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Real-world Application of the Strategic Business Partner Role

Real-world Application of the Strategic Business Partner Role

Have you tried the Strategic Business Partner Role model for your HR department?

Mary Ann Downey | i4cp

May 06, 2010

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.

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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.

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