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How to develop an effective people strategy

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Article by 
Cascade Team
  —  Published 
January 27, 2023
June 7, 2023

The people make the place. Your business might have a stellar reputation and fancy office to lure new talent to the ranks, but you'll struggle to keep employees if you don't have an effective people strategy. A team that lacks alignment, engagement, and motivation is not built for success. 

69% of employees claim they would work harder if they were more appreciated. Suppose you want to develop a business that thrives in a competitive market in the digital age. In that case, you need to show people you value them.

Without a plan of how everyone is supposed to work together, and how everyone can do their most meaningful work as part of a team, you may as well hand the marketing budget to maintenance so they can install revolving doors.

Are you ready to learn how to empower your people and foster a culture to help your business surge ahead of its competition? It's time to master people strategy.

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Here’s what you’ll learn:

  • What is a people strategy?
  • Why do you need a people strategy?
  • How does people strategy relate to business strategy?
  • How to create a people strategy that sets you up for victory

What is a people strategy?

A people strategy is an organization's set of defined guidelines for attracting and developing talent, retaining existing employees, and ultimately inspiring its teams to work towards the same vision.

This strategy contains a broad set of human-centric guidelines that aim to improve the employee experience and inspire them to do more meaningful work. 

With this single source of truth on how your company views its people, you can increase retention and development by focusing on diversity, inclusion, and support throughout every facet of your company. 

An old-school approach to strategy tries to motivate people by lighting a fire under their backsides. The new approach to strategy aims to lift people by showing them how valuable they are to the company and giving them the chance to make the biggest impact. (It's the wind beneath their wings!) 

Why do you need a people strategy? 

Here’s a tragic tale that demonstrates how people strategy can make all the difference to whether your company hits its goals or not.

Manchester United is one of the biggest football clubs in the world. (Or if you’re in the U.S., you’ll call it soccer). When legendary manager, Sir Alex Ferguson, retired in 2013, the once-dominant force fell off its pedestal, losing ground to competitors at an alarming rate.

Despite spending over £1 billion on new players and managers, this sleeping giant continues to stumble through a barren spell of mediocre performances and whimpering early exits from every competition. 

On paper, the team has some of the biggest stars in the game. But there is an evident lack of alignment and motivation on the pitch. As performances continue to underwhelm, rumors spread like wildfire with talk of disharmony in the ranks, dressing room cliques, media leaks, and senior players doubting the manager's capabilities. 

The investment and the incredible talent should have paid off by now, but the trophy cabinet remains bare and dusty. Meanwhile, smaller teams with shallow pockets have won silverware, like the Leicester City team that won the league in 2016 with a squad worth £29 million. To put that in context, Manchester United's aging superstar, Cristiano Ronaldo has an annual salary of almost £20 million

So, how can a small and scrappy organization claim the market while an international powerhouse with some of the best global talent and infinite resources implodes like a raging dumpster fire?

It’s simple: it all comes down to the culture and how the company brings the people together. 

The Leicester City team of 2016 was a close-knit group that empowered every team member, whereas Man Utd is a fractured unit divided by a power struggle. Leicester City had a team, whereas Man Utd has a group of individuals. 

An effective people strategy makes all the difference. When you get it right, there is a lot to gain:

  • Engaged employees: An engaged team enjoys a 14% boost in total effectiveness. They are present, happier, and more fulfilled at work.

  • Empowered employees: An empowered employee derives satisfaction from their work. With complete support from all company levels, they can take ownership of their role and make a more significant contribution.
  • Business growth: A bottom-up model fuels a stronger culture than a top-down authoritarian approach. If your team embraces an all-for-one attitude, you can encourage employees to focus on their own personal development and the business's success.

  • Employee and customer retention: When you can retain high-quality talent, it improves the customer experience. As a result, they’re more likely to stick around and do more business with you. As Man Utd’s on-pitch performance levels remain as enjoyable as watching paint dry, fewer fans will buy tickets. 

  • Reputational benefits: As the word spreads that your company puts its people first, you will attract more top talent, company partnership opportunities, and overall goodwill towards your business.

  • Enjoyable workspace: All of the above aspects contribute to a vibrant workspace full of people who want to be there. You’ll have more fun than the crew from Parks and Recreation—and you’ll get much more done!

How does people strategy relate to business strategy? 

Your people strategy is different from your overall business strategy. But while they are distinct, their strategy outcomes are co-dependent.

  • A business strategy sets targets in an easily quantifiable way. You can track metrics just as easily as Man Utd keep count of the trophies they win (zero in five years). Your strategic plan outlines the actions, values, and objectives that matter and gives the entire team the context and clarity to move in the same direction.

  • A people strategy is less quantifiable. It focuses on the very people who are responsible for the on-the-ground execution. Team managers must bring together all the players and help them connect the plan to execution. It’s easier said than done. 

Ultimately when the two aspects come together, the result is often something much greater than the sum of the parts—which is how Leicester won the league with a team of bargain buys and unknown players. 

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Developing a people strategy in 7 steps

Your people strategy should outline how your company plans to develop a human-centric culture that fosters team alignment, clear communication, and positive collaboration. Let’s walk through the essential elements of a people strategy to see how you can succeed:

Step #1: Outline leadership expectations

Strong leadership inspires confidence and motivates employees, and that, in turn, improves accountability throughout the team. Right now, there are serious doubts around Man Utd’s captain—the error-prone defender, Harry Maguire. His season has been a catalog of calamity, not helped by media reports of a beef between him and the infinitely more experienced Ronaldo. 

When business management and human resources cooperate, you can ensure the right people have the right roles. In doing so, you improve the chances of strategy execution

Step #2: Write out company behavior standards

A people strategy should outline acceptable behavior for all stakeholders. When there are clear standards for the company, it helps build a strong foundation of trust throughout the team.

Consider how you would like interpersonal relationships to function within your business and set guidelines about what is and is not acceptable, both when dealing with each other and with other stakeholders. 

It’s also a wise move to clarify company policies around inappropriate, unethical, or illegal behavior. While conversations around such topics may feel difficult, having principles and a code of honor helps keep everybody on track. That kind of integrity is crucial for sustainable employee engagement and team unity. 

Step #3: Determine how you will support learning and development

How do you support and incentivize personal growth? Do you provide access to learning resources and encourage employees to upskill?

Financial incentives are always appreciated (ask Ronaldo). But throwing money at a problem doesn’t guarantee success (ask the Man Utd board that spent over a billion with little return). 

There are other ways to keep people engaged. When you put people first in your strategy development, you give them all a voice. This radically human approach encourages people to share information and take a more positive look at how they can get better—for themselves and the company.

If you want to stay ahead of your competitors, you should focus less on fancy tactics and more on developing your people. When you upskill your employees to take the most advantage of their work, it drives company-wide success.

Step #4: Decide how you will reward and promote

An excellent people strategy considers how you highlight and celebrate employee performance. How regularly do you want to reward achievements, and what do you consider worth rewarding?

Consider what performance and talent management methods you will employ. A Key Performance Indicator (KPI) model is a useful way to set and monitor business goals. Still, your long-term goals should be achievable—you'll get more out of your employees when they are riding high on a wave of achievement than when they are suffering from failure after failure. 

If players on a football team—or any team, really—are underperforming, they may need a rest. If management can take something off their plate, they can recharge and return with fresh ideas and enthusiasm. Conversely, if someone is on a hot streak, more responsibility and recognition can empower them to up their game.

Step #5: Create an inclusive environment

How can you ensure that everyone working for you feels included, safe, and at ease? The end goal is a culture of awareness and respect, where safety and mutual respect run from bottom to top.

Open communication is critical—keep established lines open for inclusivity-specific inquiries. Consider sharing ownership of the strategy between several employees from various backgrounds for a broad range of perspectives.

Step #6: Build channels for employee feedback

Employees are in the business' engine room. They have first-hand experience of how the company operates, and that is a valuable perspective that helps decision-making.

In football, managers call the shots. But your business is a little different (unless you're actually a football manager?). An autocratic style where the boss dictates everything is far from ideal. You'll struggle to keep everyone happy if you don't give them a say. 

Democratic leadership is much more effective. Nobody should be dismissed when it comes to strategy—everyone must have a say. Make sure there are clear lines for communication so everyone in the organization can raise concerns and propose ideas to relevant business leaders. 

Step #7: Establish key business priorities

Lastly, your people strategy needs to present a unified vision, so everyone understands what they are supposed to do—and why. You can clarify this aim when you write a good vision statement. When people see where they fit in as part of the bigger picture, they're more likely to try their best.

Give priority to the areas where improvements in work performance will have the most impact. And don't keep such details to yourself, either. Make every single person aware of your business strategies and how you hope to fix any areas of trouble. Strategy is useless if confined to a forgotten spreadsheet or notepad in the back of a drawer.

Start creating your people strategy

Your people are your greatest asset. When it comes to strategy execution, they must believe in the vision. More importantly, they must understand their role and feel connected to that big picture.

With the right people strategy, you’ll create higher employee engagement and satisfaction, vital to your success. After all, it is the people who make your strategy work, not the other way around.

Put more time into nurturing a healthy culture of collaboration and team alignment, and you’ll help your team do their most meaningful work. In the end, they’ll execute better and drive ideal business outcomes. 

Ready to get started on your people strategy? Grab your free HR strategy template pre-filled with examples and deliver a better employee experience in your organization. 

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