By Michelle O’Connor, Chief People Officer, Hive Support Services.
Most businesses have a strategy of some sort, defining their vision and values and setting out what they want to achieve. Yet there is one vital component which can make the difference between failure and success. It’s not technology, investment, or even the strategy itself. It’s people.
Because strategy doesn’t deliver itself. Whether the goal is increasing revenue, improving productivity, reducing costs, transforming customer service or adopting new technology, it relies on people making it happen.
And that means having the right staff in the right roles is only part of the picture. If your people strategy isn’t aligned with your business strategy, you risk having ambitious commercial goals without the skills, leadership, engagement or capability needed to achieve them.
Interlinked strategies
The strongest organisations recognise that people strategy goes far beyond the role of the HR function. Its impact reaches across the entire business, shaping the capabilities, culture and performance needed to deliver strategic goals.
Get the people element wrong and there can be a commercial cost – from transformation projects which fail to deliver the expected return and technology which isn’t fully adopted, to lost productivity, higher staff turnover and a poorer customer experience.
That’s because people strategy is about much more than flexible working, benefits or annual reviews. It is about whether the business has the people and capabilities it needs to succeed.
Do you have the skills required for your next stage of growth? Are you developing the people who could become your future leaders? If you invest in new technology, will employees have the capabilities to use it effectively? And do your teams understand where the business is going and the part they play in getting it there?
These may look like people questions, but the answers have a direct impact on business performance.
Companies routinely invest significant sums in technology, products, processes and infrastructure to achieve their strategic goals. But the return on those investments will always be influenced by the people expected to deliver them.
That makes people strategy a commercial consideration, not simply an organisational one.
The business case
There is clear evidence of the commercial value of getting this right.
Gallup’s analysis of almost 350 organisations, employing 3.3 million people across 90 countries, found those which engaged most effectively with their teams were 23% more profitable and 18% more productive, with employee turnover up to 51% lower and customer loyalty 10% higher.
The figures make an important point – people performance and business performance are not separate things.
Consider the investment being made in technology and AI. Businesses may spend significant amounts implementing new systems in the expectation they will increase productivity, reduce costs or create new opportunities. But the business case only works if employees adopt them, understand how to use them and change the way they work as a result.
Growth creates a similar challenge. Winning more customers, expanding services or entering new markets is one thing; having the skills, leadership capacity and operational capability to deliver that growth profitably is another.
Even retention has a commercial consequence. Losing experienced people means losing knowledge and capability, while creating additional recruitment, training and productivity costs.
Seen in that context, investment in people needs to be considered in the same conversation as investment in technology, operations and growth.
Turning strategy into results
This becomes particularly important when launching or refining a business strategy.
Whether the aim is growing revenue, improving margins, increasing productivity, embracing AI or strengthening customer retention, each requires people across the organisation to think, act or work differently.
If employees don’t understand what the business is trying to achieve, what success looks like, what is expected of them and, importantly, why, even the strongest strategy can struggle to translate into results.
That makes communication, leadership and training much more than people initiatives. They are part of strategy execution.
But communication alone isn’t enough. People need a clear line of sight between the work they do and the wider ambitions of the business. When they understand how their decisions and actions contribute to those goals, they are better placed to make choices which support them.
Because strategy isn’t delivered in the boardroom. It is delivered through the decisions being made across a business every day.
Building competitive advantage
The same thinking needs to start much earlier. Rather than developing a business strategy and then asking what people are needed to deliver it, organisations should consider their workforce capabilities while that strategy is being shaped.
If growth is the ambition, do you have the leadership and skills to scale? If AI is expected to improve productivity, do you have the capabilities to realise that opportunity? And if the market changes, does your workforce have the ability to adapt quickly enough to keep pace?
These are not simply workforce questions. They can determine which opportunities a business can pursue, where it invests and how quickly it can move.
And this is where people strategy becomes particularly powerful. It doesn’t just support business strategy, it can help shape what is commercially possible.
A competitor can invest in the same technology. It can replicate a process, launch a similar product or pursue the same market opportunity. What is much harder to replicate is the collective knowledge, leadership, capability and experience of the people within a business.
That can be a genuine competitive advantage.
Over the next few years, as organisations navigate AI, changing skills requirements, continued cost pressures and increasing expectations around productivity, the ability to turn strategy into results will become even more important.
The businesses which succeed will not necessarily be those with the boldest plans or biggest budgets. They will be those with the capability to execute.
Technology, investment and clear objectives will all play their part. But people are the ones who use the technology, make the commercial decisions, build customer relationships and ultimately deliver the return.
That is why people strategy goes far beyond the HR function. It has a direct impact on growth, productivity, investment and long-term business performance.
Your business strategy defines the ambition. Your people determine whether you can deliver it.
