July 30, 2012 10 Comments
Everyone continually tells HR people that they need to become more strategic, that “HR needs to get a seat at the table”.
I have been hearing this admonition for decades, and yet beyond the advice that HR needs to get closer to the business, there is little real understanding of what this should entail from either side of the discussion.
I have always believed that HR organisations have to make the difficult transition from just being a Business Partner to becoming a Business Player, a Player being someone who is part of building the strategy rather than someone who only helps to implement a strategy built by others. (see HR … Polite to Police to Partner to Player posted August 26, 2010).
I also strongly believe that it is impossible today to build any business strategy, which can actually be successfully implemented, without “people” being at its core. One of the most critical elements of any successful strategy is always whether the culture (sum of the behaviours) in the company is in line with the strategy. For example it makes no sense to build a strategy whose success is based on creating a large, strong, loyal partner ecosystem if the company culture is one that sees partners as “a necessary evil of vultures that live off our success” (actual quote from a CEO). You need to change the attitudes and behaviours first to ensure that they support rather than oppose the strategy. While most companies struggle with doing this alignment in a way that ensures that they have at least some chance of succeeding, and the obvious fact that this is an area where any HR organisation that is worth keeping can add significant value, it is very rare that HR is actually asked to be part of ensuring that the strategy is executable from a people perspective.
So if this is so critically important today, why is it not happening ?
I think that the single core problem is that it is virtually impossible for most HR professionals to achieve this strategic status, despite it being at the heart of business success.
Firstly, very few business executives give their HR Organisation the chance to even try. Most CEOs in today’s tough business environment have a critical challenge to address, being “How do they cut the costs of running the company, so that they have enough money and resources available to go about changing the company to be able to meet the future ?”. HR, like IT, is seen mainly as just being part of “run the company” and so are being squeezed more and more as a part of cutting down on overhead costs. If HR cannot position itself as being an agent for change, it will never be accorded a position reserved for strategists who can add value by helping to “change the company”. It is a serious cleft stick for HR Organisations. At the same time as they are being told that they have to cut their costs and their manpower, they are being told that they have to become more strategic and more valuable to the business.
Secondly, the sad reality is that very few HR professionals would actually be able to fill the role of a strategist even if they should be given the chance to do so. Very few HR people that I have met over the last 40 years have any serious understanding of the underlying characteristics of the business that their company is involved in, and even less understanding of general business and market fundamentals. Even when attempts are made to try and educate HR people in their understanding of the business, it is rarely more than at a very superficial level.
Thirdly, even in their core areas of HR responsibilities, most HR professionals struggle with converting from theory to practice. The theories of key areas such as recruitment, engagement, succession planning and performance review and management are well understood and keenly discussed and debated by HR professionals. However, for example, very few recruitment strategies deliver future talent for the organisation, being based almost entirely on either selection from the best of what the recruitment net happens to land at that time, or the enticement of people from competitors who are currently in a similar role to the one needing filling. The first may bring in the best of what has been found, but not necessarily what is really needed, and the second “musical chairs” game may meet today’s need but is just playing-the-odds that it will be any benefit for the future. The same tends to be true with employee engagement, which is measured in employee satisfaction surveys and various employment metrics, but rarely translated into remedial actions that are agreed and are then actually implemented by line management. I have seen attempts to include employee engagement metrics in management bonuses with minimal success, and have even seen them being totally disregarded when a manager has made his financial goals despite leaving a mound of body bags in his wake.
Finally, very few HR professionals are tough enough to be able to change the situation. When faced with limited budget availability, it is a rare HR person who can win additional resources and funding for management development programmes for example, against the field organisations desire for more quota-bearing sales reps, or the engineering teams demand for more software developers for the next generation of products. This remains true despite the fact that the quality of management in any company is what drives nearly all elements of success, and that building the next generation of capable and skilled management for the organisation remains one of the key challenges for most companies today.
In the role of Global Head of HR in my last 3 years of a 40 year career mainly in business management, I came to understand the critical role that HR can and needs to play in a company’s success, but sadly I also came to the conclusion that it is also virtually impossible to actually achieve.