Yet such HR departments are typically the exception, not the rule. In fact, the HR model at many companies - particularly established ones that have been in business for a long time - is increasingly outdated and insufficient to help them navigate the current environment. In this model, HR still functions in its traditional role as a service provider that focuses on transactions, rather than as a true strategic partner to the business units. Most business problems are people problems - particularly in service industries - and this outdated HR model can prevent companies from making the changes needed to compete more effectively.

Conversely, if HR can adopt a more innovative and strategic role, it can have a positive multiplier effect. By optimizing company structures, strategically developing and deploying company resources, and thus ensuring that the company has the right human capital in place, HR can help it meet its business objectives and improve both financial and operational performance. To get there, HR functions will need to adopt more efficient, forward-looking ways of working and take on a far more strategic role to support the business. Many organizations understand this objective, but they are less clear about how to achieve it. This article will propose specific measures that HR organizations can take and illustrate how one company successfully applied them.

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