How to create a people strategy.
This is how I do it.
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Happy Monday (!),
I thought I posted this on Friday, but apparently, I closed my browser too fast.
So this week, you’ll get two articles. I hope that’s ok.
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Now let’s get to it.
If you Google "How to create a people strategy," you get a lot of hits. But most of them talk about the importance of having one and the different parts that make up a people strategy. However, they rarely talk about how you actually create one.
Let's do that.
As always, this is my view and way of creating a people strategy.
The first step in my book is to look at the overarching strategy for the business as a whole. Where's the business heading? What is the vision and mission of the business? What does the company want to achieve? What goals are there, both long-term and short-term?
I believe these are crucial questions to have an answer to before creating a people strategy. Why? Because the people strategy should enable and reinforce the overarching business strategy. I have often seen people strategies being developed with the sole purpose of having a people strategy. So you then can say, "we have one," but no one except the people/HR team reads it or thinks about it. That's not great.
If your organization doesn't have a business strategy - push for one to be created! And then, once that's done, start making your people strategy.
How to start?
I like to start by looking at what the business would want to achieve and then commence the "big inventory" and "time for a lot of questions" sessions.
Let's say you want to increase revenue by X%; what steps are necessary to accomplish this? Is it about developing your sales force? Increase prices? Are the people you have at hand equipped to increase sales, then? Is your accounting department up to date with the latest pay principles? Are your managers willing to let go of the bottom performers?
This is what I mean by the big inventory - you ask many, many, many questions regarding what you want to achieve, and then you take an honest look in the mirror. Are we equipped to do what we want to do? It's like if you wanted to run a marathon but have never run a single mile and weighed too much. You hopefully then lay out a plan to run the whole distance, and you are honest about your current state.
Let the questions take place at this stage, don't go into problem-solving mode yet. It puts the spotlight on where you need to focus your efforts. Perhaps you have specific parts nailed down already. Recruitment, for example, is a prevalent example of what many growing companies have in their people strategy, one way or another. And sure, that can be a crucial part. But if you already have a great recruitment process and can fill the open positions, maybe you should focus less on TA and more on other parts of your people strategy.
The important part is to look for discrepancies between what the business wants to achieve and your current workforce. What you need to do to bridge that gap is an excellent foundation for what should go into your people strategy. And we play an important role here! Make sure to balance the business's future with our people's well-being. If we can't make the connection between the two, your people won't have a great employee experience.
To set a sound people strategy, there needs to be a tight connection between the CEO and the CHRO. I've never seen a company with a good people strategy where this bond doesn't exist. You probably guessed why, but it all comes down to the business strategy, which ultimately the CEO is responsible for, and the people strategy that the CHRO is responsible for, needs to work together. Why? Because people are many companies' greatest resources.
But I think that's clear now.
This will get very practical. To kick off the work with a people strategy, I've invited the CEO to a meeting with the people team. Not that they usually have not heard the business strategy before, but to reinforce it. With that as a start, throw everything out on the table. All the information you’ve gathered before the meeting. The areas you see need work.
And then start prioritizing what's most crucial because that list can be extended. It's usually fun but sometimes challenging because people (myself included) think of people strategies as fluffy and nice. Think of it like a house - you need a strong foundation if you want your house to last. We need to build this together. Then I brought in the rest of the leadership team - not just HR - and asked them to prioritize the activities.
When combining these two perspectives, you get that excellent foundation for your people strategy, and you cover all aspects of the business as well as it gets.
I have been torn about including what's usually in a people strategy because the internet is flooded with examples. And I won't make a long list, but it is worth mentioning that I've never done this exercise and not ended up with leadership on the list, one way or another. This is not surprising, given that leadership affects most parts of everything else that might pop up on the list.
It's important to emphasize that the people strategy shouldn't be too tangible, just like the business strategy. It's an identifier of areas you and your people team deem essential for the business to succeed. It's a guiding star—something for the nervous HRBP to lean on when having difficult conversations with managers. Don't let it be a document full of solutions.
Write it down. Communicate it back to the organization. Show them your foundation. Of course, the people team will own the people strategy, but it needs to be communicated by the management team, particularly the CEO. Then, like with any business strategy, it's up to the management team to set the general guidance and direction, it's also up to the leaders in the organization to live by the people strategy.
And it's our job to ensure that the leaders live by the people strategy.
It's not an easy job, but I know we are all equipped to do the needed work!
Let's get to it and go out and create people strategies!
People Strategy examples.
Spotify's People Strategy - This is an obvious one for me. Having worked at Spotify for several years, this strategy has formed my thinking about how to build a great one.
BCGs People Strategy - It's a bit more corporate than Spotify's but serves as a good example and inspiration.
University of Cambridge's People Strategy - A bit surprising but Cambridge's people strategy is a nice one! Read as inspiration!
Barnsley's Hospital's People Strategy is extensive and lengthy but also serves as great inspiration if you are about to create one for your organization.