Belling the HR cat
In my conversations with CEOs and other senior leaders, I often hear frustration and disquiet with the leadership of their Human Resource function. Because my work is in strategy, they express disappointment with the role he/she is playing in the formation and execution of strategy. They believe that their CHRO (Chief Human Resource Officer) does not understand their role in charting the strategic direction of the company and in leading the charge for the people in the organization to be empowered, productive, involved and committed. HR leadership, they say, is operational, reactive and inflexible, keepers of the status quo rather than the strategic partners they require. They want HR leadership that is at the edge of innovative thinking about how to align people with strategy.
Having had the fortune to work with many bright, committed and hardworking HR practitioners, I have come to believe the problem is less about them and more about the following:
- STRUCTURE: In my early days of consulting, I would see organisation charts that placed the HR function BENEATH another function, usually Finance. The HR person was far removed from the CEO, and so there was little interaction at the strategic level. Fortunately, this has changed. However, there are very few CEOs who have made it to the top through HR, other than perhaps a “stint” in HR. Thus, the function is still viewed as one of lesser significance.
- HISTORY: HR Management emerged from the old paradigm of Personnel Management and Industrial Relations which were strictly tactical functions. I see much confusion about the role of the HR Division in managing people vis a vis the role of individual managers. I still see instances of so and so being sent to HR as a way of managers sidestepping their responsibility for dealing with their people.
- GENDER: Since I am speaking frankly, I believe there is a gender element as well – most HR leaders are and have traditionally been female, relegated to space beneath the glass ceiling – along with their function.
I recently came upon this article by Ram Charan “It’s Time to Split HR” (click to view article) that validates some of my observations and posits a solution: split HR into two “strands” – HR Administration and HR Leadership and Organisation. The former would report to Finance and the latter to the CEO. The proposal is worthy of serious consideration, along with even more “out of the box” solutions such as not having an HR function at all, as Ricardo Semler of SEMCO in Brazil does: click to view article
Every CEO acknowledges how important people are to their strategy. It is time to fix “the problem with HR”.
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Please post your thoughts at the end of this article, or e-mail me with your comments. I am eager to have an open and honest conversation about this – whether you are an HR practitioner trying to figure out how to be more strategic or a CEO or other functional leader wondering how you can best structure the HR function in your organization to ensure alignment with strategy.
INTERESTING LINKS
INTERESTING LINKS
The latest buzz is about Sir Richard Branson‘s new vacation policy – none!
– click to watch interview
And I must share this article on my pet peeve – our attachment to our smartphones (not so smart says this article):
– click to view article
A VP-HR e-mailed this comment to me. I asked her if I could share. She agreed, but wants to be anonymous. What are your thoughts?
Hi Marguerite.
So true!
We used to have all the managers at our monthly Managing Committee meeting. I am the VP-HR and I report to the COO who was the Director Finance, Admin & Compliance. I have stated over and over that it hampers the strategic mission when HR does not report to the CEO.
One day we were all advised by the CEO, that only the SVP’s were to attend the monthly meetings. Note that there is no SVP of HR, so I am the head of HR. What occurs now is that HR occasionally gets snippets of hand-me-down information from the meetings. I feel like I am operating blind. I have discussed this with the CEO, who really has no expertise in HR, and highlighted to him that only the revenue side of the business was represented at the meetings. There was a concession and I was told that they would invite me quarterly. To date that has not happened. Sadly, the organisation has taken note, because they are now of the opinion that they are not valued. They see HR as the person who looks out for them, and rightly so. After all, who else will? It’s not as if HR gets the minutes from the meetings…there is nothing. The recording secretary knows more than the VP-HR!
Something has to give….
I’m not surprised that you have been hearing ‘’quietly” J. HR is so used to getting slapped on the wrist, especially by persons who are clueless about how HR should really operate.
MaryAnne e-mailed me with this comment:
Well done, Marguerite.
I love the Semco story.
The other article about the splitting of the HR function might not be very different to a structure that I have seen in operation in several organizations. The split is between HR strategy, policy and systems and HR operational support where operational support is aligned with and has a reporting relationship to the business lines (not Finance). The operational support tends to hum along quite well as long as the HR strategy, policy and systems function is effective at carrying out its roles and the support that it provides to the operational side.
Regards,
Mary Anne
This is lot of food for thought. I support a split with a focus on employee development reporting to CEO as it can be tied to performance. I shall dig a little deeper.