The HR function should play an integral role in integrated business planning, however, HR is often left out of the process, or simply overlooked for a number of reasons, according to a recent report.
For integrated business planning to be truly effective, a “whole of organisation” plan is required to achieve a business’s overarching goal – and to do this, it should include HR.
“People plans and the plans for HR-related activities in an organisation are a key ingredient in integrated business planning,” said Stuart Harman, partner at Oliver Wight Asia Pacific, which conducted the report, People Watching, HR’s Role in Integrated Business Planning.
“It is therefore essential that HR understand the role that they play in making integrated business planning successful.
The core plans in any organisation are those that cover:
- What is included in the organisation’s portfolio of products and services
- The stimulation of, and planning of demand for those products and services, and
- The plans for the supply of those products and services so that the organisation can meet the planned demand.
“All of those plans are underpinned by people plans,” said Stuart Harman.
“Unfortunately, the functional, hierarchical organisation structures that exist in most organisations coupled with the limited resources that many HR teams work with, mean that when organisations design an integrated business planning process the people plans, typically at least one step removed from the core plans, along with the HR function, are not fully integrated into the process.”
One of the most significant assets in any organisation in delivering strategy and the core plans are people, and as such, Harman said is it HR’s role to understand the skills required in each function in order for the strategic and core plans to be successfully delivered.
“If HR is left out of integrated business planning, its plans become disintegrated from the organisation and visibility of what is needed from HR is lost, or only understood at the last minute,” he said.
“This leaves them scrambling to find the right talent.”
When development or recruitment is delayed, capability is not in place, performance goals are missed, or the organisation ends up working in a distressed manner.
“HR leaders can be seen as ‘out of touch’ or unresponsive to the needs of the organisation”
Furthermore, Harman said staff with the required capabilities often end up overworked with the resulting risk (or actual) unfavourable impact on quality of work, timelines of deliverables, costs and engagement of individuals.
“As a result, HR leaders can be seen as ‘out of touch’ or unresponsive to the needs of the organisation,” he said.
Where HR can add value to integrated business planning
If HR can get ahead of the curve on the development and hiring of talent, Harman explained that the right people can then be in place at the right time to deliver the business plans.
“An integrated business planning process entails a review of the core plans (product, demand and supply review meetings) and the resulting whole of organisation plan (reconciliation review and management business review meetings) on a monthly basis.
In each of these, Harman said HR can add significant value.
“For example, in the product management review, projects that are underway that will change the portfolio of product and services are reviewed,” he said.
“These projects require people with leadership, project management and technical skills.
“Understanding what skills will be required when and in what quantity, and then ensuring their availability is a key task for HR.”
In the management business review, Harman said the HR director should attend as a member of the leadership team and is required to provide input on any issues and decisions required where people are a factor.
Furthermore, HR can play a significant role in both the implementation and sustainability of integrated business planning.
During the implementation of integrated business planning, HR can plan the resources for the project team, support education and process design workshops required for the process and ensure that the leaders and key individuals in the organisation are coached in the new behaviours required for integrated business planning to be successful.
“Getting HR intimately involved integrated business planning switches the HR function from reactive to proactive”
In sustaining integrated business planning, Harman explained that HR can ensure policies and procedures around integrated business planning are created and added to the organisation’s management system, integrated business planning is included in the induction for new starters, ongoing education is provided, position descriptions are adapted for roles that are involved in the process, and where appropriate performance appraisals include goals for integrated business planning.
Steps for HR in getting involved
Harman observed that leading organisations recognise that people are a key differentiator and that people plans underpin an organisation’s core and strategic plans.
“In order to get the right people in the right roles at the right time, the people plans need to be driven by, and integrated with the core operational plans,” said Harman.
“This can be achieved by ensuring that HR are represented at each of the review meetings in the integrated business planning process and that any changes to operational plans flow through to people plans and vice versa.
“This will ensure alignment as well as a monthly ‘check and correct’ process that will keep HR’s plans in step with the rest of the organisation.
“Getting HR intimately involved integrated business planning switches the HR function from reactive to proactive.
“Having a clear view of the needs of the organisation out over the 24 month-plus planning horizon enables the HR leader to switch from ‘firefighter’ to ‘strategic advisor’ on people matters.
“Ensuring that HR is playing an active role in the integrated business planning process of the organisation is an essential step in enabling the value that HR can provide to come to the fore,” said Harman.