This article is part of the Renegade Manifesto Series.

People are your organization’s number one asset. The building, the systems, the products – they’ll all become obsolete and they will all be replaced. Your people are your business.

The best companies understand this and use it to their advantage. The average companies – the ones that tucker along and never do anything remarkable – don’t. Or they do, but don’t have any type of cohesive people strategy.

Impact the bottom-line

Your HR strategies have a direct and measurable impact on the bottom-line. A study by Mark Huselid demonstrated that an increase in one standard deviation in scores on a “high performance HR practices” scale was associated with a 23 percent increase in accounting profits and an eight percent increase in economic value.

In layman’s terms, good HR equals top and bottom-line value.

This deliberate type of HR strategy is often referred to as human resource development. It means approaching HR like a business person and not a paper-pusher, babysitter or compliance officer. There are many components to HR development, but today I’m going to focus on just one: Aligning HR with your organization’s strategies.

How does your organization make money?

Every single HR renegade should be able to answer this question. And just saying, “We sell sneakers,” or “We provide solutions to complex business challenges,” doesn’t count.

If you don’t understand your organization’s specific strategy for making money, you can’t develop HR programs that support that strategy.

So where do you start? With a strategic analysis (not as scary as it sounds!). It’s actually pretty simple. Just follow these four steps.

1. Target Market

This step is really easy: Who is your customer, and what do you do for them? Dell sells computers to home and business users. Southwest provides non-business travelers with fast transportation to major locations.

Who is your organization’s customer, and what do you do for them?

2. Unique Value Proposition

Your unique value proposition (UVP) is what makes your organization different (and hopefully better) than the other organizations who do the same thing. How is Dell different from HP or Lenovo? Why would you want to fly Southwest over United or Jet Blue?

There are six potential UVPs:

• Quality
• Cost
• Service
• Time (how fast can you get your customers what they need)
• Unique Experience (think Disney World)
• Lifestyle/Status (Prada, Aston Martin)

Most company’s have more than one UVP. Dell’s primary UVP is cost, but they don’t say they’re cheap. They say they’re affordable. Their other UVP is quality. (There was a time, before they moved their call centers overseas, when they competed on customer service, too.)

Aston Martin makes a very high-quality vehicle, but they make no claims of affordability. Quite the opposite, when purchase one of their cars, you’re buying a lifestyle or status brand.

Nordstrom is well known for the customer service. They also sell high-end (quality) products. By contrast, Target also provides excellent customer service, but sells affordable products (as opposed to Walmart, which is even cheaper but offers shitty customer service).

What sets your organization apart for your competition?

3. Supporting Behaviors

Here’s where HR really starts to get involved. What do your people need to do to support your UVP?

For example, Nordstrom needs its people to go above and beyond, be prompt and attentive, and provide an unsurpassed level of customer service.

Aston Martin needs its engineers to pay attention to every single detail, no matter how minute. They need their assembly line to ensure every stitch in the leather seats is perfect. They need their quality assurance team to test every car and be certain that every engine delivers enough horsepower to push you back in your seat when your foot touches the accelerator.

In order to inspire your people to do things that support your business strategies, you first need to know what your people need to be inspired to do.

4. HR Strategies

How do your HR strategies – recruiting, training, performance management, compensation and benefits – support your UVPs and the behaviors that drive them?

If you were an HR dude or dudette at Nordstrom, you would…

• Source and select people with proven records of strong service,
• Evaluate people’s performance based on customer satisfaction,
• Provide customer service training,
• And tie compensation and bonuses to providing excellent service.

Do your HR strategies – the ones you have in place right now – support your UVP? Do they all work together? That’s HR development, and that’s what being an HR renegade is all about.

To learn more, check out my podcast on HR development, and keep an eye out for a future article on closing performance gaps. If you haven’t yet, you may want to subscribe so you don’t miss it.