not change daily of course and decisions upon it all strategies are very often made on the top offer of organizational hierarchy very often even though they are decided upon democratic procedures might be but you know so HR strategy again is also about people yeah but it's about all those things that affect the future business of the company now that sounds weird that sounds a little bit like you know this typical MBA stuff yeah yeah but let's let's be specific let's be specific in and in the next few minutes I would like to share with you some some real cases some really separate some real cases that I've found when working with companies and let me start with the first one okay and it goes like this there is a small and medium enterprise operating as a supplier in the automotive industry you talk about three and a half thousand employees this enterprise is desperately looking for software developers and they want to hire software developers they need them because digitization you know relying on chop adds only doesn't seem to lead to expected results anymore engaging an executive search consultants II turns out to be cue expensive what to do do you see the case do you see it I mean I mean really when I share this case with companies most of them these days would say yeah that's my case it's that exactly describes my problem in in some companies it's about software developers in some other companies it's about nurses about truck drivers about teachers about engineers about doctors ah here we talk about talent shortage and talent shortage affects the future of a company's business I mean look at look at various studies that were conducted in the last few month around the club when CEOs were asked okay what are the major limitations for your business most of them say it's the shortage of talent isn't that something that affects your business isn't that a big question isn't that something that is supposed to be solved by any mean yes of course in in and this is not something where we talk about daily operational administrative things no not at all this requires a big answer okay this is strategic so here's the next case in recent years a company had to deal with an increasing turnover among its most talented and most motivated people this company obviously has a retention issue further research and discussions made clear that there is a lack of career prospects among most talented employees you can imagine this and and very often my MBA students report the same thing they don't see perspectives for the career in their own and in their own company at the same time key positions mainly have been filled with external candidates what to do now look this this is a problem this is a problem and we're going to talk about this more intensively when you lose your most talented most qualified most motivated people you have a serious problem really and as we gonna learn over this series we know that the top 10% of your employees provide a significant extent of total contribution if you lose them you are in serious trouble and and and here's the thing now very often the the very talented people I mean they want to grow every talented person wants to grow wants to to leverage his or her talent they want to see a perspective of course and if they don't see it and at the same time see that the company is constantly hiring people from the outside you might leave because every time a company hires a person from the outside for a senior position this is a loud and clear message to the existing people you are not good enough and how many times do you as a talented person want to hear this how many times do you want to hear that you are not good enough I mean that's a serious problem and if if a company is facing exactly this case and I saw it all too often many companies they obviously don't have something in place what we named a systemic talent development program or system or however you name it they simply don't care okay what you do really what to do that is crying for action I mean you could you could you could pass now for a minute and think about okay well what do you what would you propose now what would you propose what is it so okay so here is the case number three the new externally hired CEO at an insurance company became instantly aware of the lacking ambition and tri for performance in almost all areas and functions that sounds traumatic right not so ambitious workforce a strong appeal to all managers and employees probably might not be enough yeah the company is thinking about a new kind of performance management system does this make sense if yes how could it look like I mean yeah I mean if you have a little bit experience practical experience and you know what this case is all about that's very often the case that that in a company ambition level is low performance is low the people follow ah this is not my job mindset they just stick to that job description are not really hungry for success are not really hungry for growth so you miss innovation you miss new ideas you you miss everything and and and that's bad and that sometimes could be a matter also off the culture and sometimes I also personally can feel it when I when I deal with companies I have this feeling well these people are not hungry they are not really driven and in in this case the newly hired CEO instantly see this and and and now this is crying for a solution and of course many companies think about performance management system what is a performance management system we're gonna talk about this extensively a performance management system is something where you constantly agree on objectives really okay why do we what what do we want to achieve in the upcoming weeks month years and what is your role on this John what are your objective what is your specific contribution and it's not only that we define these objectives that we agree on them we're also gonna track progress constantly and you better meet expectations because if you don't you're gonna face some serious personal trouble so performance management is a system that tries to align the people individual contribution towards overall goal it has its roots in something that we're also going to talk about like something like management by objectives okay now here's the thing if you as a company thinking about a new performance management system okay you can you can just take a textbook and do it as it is described in the textbook or you could look at your competitors and ask yourself okay how are they doing these things and then you simply copy it okay good luck with it good luck with it probability is high that whenever you develop a performance management system it probably won't work as we have seen since many decades in hundreds thousands of organization writes it's sometimes tragic yeah most performance management systems don't work so the question is okay if we need to do something and let's agree this company needs to do something what is the right way of going what might be the right strategy is it more this kind of performance management system or that kind of performance management system or is it is it is it is it about a performance management system anyway what's the prob what is the problem what's the real problem that's the first question what is the problem what are the reasons for lacking ambition hmm maybe you don't need a performance management system maybe you need something else maybe you need a new CEO again so it's not so easy and again this case is big and the problem is big and again this is not about HR administration not at all that's a big problem and that big problem requires a bigger strategic answer okay so here's the final case a company in the retail sector sees a decline in sales and is continuously losing market share the new corporate strategy now consistently focuses on digitizing the supply and distribution channels as well as all related business processes an analysis has shown that the workforce has little knowledge of digitization and is rather reluctant to deal with this topic what is to be done that's our last case for the moment again you these days you you see a lot of companies out there where at least the executives have understood digitization really matters if you don't digitize and then then you you become obsolete maybe whenever you talk about digitization in your organization the response is come on digitization you know come on that's nuts nuts not the real thing and the people are worried they're worried that they that they lose the job they are worried that they have to change the job they're worried about the the need to learn new things and they are worried whether they can really can cope with the new situation that they can keep up with this fast development and of course they are assistant I mean not everybody of course I'm sure but but maybe a vast majority and this is a problem this is really a problem a serious problem if you we if this company in this case if this company does not overcome this particular problem then this company is in serious trouble so again this is not administrative not at all this is about people and this is about strategy so this one again requires a powerful human resource strategy and you know we're gonna talk about all those cases and many more and and in this series I will I will guide you step wise through through through through the different steps required to develop an HR strategy we're gonna talk about all those things and you will see it's very very fascinating sometimes a little bit complex but but still very very cool and you can do a lot of things right also as as the HR department now yeah you can contribute so much really I mean really but at the same time you could do so many things wrong and you just have one bullet very often if if you look at one of these cases I just be sharing if you if you trigger the wrong bullet or if you one single bullet does not meet the goal you you will not be asked twice so you so you better be right in the first place okay so this is I hope that that these cases along with the explanation of the difference between HR strategy and HR administration you get a little bit an idea about how HR could be strategic and now for for every course in particular for any for any academic course I have to start with a with a little definition yeah this is how courses like this are supposed to start and I would like to give you a little definition on what is an HR strategy okay and I I will walk through through a definition stepwise and and let me first read it to you I have to read it by myself actually I don't I don't know this definition by heart didn't I do my homework so I just read it and then I will walk through this stepwise and will explain it and in the end it gonna be clear to you sure so so here's the definition about HR strategy our company's HR strategy refers to all people related approaches that address both strategic business challenges and purpose in order to strengthen a company's competitive advantage moreover the HR strategy defines how all critical approaches are aligned to the structural and cultural context so that was big and probably you didn't get it right away I mean of course it's long and ugly definition so let me walk through the step wise so the first part of the definition is it's a company's HR strategy refers to all people related approaches I mean people related that's clear that that's the human part right it's about people related approaches what is approach the things that you do okay approaches the way to do things right approaches companies HR strategy refers to all people related approaches that address both strategic business challenges and purpose okay this is the business part and of course we'll talk about business challenges business purpose why is the company there what is the ultimate reason why the company exists and all those people related approaches must address these things otherwise they are not strategic okay got it okay so let's go further so we're already agreed all approaches that address both strategic business challenges and purpose in order to strengthen a company's competitive advantage that's the ultimate goal okay and that's the ultimate goal the HR strategy is about strengthening companies come relative advantage being good in the market being better than competitors that's your ultimate goal okay moreover the HR strategy defines how all critical approaches are aligned to the structural and cultural context the context the context matters so what we're gonna do very intensively is we're gonna look at different things you might do in your company to strengthen competitive advantage but the way how you do it that must fit to your structural context and to your cultural context that's absolutely necessary and that might that might sound a little bit weird or vague vague better word a little bit vague now in the moment but I promise you in the end of this course you you you will understand he will clearly understand what that means the same approach might work one in the same approach might work in one company but not in the other but in which way so you you have to make strategic decision upon how you do your talent development if this is a necessary approach how you setup your compensation strategy you have to make strategic decision and and and and the way you do things really depends on who you are as a company how you are in structural terms and how you are in cultural terms in and we will have a couple of episodes where we just talk about the context really okay so that was the starter for today and I hope that you now take home the difference between HR strategy and HR administration this course will be about HR strategy and based on these few as I was sharing with you I hope that you got a little bit in understanding what that actually means and and it's serious yeah really it's serious I hope that you understood this so that was the first thing and in the next episode I will start talking about common pitfalls when building an HR strategy and it will be a good start a funniest thought maybe talking about the big pitfalls first hope you can enjoy so see you [Music]