Executives repeat it over and over: “People are a business’ greatest asset.” So why, after 30 years of effort and analysis, do human-resource departments around the world still struggle to make themselves heard? Whatever the reason for the delay, it’s clear that HR can’t wait any longer to be made a strategic partner in the company’s most important meetings. As the world emerges from financial crisis, and businesses struggle to do more with less, now is the time for HR professionals to prove themselves indispensable to their companies.
In the recently published Chief HR Officer: Defining the New Role of Human Resource Leaders, the authors retrace the past three decades of HR. They discuss the 1980s, marked by new efforts of the departments to “sit at the table” and be an important voice in
decision-making meetings. These initial efforts moved in the right direction, but proved ineffective because “little knowledge of strategy existed in the HR community” at that time. By the 90s, HR was planted firmly at the table and business leaders theorized on how to best integrate the department within organizations. Towards the end of the decade the emergence of the “war for talent” made HR a department to watch and invest in.
So, what happened? The momentum faltered in the new millennium because corporate scandals like Enron led to increased transparency requirements, put pressure on succession planning made the public less trusting of corporations in general. All these problems were exacerbated by the financial crisis at the end of the decade and that has made it more important than ever for today’s HR departments to clearly define their role within the company and aid in the planning and development of the company’s strategic approach. In the end, “successful HR leaders must now have a vision for their company’s success, make decisions based on empirical evidence and accept responsibility for the results of those decisions,” J. Randall MacDonald, senior vice president, Human Resources at IBM, said in Chief HR Officer.
Ideally, HR departments are involved from the planning process for any new business strategy right from the beginning. The so-called “cost-center” likely has a wealth of research and data accumulated on company recruitment, executive and employee compensation, capabilities of the company’s employees, rising talent and weak spots. “This information can be indispensable when executives are looking toward company next steps” says Dan Lisac, vice president of client relations at vpi Inc. “The HR department plays a key role in identifying opportunities for stakeholders and stockholders. Businesses whose employees truly understand company goals almost always see increased returns.”
The toolbox carried around by HR professionals is unlike any other in the office. When supporting the business during the development phase, HR can call on its technical knowledge of change management—very often HR professionals are seen
as ‘change experts’. HR understands the importance of creating strong foundations of strategy, values and culture. Other departments can draw on HR’s experience of with employee recognition rewards and understanding the way employees will react to shifts in business focus. Who better to brief management on regulatory requirements or cultural sensitivities of a new project?
It can also be invaluable to spend time in other departments of the company and invest in some outside coaching or training to be sure all ideas and values align with the company objectives. A recent study done by Bersin & Associates looked at 720 companies representing a broad spectrum of global interests and industry types and found that while HR professionals are business minded, “they often lack the kind of data, process support and industry-level standards that leaders of other functions rely on for guidance.” That has meant well intentioned, but poorly executed transformational change at many large organizations.
William Spindloe, a learning and development consultant who has worked in HR for over 20 years, says that he thinks the biggest problem right now is a lack of strong business ideas. “Maybe it’s a sign of the times—a new post-crisis conservatisms which means no one wants to step out of line, or try anything new for fear they could put their position in jeopardy,” he notes. Spindloe suggests performing an audit on the HR department to judge if it’s innovative. This can be revealing. One model, the HR Activity Best Practice Index, looks at the way HR activities may or may not contribute to profitability. The Casual Chain method analyzes each job in HR from planning to implementation and how this is reflected in the results of the business.
When it comes to getting ahead and eliminating excess, asking questions can be as valuable as offering an answers. Other business leaders and executives in the company might be looking for HR to create a roadmap or prioritize company resources. Perhaps the need is metrics to gage success, or motivate employees – it’s important to set these expectations early. To that end, communication is perhaps the most valuable skill to develop. “Top HR leaders say that they spend nearly half of their time with senior business colleagues, serving as a strategic advisor and coach/confidante,” says Pamela O. Kimmet, senior vice president, human resources at Coca-Cola Enterprises in Chief HR Officer. “Therefore, it is important for you to understand that your success…will ultimately hinge on the effectiveness of the relationship you build with your new boss, the CEO, and your peers on the senior leadership team.”
Author: William Spindloe linkedin.com/in/william-spindloe-5993102
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