Disclaimer: Although the following content applies to general business strategy, the examples and applications used relate primarily to HR. However, the principles discussed remain relevant across all business functions.
Developing an effective HR strategy is one of the most critical responsibilities the people function holds. When done well, an HR strategy supports business performance, shapes organisational culture, builds workforce capability, enables the right leadership behaviours, and strengthens employee experience. When done poorly, it becomes a set of disconnected initiatives that drain resources, confuse stakeholders, and fail to deliver meaningful impact.
The task is not simply to “create a strategy” but to create the right strategy, one that is aligned, contextual, practical, understood, and executable. Yet across industries and global markets, HR strategies often fall short due to a set of common, predictable pitfalls.
Below, we explore these pitfalls in detail and discuss how HR leaders can avoid them.
1. Lack of Focus
One of the most prevalent issues in HR strategy development is the absence of prioritisation. When HR leaders are asked what is most important for their organisation, the list often includes: DE&I, engagement, L&D, retention, performance management, talent pipelines, and so on.
This lack of focus produces four damaging outcomes:
- Diluted impact: HR spreads its energy thinly across multiple initiatives, achieving little in each.
- Operational overload: HR teams become overwhelmed and reactive.
- ELT misalignment: When everything is a priority, executive confidence in HR direction declines.
- Resource waste: Time, budget, and effort are allocated to low-value activities.
Leaders must instead ask:
- What directly drives business success today?
- Which challenges are creating the most friction for the organisation?
- What must we fix immediately vs. what can wait?
- What will produce the highest return on effort?
Clarity of focus defines quality of strategy.
“If EVERYTHING is a focus, NOTHING is a focus.”
2. Arbitrary Strategies: Generic, Vague, and Meaningless
Many HR strategies fail because they are not actually strategies. They are vague intentions such as:
- “Hire great people.”
- “Develop our talent.”
- “Build a culture of excellence.”
These statements sound positive, but they do not reflect a real strategic choice.
A strategy requires:
- A clear direction
- A deliberate choice between alternatives
- A position that can be opposed or contrasted
The Opposite Test is a powerful way to check whether a strategy is meaningful:
“A strategy is only a strategy if its opposite is also a logical choice.”
For example:
- “We will always hire the right people.”
Opposite: “We will hire the wrong people.” → Nonsense → not a strategy. - “We will always deliver excellence.”
Opposite: “We will deliver mediocrity.” → Illogical → not a strategy.
Imagine your company strategy is to be the low-cost option in your market. The opposite would be to position the business as the high-cost (premium) option. Each of these represents a true strategic choice.
However:
“We will fully own the development of top talent.”
Opposite: “Employees will own their own development; we will minimally intervene.”
→ Two legitimate, opposing choices → this is strategic.
Strategies must reflect decisions, not aspirations.
3. Copying Strategies from Other Organisations
Benchmarking is healthy. Blind copying is harmful. Many HR leaders attempt to replicate:
- Strategies they implemented in a previous organisation
- Approaches presented at conferences
- Case studies shared by global brands
- What large companies like Google, Microsoft, or Netflix do
The problem? Every organisation operates within a different ecosystem. No two companies share identical:
- Business models
- Cost structures
- Organisational maturity
- Leadership behaviours
- Talent demographics
- Market pressures
- Cultural norms
- Historic practices
A copied strategy may therefore:
- Misalign with business reality
- Clash with organisational culture
- Create complexity where simplicity is needed
- Fail due to lack of readiness
- Distract focus from core priorities
A strategy must emerge from context, not imitation.
“What works brilliantly in one organisation may be disastrous in another.
4. Complicatedness: Overdesigning HR Systems
HR often suffers from an obsession with perfection and overengineering. The result is overly complex systems that look impressive on paper but are unusable in practice.
Examples include:
- Multi-tiered competency models
- Annual appraisal frameworks with excessive behavioural indicators
- Intricate job architectures
- Talent matrices with too many decision rules
- Reward mechanisms that no manager fully understands
- Excessively long policies written for auditors, not employees
These systems typically fail because:
- Managers don’t have the time or capability to apply them
- Employees do not understand how to navigate them
- HR becomes the only department that knows how the system works
- Tools are seen as HR-driven, not business-enabling
Simplicity and usability outweigh theoretical completeness.
Employees think about:
- Delivering work
- Meeting deadlines
- Managing teams
- Solving operational problems
They do not think:
- “I must reference the competency model when I step into this meeting.”
- “I should consider Herzberg’s motivators as I delegate this task.”
If a system cannot be remembered or easily actioned, it will not be used.
5. Inside-Out vs Outside-In Thinking
Inside-Out Thinking:
In this approach, HR strategies, initiatives, and projects (solutions) often originate from the HR Executive (CHRO, CPO) and their senior leadership team. HR professionals are then directed to design and contextualise these initiatives, after which the CHRO/CPO presents them to the Executive Leadership Team (ELT) and CEO for approval.
Once approved, the HR team is tasked with rolling out the initiatives across the organisation, carrying the burden of convincing business units and employees of their value and relevance.
Typical flow:
HR decides the strategy → HR designs the solution → ELT approves → HR tries to convince the business.
Real-Life Example of Inside-Out Thinking:
An HR executive says to the team, “Let’s work on employee branding or corporate culture. I need the team to design the initiative/project, as I will be presenting it to the ELT next week.”
In this scenario, the initiative is driven by the HR leader, with minimal involvement from the HR team or business units in defining the underlying problem or its context.
Another indicator that Inside-Out thinking is being applied can be observed during regular HR team meetings. When questions about HR initiatives are posed, they are often met with silence. This typically suggests that HR professionals are either not fully bought into what is being implemented, do not understand the context or underlying problem (as it has not been clearly communicated), or are thinking, “Now you’re asking for input, but regardless of what I say, the decision has already been made.”
This creates:
- Low buy-in
- Limited relevance
- Solutions looking for problems
- Minimal adoption
- Frustration toward HR
Examples often include:
- Cultural initiatives designed without understanding employee reality or institutional context.
- Engagement surveys implemented because “HR or business always runs them”
- Performance frameworks created without manager input
Outside-In Thinking:
This approach begins by HR exploring real challenges and issues collaboratively, understanding the broader organisational context and business stakeholders providing feedback. Now, HR team develop concepts tackling these challenges, and test them in real operational environments for validation. The strategy emerges through co-creation.
Questions worth asking business units include:
- “Is this clear and relevant to your world?”
- “How would you apply this in practice?”
- “What would you change or remove?”
- “What could stop people from using this?”
Now once the solution is final and deployed after ELT approval, it already has real-world, operational practicality, stakeholders’ ownership which increase the success probability. This makes the Outside-In strategy democratic, contextual and grounded.
6. Being Solutions-Focused Without Understanding the Problem
You often hear the phrase “Let’s be solutions-focused” in business meetings. While the principle is theoretically sound, it is frequently misunderstood and misapplied, leading to poorly designed and ineffective business solutions.
Originally, this concept was intended to guide people management during problem-solving. It implies that when an issue is raised, we should avoid personal blame and excessive fault-finding, focus on resolving the immediate issue, and then examine the underlying causes, contributing factors, and how to prevent recurrence. It was never intended to suggest that the problem itself should be ignored or left undefined.
Consider the following HR example. An HR manager proposes launching an employee engagement survey. The HR Executive and the Executive Leadership Team approve the idea, and the survey is implemented. After two or three survey cycles, a simple but critical question emerges: “What problem are we actually trying to solve? Why are we still running these surveys?” Only at this point does the organisation begin to reflect on the underlying issue.
This scenario clearly illustrates a solutions-focused approach that lacks problem definition. A solution was proposed, approved, designed, and implemented before the problem was properly identified or understood.
Root cause analysis is the foundation of effective HR strategy. A more effective approach when designing HR solutions as part of a broader strategy is to begin with a clear root-cause analysis. This involves identifying the problem, understanding its context, determining the most appropriate solution, and only then moving into design and implementation.
Incorrect application:
Solution → Design → Implement → Context → Problem → Assess
Correct application:
Problem → Context → Solution → Design → Implement → Assess
7. Understanding Your HR Type: Structural & Cultural Context
To build an effective HR strategy, it is essential to understand the type of HR function operating within your organisation’s structural and cultural context. In this section, I refer to the Human Resource Management model developed by Dr Armin Trost, Hochschule Furtwangen University (HFU), Germany.
Understanding your HR type provides critical insight into how people decisions are made, where accountability sits, and which strategic approaches are likely to succeed — or fail.
What Type of HRM Does Your Organisation Have?
A. Hire & Pay
In this model, there is little to no institutionalisation of HR. The HR function is minimal and largely transactional, focused primarily on hiring employees and processing pay.
Beyond these activities, HR typically does not exist in a structured way. There is no formal performance management, employer branding, structured learning and development, or HR information system (HRIS). In some organisations operating at this stage, the term “HR professional” may not even be used.
This model is most commonly found in very small, early-stage, or founder-led organisations.
Growing Institutionalisation
As institutionalisation increases, HR gradually assumes more responsibility. Rules, processes, systems, policies, and KPIs are introduced to bring structure, consistency, and governance. At this point, organisations typically evolve towards one of two high-institutionalisation models.
B. Central Planning & Control
This model is characterised by a high level of institutionalisation and central authority. A hierarchical structure is used to maintain stability, consistency, and control.
HR is responsible for nearly all people-related activities, including recruitment, learning and development, performance management, talent identification, and retention.
How does this feel from different perspectives?
1. People perspective:
Imagine you are a highly talented employee. You wait for HR to identify you as a high potential, formally communicate this to you, and—if you agree—HR then provides a defined career path outlining the required steps and development activities.
2. Business unit perspective:
A business unit requests new hires from HR. HR creates the job description, posts the vacancy, manages applicants, and oversees the process through to onboarding. The business unit checks progress periodically but remains largely dependent on HR. In effect, HR owns all people-related decisions and processes.
While this approach is less common in modern, agile organisations, it remains effective in environments with a strong hierarchical mindset and a preference for stability, predictability, and tightly controlled systems.
C. People-Centred Enablement
In this model, there is also a high level of institutionalisation, but authority is decentralised. The organisation emphasises agility, collaboration, and shared accountability, with the underlying assumption that people take responsibility for people-related matters.
Key questions are answered as follows:
- Who is responsible for people development? The individuals themselves.
- Who is responsible for identifying and nurturing top talent? The talented individuals.
- Who is responsible for hiring eight new engineers? The business line.
- Who is responsible for retention? The team.
HR’s role in this context is to enable, support, and open doors—not to control. Employees and business leaders choose their own paths and take ownership of their development and hiring decisions. Where guidance is needed, HR provides coaching, frameworks, and expert support.
Operational and administrative responsibilities—such as contracts, payroll, compliance, and core HR processes—remain with HR, ensuring governance without undermining empowerment.
Why This Matters for HR Strategy
The type of HR operating within your organisation will directly dictate how your HR strategy should be designed and executed. A strategy that succeeds in a People-Centred Enablement model will fail in a Central Planning & Control environment, and vice versa.
Understanding your HR type is therefore not optional—it is foundational.
I would be keen to hear your reflections on this model and to understand whether, over the course of your career, you have encountered one or more of these three HR types.
If you found this useful, please share it with others to support the development of HR strategies that genuinely serve both organisations and their people.