Looking to your lifeblood: Growing HR’s strategic role in the organization.

From the team that brought you Chicago Fire, Chicago PD, Chicago Med, and Chicago Justice, here comes the latest blockbuster drama about dedicated professionals in the Windy City! It’s Chicago HR! Get a sneak peek of life in the HR trenches, coping with the stresses and strains of trying to do your job while everyone else tells you how you should be doing it…

Ok, so that may never become the Next Big Thing on NBC. But why not? Why shouldn’t HR be held in the same esteem as firefighters or doctors?

HR exists to ensure the lifeblood of any organization—the people—are set up to succeed. A noble enterprise, particularly in a business climate where attracting and keeping top talent is more and more important to the bottom line. But too often, as critics rightly bemoan, the HR team ends up acting more like “policy police”, merely ensuring all the right paperwork is completed.

How do we change that?

Well, it has to start at the top, with a Chief HR Officer (the CHRO, a.k.a. Chief People Officer or CPO) who is a peer to the top executives in the organization. Enlightened organizations, or more specifically enlightened CEOs, create an office of the CEO that is comprised of the CEO, CFO and CPO. This establishes a triumvirate with the correct focus to address the three key markets in which the company competes: customer, financial and labor.1 And most importantly, as far as HR is concerned, it sends a clear message to all stakeholders that the HR function is as important as Finance, and a driver of strategic direction for the company.

Enlightened organizations, or more specifically enlightened CEOs, create an office of the CEO that is comprised of the CEO, CFO and CPO. This establishes a triumvirate with the correct focus to address the three key markets in which the company competes: customer, financial and labor.

Let’s look at why this makes sense. Studies have shown that a high-performing HR function has a
dramatic impact on overall business performance.2 This should be fairly intuitive; after all, a business strategy, no matter how excellent, can only be as successful as the team tasked with implementing it. And the best way to ensure a strong team is for HR to work closely with the business to bring in or train the right people for the strategic need, keep them engaged, and establish effective processes for them to be successful in the work—in other words, guide a people strategy. If HR’s main function is acting as the policy police rather than looking to the greater needs of the organization, we shouldn’t be surprised by a limited outcome.

Of course, all this means that the CPO needs the business and functional acumen to function (and deliver) at this higher strategic level. Frankly, it’s a criticism often levelled at HR leaders that they don’t have that kind of acumen. But I suspect there’s more qualified but unrecognized talent in HR, awaiting the opportunity to play that role, than there are HR leaders who are in that position but incapable. And many that appear incapable might be blocked by company leadership or culture from leading strategically.

The best way to ensure a strong team is for HR to work closely with the business to bring in or train the right people for the strategic need, keep them engaged, and establish effective processes for them to be successful in the work—in other words, guide a people strategy.

That said, any organization desirous of implementing a more strategic role for HR should focus on business and leadership development within HR. The career paths of CPOs should include “tours of duty” out in operations and other functions to gain a more rounded appreciation of the end-customer experience, business decision-making, and resource allocation.

But, other than that, how do you make the transition from PTO police to strategic partner? Here are two practical steps to set this change in motion.

  1. Take a lesson from those that have done this before. Finance emerged from the accounting function when people began to recognize the difference in the nature of the work, and we ultimately ended up with a division between the tactical and strategic parts. I’m not advocating blowing up HR into two distinct functions, as Ram Charan advocated recently, just recognizing the different focus of each element.3 Let’s play this out: the HR “bean-counting” (tactical stuff), such as benefits administration, payroll problems, and routine HRIS administration, can be handled by the HR equivalent of accountants. This leaves the likes of the CPO and the team of HR business partners (HRBPs) and staff in Centers of Excellence (in compensation, change, org development, etc.) to handle the creation and execution of the people strategy. And by people strategy, I mean all the programs in organizational performance and talent management that ensure the right people, with the right skills, are in the right jobs, and enabled with access to the right tools and systems, to execute that all important business strategy.
  2. Train and prepare your managers. A second part of the challenge is getting line managers to be true leaders and coaches, rather than micro-managers of work. In other words, setting and explaining the direction in which people need to go (leadership), and then giving advice and feedback on how it went (coaching). What does this have to do with HR playing a strategic role, you ask? Well, hear me out; in order for a strategic HR to be successful, a couple of things have to happen. First, HR needs its time freed up, and managers need to respect HR’s strategic/advisory position. Both of these objectives can be achieved if managers take on the coaching and leading role that is often shuffled onto HR (there’s a lot of other reasons for this, as well, including better engagement that comes with less micromanagement. After all, people like autonomy; it’s one of three key motivating factors at work.4 But I digress). If managers better understand their responsibility to be leaders and coaches, they are in a position to appreciate the help and tools that an empowered HR can provide. This can be particularly important as managers learn to have the more difficult conversations; it means that HR will take on the role of facilitator and advisor. And that, in turn, helps with the overall cultural shift of accepting HR as a strategic force—as well as helping to free up HR’s time. Of course, making improvements in all those processes is a whole separate topic too big to be addressed here!

Ideally, then, we’re looking at a high-performing team at the very top of the organization, made up of three strong players able to strategically address the customer, financial, and labor markets. This triumvirate must be a team who all respect the contribution that each member makes. Ultimately, that equality will not only create a stronger organization, it will cascade down through the organization as folks in the trenches experience a level playing field as well. We’re finally looking at an HR, then, that can focus on, and fully support, the talent ramifications of the organization’s strategic mission.

Tune in to NBC next week for the start of Chicago HR and see those dedicated HR professionals work their magic on the lifeblood of the organization… right?

 

About the author:

Marcus Scott, PeopleFirm
A founding partner of PeopleFirm, Marcus has 20 years of experience as a business thought leader. Both as a consultant and as an internal employee, he has helped a variety of corporations with their business and people strategies, external and internal marketing programs, and new product and service development. Marcus has maintained a passion and respect for the human element of organizations throughout his career. He is equally adept at both highly strategic projects that define how companies compete in the labor market and the day-to-day details of executing an employee survey program. His focus (some might call it an obsession) on structure and patterns enables him to convey complex information in easily understandable terms that can be translated into clear insight for executives, managers, and front-line employees alike. His current areas of focus include people strategy and driving high performance through employee engagement.

PeopleFirm is a management and HR consulting firm dedicated to helping you achieve that ultimate win-win: inspired people driving inspiring performance. We focus on effective tools, measurable outcomes, real results, and getting your people out of their seats and engaged in your company’s growth. We use people strategy, talent management, organizational performance, and change management, to help you partner with your people to build an organization that excels in today’s new world of work. People are your last competitive frontier. Make them count.

Your people = your success.

Want to learn more about how PeopleFirm can help your HR team be more strategic?

 

1. The assumption inherent in the 3-person office is that the CEO represents the voice of the customer in determining the business strategy, but clearly the CMO and COO (and the rest of the CXO team) have significant roles.
2. High-Impact HR: Building Organizational Performance from the Ground Up. Bersin 2014
3. Ram Charan. “It’s time to split HR” HBR July-August 2014.
4. Mastery and purpose are the other two factors (Dan Pink “Drive” based on the research of Edward Deci and Richard Ryan’s Self Determination Theory)