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Organizational effectiveness and business partnerships: Five keys to success

April 8, 2011

Whatever the criticisms of business partnering initiatives, the need for cross-disciplinary cooperation is increasing. Greg Spencer and Liz Credé of Sheppard Moscow advise on the features of successful implementation.

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One of the most popular approaches for organizational development over the past 15 years has been business partnering. The logic is straightforward: equip specialists in internal functions to become more commercially aware, and to work as partners to help develop the business, rather than be just technical advisers. It has been widely adopted since the 1990s, when the business adviser David Ulrich popularised the approach for the HR function.

Inevitably, perhaps, a backlash has begun. Is it just another fad? Is it just a superficial re-badging, with specialists continuing in a support role? Or has it gone too far, with support service heads consumed with business strategy and neglecting the specialist services of their divisions? Now that the IT person, the Finance person, the HR person, the Procurement person, and the Legal person all want a “˜seat at the table’, many business leaders are realizing that they either need to work differently – or get a bigger table.

In our experience at Sheppard Moscow, helping dozens of major international companies with their business partnering, the approach can be highly valuable. We would invert the onus: how can a business operate without partnership across the functions? Good relationships at the heart of a business aren’t some optional extra – they are the spark in the engine.

But setting up a formal business partnering arrangement is only ever a means to an end. It shouldn’t be slavishly followed as a corporate fashion. One should never lose sight of its ultimate purpose. In the case of HR, for example, a key aim could be to ensure that the company has the right people in the right place at the right time, which is a fundamental imperative for any business. There may be other means to that end – an alternative may be to equip line managers with the ability to recruit and develop their teams.

Our experience indicates five clear keys to success when embarking on business partnering:

  1. It must be rooted in context, and help the business meet its goals. At Sheppard Moscow, we never engage with a project without thorough investigation into the commercial objectives and the key personnel and relationships involved.
  2.  The change in the business relationship has to be two-way: the line managers as well as the specialist functions have to adopt the practice and be committed to making it work.
  3. The personal change required can be considerable and is across all dimensions: thinking, doing, and being. An IT or HR specialist may not naturally possess some of the attributes: skills such as business analysis, the ability to build commitment, or personal qualities such as confidence, and developing a mindset of partnership, rather than service.
  4. The motivation for business partnering, and the business benefits, have to be clear.
  5. It is essential to maintain highest standards in core basic services.

In our experience, problems with business partnering tend to arise from failure to apply these principles, rather than from the concept itself.

Respecting these five disciplines can mean that the investment in moving to business partnering is considerable. This raises questions of value for money and return on investment. Some organisations adopt the principle of “˜kaizen’ – dedicated to continual improvement in business processes, with monitoring. Others look for measurements of financial returns from specific interventions. Either way, some assessment of effectiveness is essential.

One individual whom we helped to become a business partner recorded an improvement at both a personal and business level: better commercial awareness and confidence, in turn leading to commercial gains:

“˜The Finance Director took me seriously for the first time. Since then we have worked up the idea [a proposal on waste management] and involved others. Yesterday we signed a new contract and we have halved our costs. We are going to save €200,000 a year and that’s just the start.’

At the credit-risk specialist Experian, Sheppard Moscow has helped the HR function become business partners, taking a full partnership role in both business strategy and operations. HR business partner John Garside says that his role involves a deep understanding of the commercial objectives of the business unit he is partnering, and getting to know the leaders. He adds:

“˜So if a business unit leader is saying they want to grow the business – double it over the next two-three years; what does that mean from a people point of view? Have you got the right people, who can lead that in three years’ time, when it’s double the size?’

It is worth noting that, although there are some voices critical of business partnering, interest is still high. The underlying cause is the need for high levels of cooperation and collaboration across departments. If business partnering fell out of favour, a similar approach, perhaps with different branding, would surely emerge to fill its place.

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