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Does HR still have to be blown up?

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Years ago, as a newly minted human resources graduate, I was taken aback by an article in a business magazine titled “Let’s blow-up the HR Department”.  As I was ready to take on the world and save business through human resources management, I was concerned that perhaps I had made the wrong career decision.  The premise of that article was based on viewing the HR Department as an unnecessary overhead administrative expense that offered nothing to improve the bottom line.  HR was so far removed from the business heart of the organization that it seemed that blowing it up wouldn’t make one iota of difference.  As an HR consultant, I’ve seen countless organizations struggle with the role of human resources in their business.  The move from tactical to strategic has been downright painful for HR. The agenda to get HR at the executive table has been ongoing for the HR profession for over 20 years and still the human resources profession struggles to re-make and re-align itself from a service provider to a key strategic player supporting the business agenda.

The Deloitte Global Human Capital Trends 2015, Leading in the new world of work reports that only 30% of business leaders believe that HR has a reputation for sound business decisions, only 28% feel  that HR is highly efficient, and only 20% feel that HR can adequately plan for the company’s future talent needs.  This is a gloomy report card for HR to say the least particularly since CEOs and senior executives continue to be concerned about talent, culture and employee engagement, the leadership pipeline, and workforce capabilities.

What needs to change in order to re-make HR? HR professionals need to be immersed in the business of their organizations and in the language of business.  Business is about profit and growth.  HR needs to develop a clear line of sight to profit and growth by developing a solid understanding of the needs of the business and delivering value-added and innovative solutions.  Translating business strategic goals to HR strategic goals is a big part of demonstrating an understanding of the needs of the business.  Also, measuring the impact of HR programs in dollars and cents will get the CEO and CFO’s attention.  I have often considered the success of my fellow business school graduates who majored in finance and accounting and sit at the executive table.  Did they receive any education about business that was considerably different from HR majors?  All business school graduates learn the basics of business but the finance and accounting majors learn the “language” of business and the line of sight to the bottom line is clearer.  Perhaps part of the solution is to have our post-secondary institutions assess education content for students majoring in HR to ensure that business acumen is part of the curriculum.

Blowing up the HR department was a so-called ‘solution’ to the ineffectiveness of HR 20 years ago. The current solution for HR professionals is to develop credibility and respect as business leaders. HR professionals need to step up their game and develop analytical skills, understand the line of sight from HR to the bottom line, and learn how to communicate in the business language that CEO’s and CFO’s understand.  HR’s future credibility and reputation will be directly tied to demonstrated business acumen combined with foundational HR.

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About the Author:

Peggie leads both executive search at InTell Executive Search International and the performance improvement practice at Koenig & Associates. Her forte is organizational and individual performance improvement through pragmatic human resources strategies and executive coaching. Peggie lives in a part of Saskatoon she calls the Urban Forest. When she’s not bird-watching on her deck, she trains for marathons by running up the banks of the South Saskatchewan River.

Discussion

  1. Ryan Strate  July 14, 2015

    Peggie,

    I appreciate the opportunity to read your thoughts on the topic above. There is little doubt that having a seat at the big table requires a firm grasp of the ‘language’ of business and the ability to directly link HR action to meaningful organizational results.

    In your February post you discussed trust as the ‘glue’ that leads to positive and fruitful business relationships. I recognize strong links between your posts and the opportunity for HR professionals to bridge the knowledge gap between senior leaders and the workforce within any organization.

    As an operational HR practitioner, I have been lucky and challenged with a stake in management decisions and the subsequent need to turn those business realities into a shared vision for a workforce – workforce that is un-inspired when discussions of capital spending, NPV or balance sheet status is shared in a town hall setting.

    As more leaders come to the realization that a command and control style heroic leadership no longer produces the motivation to align strong organizational peformance, the HR professional is presented with a challenge that will ensure their contribution is value added. The following are realities that your posts suggest to me:

    – Business acumen for the HR professional is table stakes – a requirement
    – Without a concrete level of trust between leadership and workforce, alignment and in turn dependable results
    will not follow
    – Great opportunity for the HR professional lies in the translation of true business need down and throughout
    the organization
    – The resulting trust and engagement from the workforce will be the payoff

    Thanks again for your posts, I look forward to more.

    (reply)
    • Peggie Koenig  July 29, 2015

      Hi Ryan:
      Thank you so much for your response to my post. Trust with the senior leadership team and the workforce is a must and HR strategies can have a profound impact on how that trust develops. Too many times HR can make a strategic and tactical misstep that will have a negative affect on trust by both senior leadership and the workforce. It can take many years before those missteps are forgotten or forgiven.
      Coincidentally, I was very surprised to see the cover of the July/August cover of the Harvard Business Review “It’s time to Blow up HR and build something new. Here’s How” We are in good company!
      Best wishes
      Peggie

      (reply)
  2. Angie Flynn-McIver  August 6, 2015

    Peggie, your insights about this dilemma for HR are so valuable. I agree with you and with Ryan that being business-savvy is crucial for any HR or OD professional. I wonder, too, whether the growing cultural focus on meaningful and significant work and developing people will mean that the business-types will also want to reach across the table to HR?

    (reply)

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