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Fourteen years after the publication of Dave Ulrich's ground-breaking book HR Champions, organizations are still grappling with how to implement his recommended model for organizing HR to deliver optimum value. A key to that model is becoming a strategic partner, or what has come to be known as the creation of a strategic business partner (SBP) role. According to a recent i4cp study on the subject, Ulrich's proposal that organizations create a strategic business partner position has turned out to be challenging to both conceptualize and staff.

At the request of an i4cp member organization, we recently conducted a study to determine how the role of strategic business partner functions in high-performing organizations. For the purposes of the study, a SBP was defined as being "responsible for ensuring that the business or global function they support has the organizational capabilities, leadership and talent that are needed and to ensure that employees in those areas are engaged, motivated and rewarded to achieve both long- and short-term business objectives."

In essence, the effective SBP delivers value to the business through the work that they do. This is accomplished by providing strategic and operational advice, consultation and coaching. SBPs are expected to influence the senior leadership on critical organization and people-related issues and to help them achieve business priorities and objectives for which the business leaders are ultimately accountable.

Overall, 63% of study respondents reported that their organization has a SBP role. When looked at by organizational size and market performance, however, we found that 91% of large (10,000+ employees) high-performing organizations use a SBP role, compared with just 70% of their lower-performing counterparts.

But it turns out that most organizations are not placing all of the responsibility of the SBP function on one individual. Three-fifths of all the respondents reported that the SBP responsibilities were shared among multiple roles, and two-thirds of high-performing organizations reported distributing the duties among multiple roles.

Ed Lawler, Professor of Business at the University of Southern California Marshall School of Business and author of Talent: Making People Your Competitive Advantage, was not surprised by the i4cp study results. As he explained in a recent interview, there are distinctions between the "strategic partner" and "business partner" roles. The strategic partner role often resides with the head of HR and carries with it responsibility for providing "human capital information that will influence organizational decisions." The business partner function is more of an implementation role, and is responsible for "understanding the business needs to execute the human capital strategy." In large organizations it makes sense to distribute such responsibilities.

Our study indicates that a slight majority of large, high-performing organizations structure the SBP as a director role that reports to the SVP of HR (52%) and apparently acts as an HR leader for their business units. But, as we noted, there's no single standard on how to conceptualize or staff this position. Based on interviews with study participants, there are other models being used to implement a SBP role, and each has unique advantages.

For example, an SBP can be an HR professional who reports to line management with a dotted-line reporting relationship to HR. Our study shows that only 8% of organizations use this model, but Alliance One International, Inc., an i4cp member organization, is among them.

"If you want to assure alignment with the business, change the reporting relationship," says Mike McDaniel, SVP of HR for Alliance. The advantage of this model is that the SBP is part of the business unit management team that is directly responsible for the business outcomes.

In another model, a Center of Excellence (COE) develops the business-driven human capital strategy decisions and is advised by SBPs from individual business units. The advantage of setting up the role this way is that the COE gets direct feedback from the business unit when designing enterprise-wide initiatives. This creates a greater sense of camaraderie and forges an HR function that is more closely aligned with front-line situations.

While two-thirds of large high-performing companies have a job description and/or competency model describing the SBP role, many companies have yet to create one. In such cases, how do organizations select a candidate to take on the SBP role?

Part of the selection decision should be based on the traits of potential SBPs and how those traits fit the needs of the culture. A SBP should have "a real curiosity and interest in how the business makes money and [have] shown that they are open to change and able to learn," says Susan Layman, VP of HR at FT Services. Susan has successfully lead HR transformations in multiple organizations and says that these are the characteristics she looks for when filling SBP roles.

Our study indicates that, although there is no one-size-fits-all model for how the SBP role should look or be structured, the presence of a SBP does indeed provide real advantages for organizations. We recommend looking first at how successful organizations with similar needs have designed and implemented the role before deciding what structure will work best in your organization.

i4cp's 4-Part Recommendation:

1. Be committed to the SBP role and staff it wisely. Not every HR professional is cut out to be an effective SBP, so organizations should make a careful and thoughtful selection based on skill and business acumen. Organizations that give HR professionals the title of Strategic Business Partner without restructuring the work, communicating expectations, and providing the necessary tools are setting their SBP up for failure.
2. Balance and cooperation between the SBP and other HR professionals should be designed into the role. While the SBP may be at the "top of the food chain," as one executive described, they cannot be successful without the support of the operations staff. The performance of the SBP role should be evaluated by how well s/he utilizes the expertise of other HR functions and vice versa.
3. Create a succession plan for the SBP role. For many organizations, introducing the SBP role is part of an overall HR transformation; the selection and training is set up as a one-time event that may not be repeatable. Organizations should develop a career path for the SBP, including competency lists detailing the types of experiences and behaviors required to be successful.
4. Align rewards for the SBP that reinforce expectations of the new role. i4cp's SVP of Research, Jay Jamrog, believes that firms should use metrics that are tied to how the whole organization is doing in the marketplace, not just traditional HR metrics. Metrics should be "more outside-in than inside-out," he states. The key is to identify the human capital measurements that support the business and demonstrate impact, then reward the strategic contributions rather than the tactical or administrative efforts.

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