The role of strategy architect in the strategic HR organization.

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A New Role for HR

In years past when strategic discussions were on mergers, globalization, innovation, customer service, or financial performance, HR tended to join the conversation very late--and only after someone else realized there might be a "people" implication or there was a to-do list for the HR department. HR's role was more tactical than strategic (Ulrich, Brockbank, Yeung & Lake, 1995). Whether this was caused by, or was the cause of, perceptions that HR was not central to the business, the result was the same: HR professionals had to work doubly hard to achieve the proverbial "seat at the table."

Recently, the distinction between strategy formulation and execution has become increasingly blurred--the implementation of strategy is as important (if not more important) than the strategy itself. Because implementation is driven heavily by measurements, rewards, staffing, training and communications, HR is central to effective strategy implementation. As a result, HR's input to strategy formulation and implementation often is sought earlier in the strategy process (Bossidy and Charan, 2002). Not only are HR professionals invited to the table, they are expected to be more than note takers once they're seated (Brockbank, Ulrich & Johnson, 2005; Saloner, Shepard & Podolny, 2001; Pettigrew, Thomas & Whittington, 2001; Hussey, 1998). In essence, they are being asked to be Strategy Architects.

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In 2007, we completed the most recent round of the Human Resource Competency Study. For two decades, this ongoing study has identified the competencies of effective HR professionals and departments. We did a factor analysis on the responses from 10,000 HR professionals and associates in six regions worldwide. The model that emerged from the data is described in Figure 1. (See the Sidebar for a description of the research and analytical procedures.)

Figure 1 captures a number of the model's important implications. We reasoned that the six factors could be placed into one of two categories: People and Business. The large arrows or vectors bordering the model represent these two categories. In the midst of constant change and upheaval, HR professionals serve the organization's people. They communicate care, concern and compassion for employees.

In addition to being attentive to the people aspect of business, marketplace dynamics also require that HR professionals be cognizant of external customers, investors and communities by making sure that correct business strategies are designed and delivered.

We posit that following only one of these arrows without accounting for the other will lead to sub-optimization of HR's influence on performance. HR professionals who emphasize the people side to the exclusion of the business side may be well liked and popular, as they build good social organizations. However, they will not succeed as contributors to the business because their work does not further business results.

On the other hand, HR professionals who focus unilaterally on the business vector without knowledge and skills relative to the human element will also struggle. The business may prosper in the short term, but people will not sustain the success in the long run.

These conclusions are derived both from personal observations and also from regressions of business performance against each competency factor. This will be discussed in the next section. HR's ultimate jobs are to link the human side of business with business strategies and to frame and implement individual abilities and organization capabilities as a critical source of competitive advantage.

Historically, many HR professionals are oriented to and comfortable with the domains that fall on the left-hand side of this model. They are more likely to be seen as credible by building relationships, working toward operational excellence in the delivery of benefits, paychecks, vacation and training processes, and designing HR practices that help with talent acquisition, retention and deployment as well as organization development.

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Many HR professionals frequently are not as comfortable with the right side of this model. They often are not seen as "activists," having active and accurate opinions about the business. They often times do not fully understand the business and how it makes money, serves customers, attracts investment capital and differentiates itself from competitors. In recent years, while many in HR have sought and gained a seat at the table, they too often are not as confident in what they need to say once they're there.

We focus this article on the importance of the Strategy Architect role for the effectiveness of HR professionals. We define what it means to be a Strategy Architect; report research on the impact and role of being a Strategy Architect; and propose specific suggestions for successfully playing this role.

What is a Strategy Architect?

HR professionals who are Strategy Architects shape and share the vision for how their organization is situated in the marketplace. They shed light on how it can win. They play an active part in establishing the overall strategy to deliver the business vision. They recognize industry structures and trends and their impacts on requisite business dynamics and results. They forecast potential obstacles to success and facilitate the overall process of gaining strategic clarity. Strategy Architects also contribute to discussions on the overall strategy by linking internal organization actions to external customer expectations. This linkage helps make customer-driven strategies real to company employees.

The Strategy Architect factor is carefully named. The research reported below indicates that this factor consists of many behaviors and functions:

* helping to establish the business strategy;

* having a vision of the future;

* providing alternative insights on business issues;

* understanding external customers;

* leveraging customer information as the basis for institutional integration; and

* working with business leaders to articulate purpose and meaning for the organization.

Given the strategic nature of these behaviors and tasks, the strategy part of the title seems obvious.

We paired strategy with architect for several reasons. The concept of architect serves as a fruitful metaphor from which to derive more powerful explanations of our empirical findings. Architects have unique information that enables them to build blueprints that guide decision making. They are not owners, but informed advisers who are schooled in the underlying principles of form and function, style and structure. Architects are not quite engineers and not quite designers, but can converse intelligently with both. More importantly, effective architects integrate engineering and design around clients' needs and wishes. Within the context of this threefold integration, architects enunciate an overall vision for the space they are helping to create.

In a similar manner, HR professionals must thoroughly master the strategic architecture of the business in which they work. They need an in-depth appreciation of the company's business portfolio and what makes each business distinctive in the customer's eyes. HR leaders do not invent the strategy, but unless they ground all of their HR work in fundamental business principles, the system and processes they create will be unstable, irrelevant, and, ultimately, unsatisfying to the customer.

Additional factors analysis of the Strategy Architect primary factor yielded two distinct sub-factors: Sustaining Strategic Agility and Engaging Customers. These help explain more of what the architect must do.

Sustaining Strategic Agility

Sustaining Strategic Agility mandates that HR professionals understand the business strategy and align HR practices with it. This includes being able to identify the problems central to the business strategy; recognize marketplace trends and their impacts on the business; and translate strategic direction into annual business and HR initiatives. HR professionals have the responsibility to understand--and they must ensure that others in the organization, from the new hire to the CEO, understand the vision for the future.

By understanding the strategy and the potential obstacles to its success, high-performing HR professionals are able to maintain the organization's agility:

* They ensure the availability of resources (money, information and people) that facilitate needed change.

* They have a vision of the future for the business.

* And they are proactive in contributing to business decisions.

IBM is an excellent example of Sustaining Strategic Agility (Murrell, Forte-Trammel & Bing, 2008; Gerstner, 2002). With more than 350,000 employees, agility would seem almost impossible to achieve. In the past decade, IBM's HR leadership has focused on three tasks that have helped them maintain agility.

First, they actively seek to understand future needs. In an industry that changes rapidly, staying ahead is crucial to sustain competitive performance. HR leaders look two to three years into the future to forecast the skills and people they will need to maintain a competitive advantage.

Second, IBM's HR professionals lead the organization's overall global transformation. While many companies may have HR professionals that only facilitate strategic planning meetings, IBM's HR leadership plays a much more active role in defining and executing strategy.

Third, they work hard to maintain very low turnover. IBM believes that when people know their jobs well and have confidence in their futures with the company they are more able and willing to adjust to change quickly.

Engaging Customers

We find it fascinating that factor analysis of Strategy Architect questions would result in the sub-factor of Engaging Customers. Being able to leverage customer-based information as the basis for fundamental institution building is indispensable to HR professionals in their overall role as Strategy Architects. The sub-factor of Engaging Customers involves four primary variables:

* facilitating the dissemination of customer information throughout the organization;

* contributing to the building of the company's brand with customers, shareholders, and employees;

* facilitating the integration of different business functions; and

* reducing low-value-added work.

These behaviors suggest that HR plays an important role in amplifying important signals (such as customer feedback and information), transmitting these signals throughout the company and leveraging them as fundamental sources of institutional integration and coordination. The end result is that people know how their work links directly to the strategy and to the customer. This is a somewhat remarkable finding because HR professionals tend to be stronger at facilitating the dissemination of internal information.

We also note that "reducing low-value-added work" is included in the engaging customer sub-factor. The explanation for this hinges on the term's definition. To ascertain what constitutes-low-value-added work, we interviewed more than 100 executives in our executive programs at the University of Michigan and at the RBL group. This led us to understand that low-value-added work almost always entails some form of information processing or management such as writing reports, completing irrelevant paperwork, attending meetings and waiting for approvals. These findings imply that as HR amplifies weak but crucial customer signals from the outside, HR professionals must concurrently reduce the loud but less valuable signals from the inside. This is frequently the opposite of what actually happens.

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Further analysis shows that the Engaging Customer sub-factor is a significant differentiator of HR professionals in high-performing firms from those in low-performing firms. When functioning in this capacity, they play an important role in helping the organization respond quickly and accurately to weak but important signals. In so doing, they help navigate the firm through increasingly turbulent market environments. (In engineering systems, this powerful information-processing phenomenon is appropriately referred to as auto-adaptation. See, for example, Xun, Rabah & Weber, 2008.) This finding about customers suggests that HR professionals not look in the mirror of strategy to reflect HR practices, but look through the mirror to customers and build HR practices that align to customer expectations.

Strategy Architect by the Numbers

Our research reports how HR professionals perform Sustaining Strategic Agility and Engaging Customers in two ways. First, we indicate the extent to which HR professionals perform these two sub-factors. Second we show how competence in these two sub-factors influences business performance.

Performance

Figure 2 shows that HR professionals tend to be relatively less competent in their role as Strategy Architects when compared with other competency factors. HR professionals were scored by their non-HR associates on a five-point scale (1 = low and 5 = high) at a 3.58 and by their HR associates at a 3.67. The non-HR professionals, many of whom are HR's internal clients, see HR professionals as less capable in this area than do their internal HR counterparts.

Furthermore, their scores on Strategic Architect are substantially lower than those on Credible Activist and are slightly lower than Culture and Change Stewards and Talent Managers/Organizational Designers. Their score on Strategic Architect is lower than their score on Operational Executor as rated by their non-HR associates. Out of the six factors, Strategic Architect is near the bottom as rated by HR professionals themselves, their HR associates and their non-HR associates. Furthermore, HR associates view their colleagues as better at both factors than do non-HR respondents.

Although many parties in the HR field have been discussing the importance of acting strategically for more than a decade, as a whole, HR professionals are still perceived as lacking skills in this area.

Equally interesting and even more dramatic is the difference in performance scores between the factors within Strategy Architect (See Figure 3.) HR professionals, regardless of which group is rating them, are seen as much better at Sustaining Strategic Agility than they are at Engaging Customers. This is especially true from the perceptions of non-HR associates who see HR being much less customer sensitive than do other HR associates.

These findings lead to two primary conclusions. First, the ability of HR to influence strategy appears to have outstripped its having critical external knowledge as the basis for that influence. This could partially be due to the amount of emphasis that has been placed on HR to act strategically over the past decade.

Second, in defining its "customers" many HR professionals still think of employees or managers as their customers. To some degree the HR field has failed to engage in the language and logic of the business when it comes to customers. From the business perspective, the customer of the business is the external customer. When HR singularly and primarily focuses on internal customers to the exclusion of their external customers, these professionals remove themselves from the language and logic of the business and potentially miss an important opportunity to add value. This gap represents a significant opportunity for development. As a profession, HR has not yet broadened its perspective outside the organization's boundaries.

Regression of Performance with Sub-factors

Which of the two sub-factors comprising Strategy Architect is most closely associated with high performance? As can be seen in Figure 4, the statistical relationship1 between Sustaining Strategic Agility and performance is stronger than the relationship between Engaging Customers and Performance. This finding is true for the HR and non-HR respondents alike; although the difference is even stronger for non-HR associates.

While Sustaining Strategic Agility is more strongly related to individual performance than is Engaging Customers, the relationship between Engaging Customers and performance is noteworthy, especially given the weak score on Engaging Customers as rated by non-HR associates (2.44 out of 5). This also may be a situation in which competence in one factor enables contributing to another. Getting to know the external customers of your business and their needs is one of the best ways to broaden your strategic perspective, credibility and ability to contribute to strategic decision making. This represents an area in which HR can add greater value as it enhances its performance in creating more customer-focused institutions.

Becoming a Strategy Architect

Based on this research and our experience in applying it, we suggest there are five ways HR professionals can better play the role of Strategy Architect.

1. Facilitate the strategy-creation process.

Traditionally, HR has not been involved directly in determining business strategy. The content of business strategy most frequently originates in the business disciplines of finance, marketing, planning or manufacturing. While HR professionals historically did not provide the content for business strategy, they frequently have had opportunities to facilitate the strategy-formulation process (Worley, Hitchen, & Ross, 1995). When these opportunities surface, seize them! If such opportunities do not surface, HR professionals can create opportunities by partnering with finance, marketing, manufacturing or other executives.

As you prepare to facilitate a strategy discussion, ask yourself the following questions. Are the right people in the room? Have you involved leaders who will need to buy in to the strategy so it can be executed effectively? Are the right people speaking up? Is the timing right ? What is the agenda for the meetings ? Are the right questions being asked? Is the voice of the customer present? HR can (and should) play a very active role in facilitating the ongoing series of conversations that make up the strategy-creation process.

2. Help clarify and articulate the strategy.

HR can make substantive contributions by "taking the strategy to the masses" through clarification and communication. This means helping craft strategy as a story that can be shared inside and outside the organization.

Studies reveal that only one-third of workers feel empowered to reach their most important goals, and only about 40 percent of workers clearly understand their most important goals (Franklin Covey XQ Survey, 2009). Clarification and "line of sight" are key. We have sat through many meetings in which consultants and executives present hundreds of slides documenting their market analysis and proposing multitudes of strategic and operational options. Our reaction often is to raise our hand and ask, "So, in one sentence, what is your strategy?" Unless that question can be answered in 15 words or less, using language that everyone in the company understands, the company lacks a clear strategy. We have called this creating a strategic story that can be shared both inside and outside the company, that captures minds and hearts, and that moves people to action.

A good example of strategic clarity is Mill Steel, a family-owned steel-processing business in western Michigan. Theirs is a little-engine-that-could story. The company leadership faced stiff competition and a unionized workforce. For the past five years, due to its progressive strategy and approach to growth, Mill Steel has been named one of the 10 Elite Winners of West Michigan's 101 Best and Brightest Companies to Work For by the Michigan Business and Professional Association.

Mill Steel's leadership team, together with the rest of its employees, is crystal clear about its strategy: Get the customer what they want when they want it. This mantra is communicated throughout the organization and it is reinforced through HR practices. For example, its performance-based bonus system has created a culture of ownership. The organization includes staff in discussions dealing with business planning for the future and provides a monthly forum to allow all staff to openly discuss opportunities and challenges with the leadership team.

Mill Steel's attention to aligning people practices with the overall business strategy has allowed it to build an environment that inspires ownership at all levels of the company. As a result, in a rapidly changing environment, Mill Steel has found a way to provide a level of service far greater than their competitors.

3. Ensure execution of strategy by aligning HR practices.

Aligning HR practices to strategy means that each investment in HR should reflect the strategy and realities of external customers:

* In staffing, are future employees hired because they have the skills that the strategy implies?

* If someone were to look at your training curriculum could they discern your strategy?

* If you shared the standards (behaviors and outcomes) that are the backbone of the compensation system with customers, would they be delighted that your employees are rewarded for exhibiting behaviors and outcomes they--the customers--value?

* Are communication tools (executive speeches, Web site, annual reports and newsletters) consistent with the strategy?

* Are people hired and promoted with a clear line of sight to key customers?

* Is the organization designed to easily and quickly deliver the strategy?

The alignment questions probe the extent to which HR investments drive strategy. Simply by looking at your HR practices, can you capture the strategy of your business?

Likewise, high-performing HR professionals recognize that everything that is done in HR communicates important messages about customers and the business strategy throughout the organization. Because information about customer requirements is so critical, HR professionals should ensure that each system, practice and activity communicates messages about present and future customer direction and requirements. They do this as they design and deliver training programs, develop the criteria for recruitment and promotions, formulate and implement measurements and rewards, and structure organizations for business success.

Alignment with strategy and customers also ensures that diverse HR practices are integrated. Integration means that changes in any one HR practice will be consistent with other HR practices. For example, Apple's commitment to growth through product innovation requires hiring, paying and training for creativity and diverse thinking. Communications and organization design issues also revolve around innovation (Cruikshank, 2005).

As Strategic Architects, HR professionals diagnose and design aligned and integrated HR practices so that strategic aspirations show up in daily HR actions.

4. Align leadership behavior to strategy.

Making strategy happen comes through the direct alignment of HR practices with the business. A large part of this is ensuring that leadership behaviors are aligned with business and customer requirements. HR professionals can clearly articulate what leadership knowledge and behaviors align with strategy. They can turn these expectations into clear competencies and performance standards. They can assess the extent to which leaders demonstrate these behaviors. They can coach leaders to make sure that leadership actions are congruent with strategic intent. And, they may even track a leader's calendar to ensure that his or her personal time matches the organization's goals.

A global strategy should translate to leaders spending time in global markets. An innovation strategy should be reflected in leaders spending time in R&D and with new product and trend-setting customers. A cost strategy should show up with leaders focusing on process improvements and efficiency efforts.

5. Bring the view of the outside customer in.

HR professionals too often see their customers and clients as line managers and employees within the organization. To be an active part of any strategy discussion, they must change their mindset--their vocabulary and logic--to focus on the external customer who is the same customer for the rest of the leadership team.

High-performing HR professionals get to know the motives, drives and needs of external customers. As they have knowledge of these external requirements and translate that knowledge into relevant actions, they undertake different HR agendas than those in HR who are primarily internally focused. These customer expectations show up in who is hired (being the employer of choice for employees customers would choose, designing training from a customer point of view, setting standards that would appeal to customers).

Aside from simply understanding the customer, HR professionals are unique in their ability to work across boundaries. Customer information is best in the hands of competent HR professionals who are Strategy Architects because HR systems and processes can then focus on meeting customer needs. They can facilitate the sharing of information to build the company's brand, not just externally, but internally too.

HR can engage customers through two mechanisms. HR professionals can involve customers through their presence; that is, directly including customers in designing traditional HR practices as Marriott has done in designing the performance evaluations for their hotel managers. They also may involve customers through their essence; that is, indirectly involving customers by ensuring that customer ideas and inputs are in the room even if they are not physically there. Nordstrom has done this in defining the Nordstrom culture and its supporting HR practices.

The marketing department can provide much information on current and targeted customers. Digest this information. Assess how well your internal processes (hiring, training, rewarding, etc.) relate to outside customers. For example, ask key customers to look at your performance appraisal form and let you know if the behaviors and outcomes evaluated on the form are consistent with their expectations. Or invite key customers (or investors) into company-hosted training events so that employees can experience firsthand customer expectations. Then follow up with these customers. Ask, "Will the training you saw us providing our employees make them better able to meet your needs?"

Conclusion

Building your competency as a Strategy Architect is a significant way to demonstrate business leadership as an HR professional. For those in HR leadership positions or those interacting closely and frequently with line managers, the Strategy Architect domain is crucial. Of the two factors within this domain, Sustaining Strategic Agility has greater impact on business performance. However, getting to know your business's external customers and their needs is one of the best ways to broaden your strategic perspective and credibility.

In a world where HR professionals are finding themselves seated at the table, it is crucial that they add substantively to business discussions. By recognizing their role as Strategy Architects and focusing their efforts not only on aligning the HR strategy (which is important) but also playing an active part in creating and executing the customer-focused business strategy, HR professionals prove that they should be sitting with the management team. And they can make themselves an indispensable part of that team.

References

Bossidy, L. and R. Charan (2002). Execution: The Discipline of Getting Things Done, New York: Crown Business.

Brockbank, W; D. Ulrich & D. Johnson (2005). "So, We Are at the Table. Now What?" The Human Factor, 2: 46-55.

Cruikshank, J. (2005). The Apple Way, New York: McGraw Hill.

Franklin Covey XQ Survey (2009). Accessed February 10, 2009, at www.franklincovey.is/files/XQ.pdf.

Gerstner, L. (2002). Who Says Elephants Can't Dance: Leading a Great Enterprise Through Dramatic Change, New York: Harper Collins Business.

Hussey, D. (1998). Strategy Management: From Theory to Implementation, Woburn, MA; Pergamon Press.

Murrell, A, S. Forte-Trammel & D. Bing (2008). Intelligent Monitoring: Create Value Through People, Knowledge and Relationships, Westerford, MA; IBM Press.

Pettigrew, A., H. Thomas & R. Whittington (editors) (2001). Handbook of Strategy and Management, Thousand Oaks, CA: Sage Publications.

Saloner, G., A. Shepard & J. Podolny (2001). Strategy Management, New York: John Wiley & Sons.

Ulrich, D., W. Brockbank, D. Johnson, K. Sandholtz & J. Younger (2008). HR Competencies: Mastery at the Intersection of People and Business, Arlington, VA: Society for Human Resource Management.

Ulrich, D., W. Brockbank, A. Yeung & D. Lake (1995). "Human Resource Competencies: An Empirical Approach," Human Resource Management Journal, 34:4-14.

Worley, C., D. Hitchen & W. Ross (1995) Integrated Strategic Change, Reading, MA: Addison-Wesley.

Xun, Z., H. Rabah & S. Weber (2008). "An Auto-Adaptation Method for Dynamically Reconfigurable System-On Chip," Symposium on VLSI, 2008. ISVLSI "08. IEEE Computer Society Annual, April 7-9: 499-502.

Research Methodology

The following is a brief summary of our research process. For a complete explanation, please see Appendix II in HR Competencies: Mastery at the Intersection of People and Business (Ulrich, et al., 2008).

Sampling

As in past rounds, in 2007 of the Human Resource Competency Study (HRCS), we partnered with organizations around the world:

* United States and Canada: Society for Human Resource Management (SHRM)

* Latin America: IAE School of Business in Argentina

* Europe: Irish Management Institute

* India: National HRD Network

* China: Tsinghua University 

* Australia: Australian Human Resource Institute (AHRI)

Through their cooperation, we were able to gather data from more than 10,000 respondents, both HR professionals and line management. In our effort to provide the most balanced study possible, we asked our partners to solicit responses from companies that best described the demographic conditions of the area. For example, in the United States, there are many small- and medium-size firms, so we wanted a representative sample. As a result, we had more small- and medium-size firms in our database than ever before. Likewise, in China, many businesses are state-owned enterprises, so our Chinese partners solicited information from state-owned enterprises as well as privately and publicly held companies.

Respondents

To gather data from the large number of companies, we relied on a 360-degree methodology that allowed us to look at the expected competencies of HR professionals from multiple perspectives. At times, what is expected of HR professionals might best be understood by those outside of HR who use their services. At other times, only HR professionals can understand what is expected of other HR professionals. Figure 5 describes the three general classifications of respondents and provides the total sample size for each.

Survey Questions

In the first round of the HRCS in 1988, the competencies and practices included on the survey were identified through a combination of literature search and interviews with 150 HR professionals and industrial psychologists.

In subsequent rounds, including the 2007 round, in cooperation with our regional partners, we looked at the previous survey and identified questions that did or did not explain the performance of HR professionals. We also examined trends in the profession and added questions that reflected current HR challenges while keeping a core set of questions. We find that in any given round, about 50 percent of the questions are new to reflect changes in the HR field.

We used a multi-dimensional business-performance measure. We asked respondents to evaluate their companies on four types of business performance:

* meeting customer requirements;

* meeting owner/shareholder requirements;

* being competitive; and

* financial management.

We then took the average of their scores on these four items. The average constituted our business-performance measure.

Analysis

We used factor analysis to identify factors using exploratory methodology. We performed factor analysis in two steps:

* Primary factor analysis: We examined 130 survey items pertaining to the competency of individual HR professionals and performed factor analysis to determine content of the resultant factors.

* Factor analysis on the items in the initial factors: We performed factor analysis on items within each of the primary factors as described above to define a deeper level of granularity in the model.

Once these factors and sub-factors were established, mean scores were calculated for each to determine performance. Regressions of the business performance measure were run against of each factor and sub-factor

Dave Ulrich and Wayne Brockbank, Ross School of Business, The University of Michigan, and The RBL Group

Dani Johnson, Ross School of Business, The University of Michigan

Dave Ulrich, Wayne Brockbank and Dani Johnson are professors at the Ross School of Business at the University of Michigan, Ulrich and Brockbank are also partners at The RBL Group.

FIGURE 2: MEAN SCORES ON MAJOR COMPETENCY
DOMAINS BY RESPONDENT TYPE

                                HR            HR         Non-HR
Domain                     Participants   Associates   Associates

Credible Activist              4.16          4.23         4.14
Culture & Change Steward       3.80          3.84         3.75
Talent Manager/
 Organizational Designer       3.73          3.80         3.76
Strategy Architect             3.49          3.67         3.58
Operational Executor           3.47          3.58         3.63
Business Ally                  3.39          3.55         3.48

FIGURE 3: OVERALL MEAN SCORES BY RESPONDET TYPE
(ASSOCIATE RATERS ONLY)

                                HR            HR         Non-HR
                           Participants   Associates   Associates

Sustaining
  Strategic Agility            3.54          3.72         3.62
Engaging Customers             3.33          3.47         2.44

FIGURE 4: BUSINESS PERFORMANCE BY HR VS. NON-HR

                                HR          Non-HR
                            Associates    Associates

                               R^2           R^2

Sustaining
  Strategic Agility           0.116         0.068
Engaging Customers            0.089         0.033

FIGURE 5: RESPONDENT TYPES

Respondent
Type           Definition                             N

HR             HR participants who completed the    1,669
Participants   self-assessment and nominated
               associates to complete on their
               behalf

HR             All associate raters who work in     5,048
Associates     HR and who completed the survey
               on behalf of an HR participant

Non-HR         All associate raters who work        3,346
Associates     outside of HR and who completed
               the survey on behalf of an HR
               participant

All            Total of all participants, HR        10,063
Respondents    associates and non-HR associates

i. The statistics that are reported here are R-squares.
These statistics represent the magnitude of the
relationship between each of the sub-factors and the
performance of the HR professional participants and
their associates who completed the respective 360
evaluations. The larger the R-square, the
greater is the magnitude of the relationship.