What are other departments doing that successfully convince the business to invest in innovation and improvements? It’s clear that people are the most critical components for business success. So for HR, why does persuading the business to make change, seem like an uphill struggle?
What tends to happen in departments such as IT is a failsafe process in which they build a compelling case, clearly quantifying the cost vs. savings impact of innovation and improvement. Their case is often very clear on what the impact will be on the business, if we do nothing. So how can HR translate this approach into their own department?
Be clear on your business case. Turn your intuition and anecdotal evidence into a strong, compelling story. The business case is the one place where all relevant facts are documented and linked together into a cohesive story. This story needs to tell the decision makers about the what, when, where, how and why. The aim for this document is to receive investment and approval to move forward.
The role of the business case is also to confirm and demonstrate that the solution meets the needs of the business:
Discovery – What is the issue? This goes deeper than stating ‘talent retention’ or ‘improving performance’. It is about analysing when and why you are losing talent. Is it at the peak of their performance? If so, why? It’s about getting to the cause of the problem.
Financial modelling – Using the retention issue above, what does that mean in terms of loss of revenue, impact on customer advocacy and internal cost implications? Linking it back to business KPIs and/or shareholder returns, will give you a framework for your cost analysis. You will need to clearly present the costs and anticipated benefits of solving this issue. As standard, you might want to look at the following:
- Leaky bucket: how much money is spent through the year, between pay reviews on ad-hoc, out of cycle increases, that could be focused elsewhere
- Flight risks & past glories: running a comparison of high and low performers and their position against the market, to see if performance justifies the pay position
- Pay control & Governance: compare pay against the market by hire date and look at any trends that could create dissatisfaction. Analyse how pay decisions are managed across the business and how they vary between departments/line managers, identify any future equal pay concerns or lack of link to talent
- Variable pay: comparisons of bonus payments against individual performance, sales performance, long-service and gender
Anticipated solution – This isn’t always about defining an actual solution in the form of a platform or framework, sometimes your business case is about being clear on the Direction of Travel which is the start of the journey. Make use of case studies from other companies that have had similar issues, identify what they did and what the impact was. Often looking at entries submitted to HR awards and publications provides insight into how these can be measured. Most importantly, be clear on what will happen to the business if nothing is done.
Gaining commitment and buy-in
Who to convince – The recipients of the business case should be the decision makers who can take action in terms of investment and providing commitment. They are typically senior leaders and the Board. However, it is always beneficial to tap into the usefulness of any influential advocates of HR or you personally.
Be clear on aims and expectations – While the business case is your armoury, you will have to draw on your powers of persuasion and passion to help gain a decision to move forward and commitment on resources and funding needed. Articulate what the change management process will look like, timescales and how you will report back. This will strengthen credibility.
Although this seems overwhelming, you will have internal resources and methodologies you can tap into so make use of them. From that develop and strengthen your own business case methodology and your approach to root cause and cost analysis, and you will be able to transform the business through HR.
