Examine the human resource strategy undertaken at Zeneca Pharmaceuticals. Gives the business context then goes on to consider the process and impact of work on line functions and the personnel department. Conclude with a list of areas of improvement indicated by the planning of the strategy.
1) Competitive pressure is increasing in pharmaceuticals. Research and development costs are spiraling upwards, and profit margins are spiraling downwards under severe price pressures. The key to success in pharmaceuticals is to do with creative and innovative science, speed to market and effective marketing. All three are fundamentally dependent on the excellence of people.
2) Arrive at an HR plan for each function which is generated and owned by the line managers and which directly addresses strategic business objectives.
3) Demonstrate to line managers the concept of proactively analyzing the application of human assets and of being far more flexible and focused in the use of business HR policies, i.e. the HR function will now provide enabling frameworks rather than rigid procedures.
1) Stage 1: Initial Analysis By Core Team
The core team at stage 1 typically comprises the appropriate personnel team leader, personnel officer and themselves. It is a paradox that a process devoted to achieving line-led HR should start by excluding line management involvement. This analysis at stage 1 consists of asking two questions:
i) “What are the HR implications contained within each of the line functions objectives?” A list of implications is produced for each objective and the frequency of recurring HR activities or processes identified is then established across all the objectives, giving an indication of relative significance of HR topics.
ii) “To what extent is each significant HR activity or process being used effectively by the function in support of its business objectives?” It is one thing to identify significant HR contributions to achieving business objectives, but quite another actually to achieve that contribution.
2) Stage 2: Sharing Of Analysis And Agreement On Key Themes With Function Head
To gain the function head’s acceptance of the principle of HR plans. The HR team should not set out to get everything in the analysis right at this point – ownership in the function head is increased if he/she has the opportunity to contribute to the analysis. In the event, all function heads contributed to and were pleased to own the outcomes.
3) Stage 3: Function Head Engages With Management Team Through Existing Business Process To Confirm Key Themes
Function head to declare his/her ownership of the work to his/her management team; to build on the analysis from stages 1 and 2 with the management team, thereby gaining their input and ownership; and to start shaping the HR plan.
i) A “hook” – this is an HR issue known to be of current interest or concern to the function management team. No matter how remote this issue may appear to be from the “real issues” in the emerging HR plan, this is the place from which to start.
ii) An existing business process in the function through which to engage with the line management team – using an existing local process or meeting:
iii) encourages ownership;
iv) demonstrates that HR planning is an integral part of business planning;
v) reduces the risk of “yet another HR initiative”.
4) Stage 4: Work With Management Team To Agree Strategic HR Plan
Concern with involve the line managers in working up the detail and recommendations for the HR plan. It is an opportunity to increase their ownership further and to coach them in a particular aspect of HR management.
5) Stage 5: Implementation Of Plan
This involves a combination of one-on-one working between personnel and a line manager; working parties and line on its own. Whatever the means, it must be line-led. The HR team, however, will have to be active in encouraging, cajoling and steering.
6) Stage 6: Continual Review Of Progress And Currency Of Plan
Same exist process or management meeting employed at stage 3, wherever possible establishing review of the HR plan as a standing item on the agenda. The intention is that, over time, HR plans will be seen as a central and normal management tool. The driving force behind the review is the function’s business objectives; as they change so must the HR plan and, indeed, so must the HR function’s own objectives.
This work is undertaken in three major business functions in the last 18 months. Each has different needs at the outset. In one, we identified more than 30 separate HR activities or initiatives underway at the same time. Each was laudable in itself.
Initial analysis at stage 1 demonstrated that fully 50 per cent of them could make little or no contribution to current business objectives. This represented 50 per cent wasted effort. Of the remaining 50 per cent, no activity or initiative was being used to its fullest potential. The function head quickly bought into the analysis at stage 2 and agreed to carry the work forward to his management team.
The function now has an HR plan which has been developed by the line managers and concentrates on the four top priority HR issues which can make the greatest contribution to the function’s business objectives.
There have also been significant implications arising from this process for the HR function itself.
1) Must be professionally authoritative, but not dogmatic, in what we advise in order to establish credibility and therefore acceptance.
2) Must be, or become, more closely integrated with our clients in order to know, or sense, each function’s business direction.
3) In engaging with senior line managers, our communication and influence must be marked by simplicity: our clients will nonetheless recognize and acknowledge the thoroughness of the analysis that lies behind it.
4) Must be prepared to take risks in, and learn from, talking business strategy with senior managers.
5) HR professionals must develop capability in conceptual and strategic thinking, consultancy and facilitation skills as they work with managers rather than for them.
6) Being clear about and checking all actions against, our conceptual objective of “line-led HR” is critical. We need to have an effective and consistent change strategy of our own; we need to resist firmly but nicely the inevitable demands from line managers to “do it for me”; we must realize that, in keeping with the philosophy of ownership being “in the line”, we can no longer oblige managers to be interested in HR plans – they must need to be interested.
7) It is important to continue managing the traditional HR portfolio, while at the same time moving towards our new operating style.
8) Must be comfortable with 80/20, adopting a flexible approach to each client group, starting from where they are and realizing that the purpose is to achieve an HR plan, not to protect the integrity of the process. Acceptance of the principle of strategic HR planning is typically a breakthrough in itself.
Responses from senior managers have all been positive:
1) Have demonstrated to them in a practical way that HR is indeed a strategic management issue which can be, in fact must be, and linked to business objectives.
2) They are genuinely delighted that the HR function has taken a proactive interest in their business objectives.
3) Once HR processes are demystified, line managers are enthusiastic to do the work. They greatly appreciate the HR function sharing or transferring its expertise. Indeed, since we started the move towards line-led HR, we have seen increasing shifts in line manager attitudes from “that’s your job”, through “I’m thinking of doing this – what do you think?” to “I can do that myself now”.
4) It has been an opportunity to coach managers in change management skills and behaviors as they participate in a repositioning of HR accountabilities.
F. Recommendations for Future Research
As we review our first 12-18 months experience of HR plans and look ahead to the next 12 months, we have recognized the following learning points and areas for improvement:
1) That line managers will immediately understand the impact that focused HR management can have on achieving their business objectives. It needs drawing out and demonstrating consistently.
2) The more specific the actions in an HR plan, the more they have happened.
3) The closer action is to a real business requirement, where there is a degree of discomfort, the more it happened.
4) It is important for the HR team to keep its own activities within each plan coordinated.
It is important that the HR function keeps the pot boiling to maintain progress and commitment in the line. The HR team will have a lot of the legwork to do at first and must be careful to avoid dependency. However, concerns the fact that the major research and development functions are becoming increasingly international in their organization and operation.