Harley-Davidson Motor Company: Strategic HR Function

Harley-Davidson, a manufacturer of high-end motorcycles, has enjoyed a great deal of business success, including not only a loyal customer base but also a loyal workforce. Despite this success, the company realized that it would need to tackle a number of HR challenges if it wanted to continue further along its journey to high performance and meet new challenges.

Accenture was able to support Harley-Davidson’s business improvement efforts by implementing the Accenture Human Capital Development Framework, which helped assess the company’s strengths and weaknesses. The analysis has also helped the company prioritize its human capital investments. Harley-Davidson has decided to focus first on those areas that require improvement. Read more about this change in our case study on HR practices.

The implementation of the Accenture Human Capital Development Framework has led to a number of exciting initiatives at Harley-Davidson to support their quest for high performance.

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Sometimes business success poses its own set of challenges. That was the experience of Harley-Davidson, the manufacturer of high-end motorcycles. Having recently celebrated its 100th anniversary as a company, Harley has enjoyed well-earned success in the marketplace. The company is known for the quality of its product and the loyalty of its customer base: Harley enjoys a 98 percent customer retention rate. The workforce, too, is extremely loyal. A sense of intense pride pervades the company. People want to work there, and the workforce has grown primarily from the inside, with existing employees bringing in friends and family to enjoy the good fortune of working for Harley-Davidson.

So what does a satisfied workforce do when the company must continue further along its journey to high performance and meet new challenges such as competition from lower-priced competitors, and expansion into overseas markets? With so much going right for the company, why “mess with success”?

Clearly the company was facing a number of HR challenges in implementing more aggressive strategies. Employee satisfaction is great, as long as the workforce is also engaged and not complacent. One looming issue for Harold Scott, the vice president of HR for the company: HR has not historically been a major player at the company strategic table. One thing Scott knew for sure: If Harley-Davidson was to implement its new strategies, it had to bring its workforce along in the right way. It was imperative for the HR function to get right a number of basic issues with processes and technologies, to free up its HR executives to play a more vital role in company strategy.

Harley-Davidson turned to Accenture to support business improvement by assessing its HR strengths and weaknesses. We did this by implementing the Accenture Human Capital Development framework. Developed in conjunction with the Accenture Institute for High Performance Business, the framework enables organizations to gather information from a broad range of their personnel, including human resources directors, senior executives and other employees.

Results from a framework implementation highlight for organizations the investments in human capital processes and capabilities, and key performance drivers, that are mostly likely to produce the best business results.

This implementation at Harley-Davidson was also a part of a large analysis of the framework, conducted with 19 organizations in a variety of industries across the Americas, Europe and Asia/Pacific. This analysis, co-sponsored by Accenture and SAP, showed that companies can focus their human capital investments in several key areas that are more likely than others to help achieve high performance. Specifically, the testing underscored the importance of human capital strategy, supportive work environments, and employee development to the financial success of any organization.

Explains Harold Scott, “The goal with our implementation of the framework was to introduce a more metric driven viewpoint of human resources and to think about people programs in business terms. HR has always struggled to bring a tangible business case to the table. The business does not undergo a major initiative without some key underlying metrics critical to success; why should human resources be any different?”

By teaming with Accenture on this initiative, the company has been able to prioritize its human capital investments. Results revealed that Harley-Davidson was performing above the average in seven of the 13 human capital processes analyzed.

Scott decided to focus first on those areas that could use the most improvement. One was human capital infrastructure—that is, human resources information systems and transaction processes like payroll and benefits administration. Mastering this process, Scott felt, would not only provide an important foundation to improving the overall function, it would also increase the credibility of the HR organization in its efforts to become more of a strategic partner to the business. As a result of the framework findings, Harley-Davidson initiated a complete HRIS audit and strategy, which will enable the company to improve overall performance by offering employee self-service and a greater standardization and integration of processes.

Scott’s second priority was to focus on employee engagement, and on human capital strategy, another process that was relatively weak yet is strongly related to financial results. Framework results revealed that the process could be improved by using tools to track and report quantitative and qualitative workforce metrics, soliciting the feedback of employees as to the effectiveness of human capital programs, and prioritizing programs and processes according to the business benefit likely to be created.

The implementation of the Accenture Human Capital Development Framework has led to a number of exciting initiatives at Harley-Davidson to support their quest for high performance. The company is developing a three-year master plan of work and has also established an HR metrics role to monitor the most important metrics selected by the department. Workforce planning has also become a bigger topic of discussion, not just for HR but the broader enterprise, as well.

Explains Scott, “The Accenture framework validated the work we are doing in relation to our HR strategy. It was powerful how the Accenture framework linked to our business and related issues, providing an opportunity for us to calibrate where we are against other world-class companies and identifying the practical actions we can take to improve our HR function. We will use the results to fine-tune the work we currently have undertaken and set the pace for future actions.”