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Strategic Planning Ebook HR 2018 1
Strategic Planning Ebook HR 2018 1
Building a Successful
Strategic Plan for
Human Resources
© 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner,
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Use this guide to:
Build theaAI
Building Business Case
Successful Strategic Plan 2
Contents
21.9
roadmap for creating their strategic plan.
10.1
One VP of Strategic Planning sums up the frustration for
strategists: “We burn a huge amount of hours and our
strategic plan hasn’t helped advance strategic initiatives.
It hasn’t protected against disruption. It hasn’t really
done anything.”
n = 464
Source: Gartner
As you head into strategic planning season, the following 66% of marketing leaders have
pages outline what you need to know and do to increase your updated their strategies, but just
chances of success. 13% have seen results.
This guide provides a number of function-specific tools and
templates to help with execution. However, as most functional
leaders share the same opportunities and pitfalls in strategic 81% of finance functions have
planning, we also share insights from across the enterprise to recently redesigned their structures,
provide lessons learned and best practices beyond a single but only 30% of these projects
function. delivered forecast benefits.
Start by outlining the responsibilities, Business-Unit Leaders Provide input on business strategy and the function’s
process timelines and expected performance.
outcomes for each participant.
Other Functional Leaders Provide input on the function’s performance.
Provide process and activity-level input.
The aim for functional leaders is to: To ensure strategic alignment, functional leaders should first
check in with business leaders on the business’ mission (its
Align the function’s objectives to business priorities reason for being) and vision — and its future aspirations and
underlying values.
Create a prioritized list of executable, measurable goals
Without a clear understanding of the business vision,
Nurture organizationwide commitment to the function’s
functional leaders cannot begin to design and set their
ultimate strategic plan
own aspirations.
The biggest potential pitfalls are that the
functional plan:
Is misaligned with business priorities “If the vision is weak or unstable, goals
will be imprecise, internal conflicts will
Lacks follow-through
emerge and strategy will stall.”
Get Feedback From Your Business Leaders “We could not have created the plan in isolation. This has to
be a collaborative effort that ensures HR contributes to the
The best way to verify the organization’s business achievement of the organization’s strategic objectives.”
imperatives is to interview business leaders and have them:
Building a Successful Strategic Plan | See Business Partner Interview Guide on page 8 7
Business Partner Interview Guide Verify the Business
Imperative
Conduct virtual or face-to-face meetings with key business- What is the direction of the key product line, supply chain,
unit heads to enhance your understanding of business service offerings, etc.?
strategy and objectives. Questions such as these will help How will you know if the plan is successful? What metrics
guide the conversation. will you use to measure success?
1. How would you describe the current state of the What are the key factors that will make or break the
business? business’ success in the long term?
What are our primary sources of revenue and major cost What major obstacles will the business face in achieving
categories? these objectives?
What are the few critical outputs/end results for which the 3. What does the business need in the mid- and long-term to
business is accountable? support the strategy?
What are the advantages or disadvantages of the business What critical capabilities are needed for the business
compared with its competitors? to succeed?
How do you think the business environment has changed How do you expect our function to enable your
over the course of the past year (e.g., market share and business goals?
competition, customers and channels, production/service
delivery cost, technology and regulatory changes)? Which metrics would be the most useful to you to
gauge how this function is progressing against the
What are the biggest challenges you are facing today as a goals mentioned above?
business leader?
What are your top goals and associated metrics?
2. What is the long-term plan for our business?
What specific challenges need to be considered in the
What are your key business goals for the next two to business’ strategic plan to ensure its alignment with the
five years? corporate strategic plan?
What are the business’ primary strategies to achieve
the corporate goals? How do you plan to execute these
strategies?
Building a Successful Strategic Plan | Use the answers from this guide to populate the template on page 9 8
Verify the Business
Imperative
<enter business goals> <enter business priorities> <enter measures of success> <enter potential challenges> <enter business goals>
<enter business goals> <enter business priorities> <enter measures of success> <enter potential challenges> <enter business goals>
Capabilities
At this stage, it is critical to evaluate the maturity and
importance of key functional capabilities required to support
the overall business goals. Leadership agrees on which
“To fully understand how the function
functional capability gaps to prioritize so business goals can must strategically evolve, we had to ask
be met. Note, it’s a red flag if business partner conversations our stakeholders for honest feedback
surface a significant difference between the function’s self- about which areas of our work they most
assessment and business partners’ perceptions of strengths
valued and which areas needed greater —
and weaknesses in functional capabilities.
or less — investment.”
It’s also helpful, along with strengths and weakness, to assess
opportunities and threats for the function. Use the template
on page 14 to complete your own functional SWOT analysis.
Building a Successful Strategic Plan | See example results from Gartner’s Ignition Diagnostic on page 12 11
De
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hrleaders@gartner.com
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peer-based standards. Contact us for more information.
ag ex ef
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the function is less mature in activities
H ut
Evaluate the effectiveness of your function using objective,
R i
of greater importance. A higher API score indicates a greater
ve ves
nd
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Capabilities
Assess
12
Strengths, Weaknesses, Opportunities and Threats (SWOT)
The questions you should be asking yourself
Assess
Capabilities
Continuous self-assessment and improvement is so important. Use a SWOT analysis to identify strengths and
weaknesses, and to assess opportunities and threats for your function.
Strengths Weaknesses
Opportunities Threats
Strengths Weaknesses
Opportunities Threats
In Action
Case Study: Identify the Capabilities Most Critical for
Strategy Execution
Framework for Talent Segmentation Based on Business Strategy In Action: Identify the Capabilities
Most Critical for Strategy Execution
What capabilities are critical for What capabilities are needed for the
driving long-term competitive business but could be delivered more
advantage and revenue growth? cost-effectively?
Work with business leaders
Characteristics Characteristics
to identify employee
Specialized skills or knowledge (IP) No specialized skills or knowledge roles that fit with the
Visible externally and internally Limited impact on business characteristics of each
Direct impact on revenue or performance talent segment
business performance No external customer touchpoints Segmentation priorities:
Identify nonleadership
strategic and core talent
Core Talent Noncore Talent Define requisite roles
What capabilities are unique to the What capabilities are no longer on which to target cost
organization and core to delivering aligned with the organization’s minimization
products and services? strategic direction? Identify noncore talent
roles that account for
Characteristics Characteristics significant labor costs
Essential for strategy or process Made redundant by shift in strategy
execution Limited internal/external touchpoints
Not directly transferable to other
organizations
Limited direct impact on revenue
To support strategic goals, functional leaders will need to services company. “Then, just as important as identifying
develop a prioritized list of objectives with discrete and what we should do is identifying what we should stop doing.”
measurable steps that describe how a specific goal will be
“We use a standard set of scoring criteria to evaluate all
accomplished. (The specific actions that will be required
projects in a consistent, objective way,” says the head
to attain a goal are spelled out later.)
of financial planning and analysis at a major consumer
Each strategic business goal can be supported by four to five products company. “It also serves as a tool for the team
objectives with a time horizon of one to two years. to self-screen projects.”
Objectives should be: You’ll also need to outline to the finance organization what
resources will be required for your plan. It’s critical not to
Specific — concrete and well defined
focus too narrowly on preserving prior-year allocations.
Measurable — allows tracking progress toward goals Also, don’t allow perceived resource constraints to determine
Actionable — links to specific actions of employees to your strategy. Your imperative is to get resources earmarked
monitor their performance to execute your plan and fund initiatives that meet
performance milestones.
Relevant — an activity, behavior or outcome of interest to
business management Ask managers and staff members to identify opportunities
Time bound — tied to a near-term deadline to ensure timely to eliminate or modify activities to free up resources for new
completion priorities. “We ask each staff member to create a list of
activities and tasks that they should stop doing, and why,”
“The most important thing in aligning your objectives to says a senior executive at an oil and gas company. “This
business goals is the rigor that goes into articulating the helps our team direct their full and undivided attention to
objective. Having alignment on paper is meaningless unless new initiatives.”
you’ve defined your objectives in a specific, measurable
and actionable way,” says the CFO of one global technology
company. Checklist — Does Each Functional Objective:
Directly align to a single goal?
“As we look at the business’ objectives — new geographies,
Explain how your function will achieve its goals?
product lines or strategic initiatives — we have to consider
Align with business strategy?
what that means for our own staffing size, structure and skill
requirements,” says one functional executive at a financial Take into account the function’s current capabilities?
In Action
Case Study: Stress-Test Assumptions Better Positioned to Meet the Future
as Businesses Set Objectives Case in point for one large business unit
This multinational communications technology
Previous BU strategy Assumptions stress-testing Current BU strategy
provider stress-tests its strategic assumptions
at both the enterprise and business-unit levels.
In the process, strategists identify and isolate
We win by focusing on Stress tests reveal (status We win by connecting
biases that can impact effective decision connecting more people quo) bias in core belief that more devices to the
making. Latent and uncontrolled biases can to the network. new users represent biggest network.
constrain the set of opportunities the business Closely held belief — growth opportunity. Closely held belief — a
pursues, and lead to false interpretation of acquiring new users has Likely truth suggests that focus on connecting a
always been the biggest the number of devices with multitude of devices to
trends and poorly grounded conclusions about
growth opportunity for wireless connections will the network represents
the future and strategies. our business. increase dramatically in the our biggest growth
future. opportunity (addressing
As business units set their objectives, this Underlying assumption —
growth will be based on And, while uncertain, the opportunity to
process ensures strategies are well aligned and connect 50 billion
individuals. devices may become more
take into account the near-term implications specialized. devices).
of future states. The company successfully As such, a focus on Underlying assumption —
used this approach to challenge the core connecting devices is more growth will be based on
likely to accelerate future creating an ecosystem for
strategy of one of the company’s biggest
growth. device connectivity.
business units — and helped to anchor and
reposition a new strategic direction to drive
transformational growth in the future.
“This process enabled the strategy team to
Meet the challenges of the future — stress-
stretch the business’ thinking, and resulted
test your strategic assumptions with Gartner.
in a technology and business strategy more
prepared to meet the challenges of the future,” Contact us: hrleaders@gartner.com
says one strategy leader.
Building a Successful Strategic Plan | See functional measures and metrics checklists on page 20 19
Establish an Action Plan
With Measures and Metrics
An action plan needs measures — business outcomes, such measurable, actionable, relevant and timely — so you can
as employee engagement, customer satisfaction, brand filter out those that aren’t.
awareness or other management business objectives. The
measures must be observable by available data to properly
Checklist — Do Your Functional Metrics:
assess business performance.
It’s critical to select only a handful of strategic, financial Quantify the performance of a measure
and outcome-oriented measures to track progress toward against a target?
a strategy. Too few measures can reduce accountability; Inform you exactly where you stand with
too many can create confusion as managers try to achieve respect to your goal?
measures that may counteract one another.
Provide actionable information for effective
course correction?
Checklist — Do Your Functional Measures: Proactively highlight deviations from
Consist of significant, observable business forecast performance?
outcomes? Ensure employees focus efforts solely on
Align with business strategy? achieving strategic goals?
Provide value greater than the cost involved Include confidence levels for data feeding
in tracking it? into it?
Include a limited number of outcomes so
tracking is not too costly or difficult? “We frequently screen all the metrics on our performance
dashboard for relevance,” says an executive at a materials
Metrics underpin the measures company. “An important criterion for us is how quickly
Metrics quantify the observed changes in a measure over the metric raises a red flag when performance begins to
time to determine organizational progress and the overall deteriorate so we can respond immediately.”
health of a goal or objective. Metrics must be well-defined Another functional leader says his insurance company
and verifiable, such as turnover and promotion rates or incorporates functional objectives and tactics into
performance-based pay differential. departmental performance reviews and employee
Make sure you’re tracking the best possible metrics by using objectives to ensure consistent progress toward
the SMART framework to assess whether they’re specific, achieving business goals.
Specific
Each metric should represent a quantifiable value linked to an activity Ensure employees and managers know what to do with a metric’s
or behavior. information by setting numerical goals and results bands (e.g., “close to
or exceeding goal” and “far away from goal”) for each metric. This shows
Ask: Does the metric reference a specific numerical value linked to an
employees and managers what they should be working toward and helps
activity or behavior?
them understand and respond to results.
Client satisfaction
Relevant
Average client survey on overall legal department effectiveness Each metric should measure an activity or behavior of interest to
When selecting or creating metrics, general counsel (GC) should consider decision makers.
the degree of granularity that would best measure the activities that Ask: Are there any stakeholders within the business or legal department
support the legal department’s objectives. who care about the behavior or activity the metric measures?
Measurable Number of patents filed
Each metric should have a clearly defined system or process that records
Change in cost of maintaining the intellectual property portfolio
and retrieves its value.
Engage business partners to ensure metrics focus on things they
Ask: Is there a reliable way to obtain the value of the metric?
care about.
Turnaround time
Time-Bound
Hours from request received from client until reply sent by legal
A metric should be time-bound if the GC wants the related activity/behavior
department
to be completed within a specific time frame.
GC should pay particular attention not only to how informative the
Ask: Should we include a time-related threshold for this metric?
measurement will be but also the ease of obtaining the information.
Average time to respond to client requests
Actionable
Percentage of client requests responded to within 48 hours
Measuring each metric should affect behaviors in a predictable way during
and/or after measurement. Number of legal alerts on emerging risks issued
Ask: Will someone that cares about this metric know what to do with the Percentage of legal alerts on emerging risks issued within one week
information it provides? of identifying risk
Total outside counsel expenses per $ billion revenue, with no goal Note that each metric may provide valuable information but may also
Total outside counsel expenses per $ billion revenue, with a goal of 40% encourage different behaviors and lead to different decisions.
(+/- 5%) of total legal expenses per $ billion revenue
Once you have tackled each element of the strategic The major components are:
planning process, you’re ready to summarize the strategy
on a single page. Statement of strategy. A clear and concise statement
that summarizes the objectives on which the function will
Use the one-page template that follows to clarify where the focus in the coming one to three years in order to enable
functional organization is, where it is going and how it will business strategy.
get there. It communicates how you are adding value today,
demonstrates how you plan to impact future business across Current state of the function today. Four to seven metrics
the coming year — in line with corporate objectives — and that gauge the performance of the function today.
provides a tool to cascade the strategic plan further across Top functional initiatives. Five to seven initiatives required
and down the organization. to meet the functional objectives established to support
business goals.
Pressure-test your strategic plan Top underlying beliefs and assumptions. Five to seven
with Gartner. critical assumptions underpinning the strategy (i.e., mid- to
long-term business trends and functional priorities derived
Contact us: hrleaders@gartner.com
from the business strategy summary, including response
to broader business environment and trends). Set metrics
and thresholds where necessary to indicate when a course
correction is required.
Strategy on a Page is an excerpt from our full strategic planning template — a Contact Us to Learn More
customizable, step-by-step presentation to communicate your department’s strategic hrleaders@gartner.com
gartner.com/en/publications/ebook-
objectives and define which resources and capabilities are required for execution.
strategic-planning-for-hr
Instructions
1 Statement of Human Resources Strategy
Craft a concise and memorable Deliver solutions that enable the organization’s talent to actively contribute to, and have a positive impact
1 on, the overall business.
statement that captures the
essence of the strategy. The
statement should summarize the 2 State of HR 3 Top Urgency Drivers 2 State of HR
key objectives of your three- in 20XX 1. Talent mismanagement becoming a key barrier for in 20XX
to five-year strategic plan. Top Four to Seven Metrics
strategy execution.
Top Four to Seven Metrics
2. Changes in the work environment have made work
Describing Initial State Describing End State
more collaborative and complex.
Identify four to seven metrics that
2 Revenue per employee: Revenue per employee:
define the HR organization’s current $147,000 $200,000
4 Top Five to Seven HR Initiatives
and target end state. Percentage of diverse 1. Create an HR project pool team to provide more Percentage of diverse
leaders: 15% concentrated and timely support to line leaders and leaders: 45%
Specify one or two key trends managers to execute our corporate transformation.
3 Successor coverage for 2. Redesign calibration process supported by HRIS Successor coverage for
driving a change in business critical positions: 60% upgrades. critical positions: 95%
conditions. Retention rate for critical 3. Create a career partnerships program to motivate Retention rate for critical
talent: 60% and manage employees across their career. talent: 85%
4. Institute a leadership development program across
List the five to seven key HR
4 Employee engagement all key business units and functional areas. Employee engagement
initiatives required to achieve the level: 86% level: 93%
end state. The initiatives should be 5 Top Five to Seven Underlying Beliefs and
drawn from the three- to five-year Assumptions
strategic plan. 1. The organization will continue to go through an
increasing number of major enterprisewide changes
that require more collaboration.
Document five to seven critical
5 2. The number of leaders eligible to retire in the next
assumptions underpinning the three years will double.
strategy, setting metrics and
thresholds where necessary, to
indicate when course correction is
required as circumstances change.
© 2018 Gartner, Inc. and/or its affiliates. All rights reserved. | Build your strategic plan with the template on page 24
Strategy on a Page Template Put Your Strategy
on a Page
Top Four to Seven Metrics Describing Top Four to Seven Metrics Describing
Initial State End State
© 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Contact Us to Learn More: hrleaders@gartner.com
Step 7: Effectively Communicate Your Strategy Effectively Communicate
Your Strategy
The next step is to communicate the functional objectives and Three Elements of Influential Communication
strategy across the function and the company. The one-page
strategy template is a helpful tool as it makes the plan easy for Does our content resonate with something Is our position/argument presented
employees to consume. Some keys to success: important enough to stakeholders to in a digestible format and stripped
prompt cognitive processing? of extraneous information?
Communicate the plan first to functional leadership, “This is worth some serious thought.” “This isn’t too hard to think about.”
then to business leaders, and finally to functional and
business staff.
Provide managers with a checklist to help them effectively Does my message relay how the new/updated strategy
convey key messages about functional strategy to will affect employees and our function in the short and
employees. Managers can use the checklist to structure long term?
thoughts, verify information to share and evaluate their
Does my message address “What’s in it for me?”
interactions with employees.
Does my message let employees know that our functional
Does my message provide information on the challenges
leadership understands the range of emotions associated
and opportunities for our function, and the expectations of
with the change?
our peers, partners and customers within the business?
Am I covering what new behaviors are expected of
Does my message detail the business rationale behind the
employees and how employee workflows will be affected?
change and explain the benefit?
Am I guiding my team to the resources available to help
Does my message clarify the vision, plans and progress of
them transition and adapt to the changes impacting them?
the strategy?
Does my message highlight resources available to help
others adapt to the change?
Pressure-test your strategic
Is my message consistent with that of corporate plan and communication strategy
communications, executives and other managers? with Gartner.
Does my message supply realistic detail of both the Contact us: hrleaders@gartner.com
positives and negatives of the strategic plan?
Does my message ask for staff’s help in making the plan
work effectively?
Building a Successful Strategic Plan | See page 28 for one company’s use of triggers 27
How To Keep the
Strategic Plan Alive
In Action
Case Study: Use Triggers to Spark Strategy Reviews
Global companies often use financial and nonfinancial triggers to indicate when an enterprise strategy may be losing relevance
or execution of the strategy is at risk. Individual functions can do the same (triggers below are examples only; the list is not exhaustive).
One global science company uses a trigger-based approach for human capital. It enables HR to identify proactively when changes
to organization designs are needed given changing business circumstances or priorities.
Contact us:
hrleaders@gartner.com
Visit:
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for-hr