The Transformation Playbook: Elevating HR from Tactical to Strategic
The HR leader of the Houston Texans shares a career’s worth of game-changing insights on converting HR departments from taskmasters to strategic partners.
'Fate rarely calls upon us at a moment of our choosing.”
In the movie “Transformers: Revenge of the Fallen,” the human protagonist, Sam, is caught between two opposing sides and feels inadequate and overwhelmed. Optimus Prime, the leader of the Autobots, drops this famous line, telling Sam he must fight on because life’s most important moments typically occur when we least expect them and not on our own timeline.
In my case, when I chose HR more than 20 years ago, I had no idea my career would lead me down a path of specializing in change management that aligns HR transformations with organizational transformations. As the CHRO of the Houston Texans NFL organization, I am now in my fourth consecutive role of entering an organization at a moment of transformation.
In my first HR leadership role, I didn’t quite grasp the enormity of the expectations. I was simply asked to “make HR better.” By then—about 10 years into my HR career—I had sharpened my skill set to know what good HR should look like. (I had lived through enough bad HR to know the difference.) My second role was an opportunity to establish the U.S. HR function of a global organization. Next, I worked within a different global organization under the mandate to upskill HR professionals toward the goal of “HR on Purpose.”
In these experiences, I learned how to systematically approach change management, especially with the HR professionals around me who weren’t initially on board and relied on the cringe-worthy “This is how we’ve always done it” mentality. (Yes, HR people say that, too!)
My current change-agent role is in an industry in which I had no experience (sports), and it marks my departure from a large, publicly owned corporation to a privately owned family business. Yes, an NFL team is about as “public” as you can get with sports being a universal unifier. But behind the scenes, the Texans’ organizational direction comes from a few key stakeholders.
Based on these collective experiences, here are a few of the lessons I’ve learned in leading HR transformations.
First, Understand the Organizational Strategy
Before you can start an HR department transformation, you must understand the overall organizational strategy. Is this HR transformation happening together with or independently of the organization? How does the organization view the HR function: as a partner to the business or as a part of the business?
It’s important to understand how the HR department is viewed in your organization. If HR is seen solely as the administrative hire-and-fire department, any strategic changes in the HR department won’t translate well across the entire organization. Others within the organization might not even know that change is happening or has happened.
Whether the HR transformation happens independently or along with organizationwide changes, its alignment with the organization’s strategy and the role HR plays is vital. A strategic HR professional must be able to evaluate the business, understand its short- and long-term strategic goals, and identify the areas where HR has the biggest impact and adds the most value. Note that I didn’t say “should” add value. If we’ve learned anything from the pandemic years, it’s that HR does have value.
Align HR Strategy with That Big Vision
I am a firm believer that HR should have its own strategy. That strategy should align with the organization’s strategy and articulate the role that HR plays in helping the organization achieve its short- and long-term goals.
If the organization is in growth mode and projected to grow revenue by 15% in three years, HR should have a people assessment and growth strategy that focuses on things such as taking skills assessments of current talent, identifying gaps, and planning for the upskilling of current talent (or sourcing for external talent).
The HR strategy should reflect how HR wants to be perceived in the organization. It doesn’t need to be overreaching or complicated, but it shouldn’t be simplistic, either. When working toward moving the HR department from tactical to strategic, having an HR strategy as to how that will be accomplished goes a long way in establishing and creating new expectations for the organization.
The HR strategy is the starting point to undertaking a transformation. If you don’t know where you’re going, or why, you’ve lost the battle before it’s begun.
The HR strategy is the starting point to undertaking a transformation. If you don’t know where you’re going—or why—you’ve lost the battle before it’s begun."
Know Your Current Position on the Tactical vs. Strategic Spectrum
The terms “tactical” and “strategic” are very common in HR, and they mean different things in different organizations. Tactical HR is focused on shorter-term, immediate, and reactionary actions. There will always be hirings and terminations. And you can’t predict which employee issues will arise, but you can predict when: literally all the time!
Strategic HR is focused on longer-term actions and requires you to be proactive. For example, it might look like being part of discussions during budget season to determine the new headcount needed, reviewing staff performance to identify high-potentials who are ready for training or promotion, and analyzing growth models to ensure people capacity for immediate and future needs.
Where is your HR department on the tactical versus strategic spectrum? It’s critical to understand where your department currently sits as it relates to how much of its focus, mindset, and time is spent on tactical versus strategic duties.
In one organization where I previously worked, I was repeatedly told during the interview process that the HR team consisted of administrative, tactical professionals that had never been exposed to the strategic side of HR. After the first few months, I discovered that the team had, in fact, been performing strategic activities, but they just weren’t equating those activities with strategy. (More on evaluation of the HR team later.)
Over the years, it has become clear to me that unless your HR department is within an organization that uses a shared service model, you cannot transform it from tactical to strategic completely. There will always be administrative tasks that must be performed, and the challenge is learning to balance those tasks with more strategic ones.
If the focus is to lean in to more strategic activities and your organization doesn’t have a shared service model, look into ways to reduce the HR department’s tactical focus. Can you hire executive and recruiting firms to source talent? Can you outsource payroll? Can you outsource employee relations issues to an employment lawyer or hire an in-house employment lawyer? All these actions require alignment with the organization’s budget and how its leaders think the HR department will provide the most value.
Adapt Your Processes and Policies for Change
Now comes the hard part. Once you understand the organizational strategy, establish the roots of an HR strategy, and determine the correct balance on the tactical-to-strategic scale, it’s time to focus on the three P’s of change. The first two P’s—processes and policies—are controllable systematic changes. The third P—people in the HR department—not so much.
PROCESS CHANGE. Are your processes and policies set up for strategic success? An expansive assessment of the entire employee life cycle is critical.
Starting with the recruitment process, are you an organization that simply posts open positions and waits for candidates to apply? On a purely tactical level, this works. If you take a more strategic approach, recruitment should never be just about enticing someone to one role: It should be about enticing someone to the organization.
Your organization’s career page should give potential new employees insight into the organization. It should showcase the culture, articulate the behaviors the organization expects from its employees, and highlight avenues for both horizontal and vertical career development and growth. If the website isn’t capable of conveying this information, make sure the posting is. Tactical = advertise a job. Strategic = advertise a career.
This also plays into the strategic approach of career development and retention, both of which are HR value-adds to the organization. As you evaluate the employee life cycle, it’s wise to conduct a thorough analysis of each process and its potential for a strategic adjustment, such as the outsourcing of recruiting or payroll to free up time to focus on strategic activities.
POLICY CHANGE. Internal policies are intrinsically linked to processes. If you are going to change processes to be more strategic, you must also change the policies governing those processes.
Keeping with the recruitment process, if the strategic focus is to advertise a career so that potential candidates can envision themselves being with your organization long term, are your policies set up to support the process? Is there a policy in place that determines how long someone must be in the organization or in a role before they can be promoted or apply for other positions? Does the organization offer tuition reimbursement or career development opportunities internally or externally? You can’t have a strategic, proactive approach that is limited by impractical tactical policies.
HR teammates who are reluctant to get on board with transformation pose the greatest challenge. You can have the most highly skilled HR professionals on your team, but if they are unwilling to embrace change, it is counterproductive to what you are trying to accomplish. You must get your own house in order.”
The Hardest Part: Bringing Transformation to Your HR Team
PEOPLE CHANGE. The most difficult—and most important—aspect of being a change agent and transforming HR departments from tactical to strategic is the people in the HR department. In each of my roles, I went into a new organization with no prior knowledge of the performance or capabilities of the inherited HR team. In addition to assessing the department from a broader organizational perspective, I had to assess whether we had the right people in the right positions to support the transformation.
Unless you are a department of one, the HR team must be aligned with the strategy and vision of the HR leader. How you formulate the vision depends on the circumstances. If you’re undertaking an HR transformation in your current organization, involving the HR team will result in better buy-in. If, like me, you are going into a new organization, having a vision loosely formulated might be a better route. The vision should be broad and overarching enough that it could be implemented into any organization while allowing for adjustments to be made as you acclimate to the organization and its HR team.
As the HR leader, you have the responsibility to determine if your team is capable and willing to support a transformation. The two are not mutually exclusive. The team may have the capability and not the willingness, or they may have the willingness and not the capability. The latter scenario is an easier challenge to tackle.
HR teammates who are willing to embrace the change but don’t necessarily have the needed skill sets—such as critical thinking, business acumen, and organizational presence—can be coached and mentored. However, if they have these skills but are unwilling to look at things differently or understand the need for the transformation, that’s a major challenge. If you can’t get HR people on board with change, how can you expect to influence the organization as a whole?
When evaluating whether the HR team has the necessary skills, it’s important to thoroughly understand what each team member does and if their activities are tactical or strategic in nature. As I previously mentioned, one team I inherited had no idea that some of their responsibilities and tasks were strategic in nature until I conducted a job analysis.
Part of this was because the correct HR language was not being used. Terms such as “organizational development,” “career path,” and “succession planning” were not part of their everyday vocabulary. Words matter. For example, the HR generalists in that company were involved in meetings during which their opinions on headcount and performance were taken into consideration. They didn’t associate that responsibility with being part of strategic organizational development or career development: They just looked at it as part of their job.
HR teammates who are reluctant to get on board with transformation pose the greatest challenge. You can have the most highly skilled HR professionals on your team, but if they are unwilling to embrace change, it is counterproductive to what you are trying to accomplish. You must get your own house in order.
In a previous role, I encountered a situation in which some long-tenured HR professionals who knew I was coming in to bring change somehow didn’t think change was going to happen for (or to) them. They expected the organization to change around them, but they didn’t expect that they would need to change, too. I was able to move the work forward once I prioritized making difficult decisions and having difficult conversations with those teammates.
Change Matters
At the beginning of this article, I mentioned that the “Transformers” character Sam was caught between two opposing sides. In HR transformations, you will always run up against opposition to change. Prioritize the voices that matter, not the voices that are loudest—even within your own HR team.
I’ve come to realize that an HR transformation reaches far beyond me. It’s about the organization, the people who show up to work every day, and the difference we make in their lives and the lives of their families. I don’t advocate making change for the sake of change; I advocate making change because change matters.
Anita Martin is the vice president of HR and leader for diversity and inclusion functions for the Houston Texans.
‘On the Walls and in the Halls’:
How the Houston Texans Revamped Their Compensation and Culture
At the end of the 2020 NFL season, the Houston Texans faced tremendous change. Both the team president and the head of HR—each of whom had 20 years with the Texans—announced their retirements. The Texans’ ownership took the opportunity to embark on an organizational transformation.
A new president was appointed, and a vice president of HR position was created to align with this transformation. Working with an outside consultant, the Texans spent lots of time asking ourselves hard questions about how we needed to evolve internally before we could evolve externally.
Nothing was off-limits. New leadership positions were created, and the rightsizing and downsizing of departments occurred. HR was tasked with presenting to employees a new people vision of the transformation—our “charge.” It was a complete overhaul of what the Texans’ organization had experienced for 20 years.
During the process, we noted that many organizations had their mission and value statements “on the walls” but not necessarily seen “in the halls.” We refused to let that happen.
As a result, we decided it was essential to specifically define how teammates at every level of the organization were expected to behave. The ownership and leadership teams created 15 “Texans Teammate Habits” that consisted of:
- 5 Everybody Habits: Be dedicated to the team, be adaptable, have passion for the work, win with integrity, and own the outcome (see full definitions at right).
- 5 Manager Habits: Develop a “get better” mindset, make informed decisions, develop talent, build relationships, and drive results.
- 5 Leadership Habits: Inspire others, think strategically, lead change, identify talent, and be authentic.
Managers were expected to embody 10 habits, and leadership was expected to embody all 15 of the habits. The entire organization helped develop the measurements of success for each of the 15 habits. Teammates had input on what it meant to exceed, meet, or need improvement for each habit. It was a scale from bottom to top.
Adherence to the Habits = 40% of Bonus
Along with these new expectations of behavior came a new compensation element. Previously, bonus payments (outside of commission-based roles) were discretionary. Employees received no concrete and consistent guidance on who received a bonus—or why or how much. The compensation process was all over the board and did not present a structure of fairness and equity.
This changed as every teammate in the organization now became eligible for a bonus, with the percentage of bonus to be determined by the role. The bonus amount would be determined based on an overall evaluation score. Teammates would be evaluated on how well they were meeting functional goals as well as adhering to the habits.
After much discussion, it was decided that functional goals would account for 60% of the overall score and habits would account for 40%. This sent a clear message to teammates that it was important to meet their functional and work-related goals, but it was also essential how they behaved in meeting those goals.
By aligning performance and behavior with total rewards, the Texans created a high-performance culture that encourages teammates to work hard to achieve results and treat each other with respect and professionalism in the process.
The Texans’ 5 ‘Everybody’ Habits
Here are the behaviors on which all Houston Texans’ employees are rated, which affects their annual bonus potential.
- Be Dedicated to the Team. Motivate others and bring team members together to achieve collaborative results; actively share information and be willing to listen and learn; act in the best interests of the team and the organization.
- Be Adaptable. Effectively adjust to changes in work processes and environment; alter behavior to align with evolving situations; seek creative solutions; treat change as an opportunity for learning and growth.
- Have Passion for the Work. Believe one’s work makes a real difference; align day-to-day actions to longer-term goals and strategies; commit to one’s goals and inspire others to achieve their goals.
- Win with Integrity. Act in an honest, fair, and ethical manner; show consistence in words and actions; follow through on promises and commitments.
- Own the Outcome. Demonstrate accountability; refuse to deflect issues or undesired outcomes to others; make no excuses; lead with solutions.
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