When attending conferences or any other gatherings of HR colleagues and peers, I experience over and over again a mixture of disappointment and huffiness about HR not receiving the appreciation it deserves, despite the fact that people are the most critical success factor for organizations. Everyone talks about Engagement, Leadership or Employer Branding, and these topics are identified as areas in which top managers have to excel. At the same time, many organizations struggle to retain and hire the right talent critical to mastering the challenges of digitalization and other mighty disruptions they face. Instead, articles like “Why we still hate HR” find broad consensus.
It is telling that getting a seat at the proverbial table is a sought-after goal, and a point of despair, for HR Managers. CEOs are, unfortunately, not often willing to send out an invitation. Something seems to be wrong here.
In an ideal world, the CEO will recognize that HR is a business-critical function and ensure that they have their proverbial seat at the table. To get this recognition, however, HR must become much more entrepreneurial than it is today. These are the steps to follow to get there:
- Begin with the Business Strategy and think about what do you want to achieve as an organization and how do you want to succeed in competition. This is not a conventional question for HR, but it is essential for each and every HR Manager to fully understand these points. Ask your CEO, who should be able to provide a strong argument. If not, you are asking exactly the right question in this moment. Some good reading on this topic is the book Blue Ocean Strategy.
- Discuss with your senior leadership team which Strategic Capabilities your organization needs to achieve your strategic objectives and which cannot easily be copied by your competitors. Well-known examples are Amazon’s outstanding logistics (same day delivery) or Google’s ability to intelligently use big data to place targeted individualized advertisements. Unfortunately, many HR Managers do not have a deep insight into how the business model of their own company works – but exactly this is crucial for success.
- Only now do we get to HR’s core competencies: derive, which Talent Portfolio your organization needs to build and sustain your strategic capabilities. Which jobs and roles are needed in future and who is the “right” talent for your organization?
The German engineering and electronics company Bosch is a striking example of how tremendous challenges arise from digital transformation: whilst the company hires thousands of engineers to conquer the Internet of Things (IoT) and Autonomous Driving markets, elsewhere long-standing employees of the Diesel division are in fear of losing their jobs. The answer to how to deal with the many employees of large enterprises who are not able to easily make the move to Industry 4.0 and the new way of work is still unknown, and this is a big chance for HR. HR Managers, however, have to learn to see investments in talent like a financial investor: all organizations have limited resources and have to make a conscious decision on how time and money shall be invested to gain an optimum return instead of treating all roles and employees equally. Most HR Managers feel uncomfortable with such a mindset or outright reject it, even if it is vital for the organization. An excellent paper (probably the best on the topic) is from Huselid: “A-Players for A-Positions”.
- With the foundations in place, you can derive Competencies Critical to Success (knowledge, skills, abilities and attitudes) according to the role priorities you defined in previous step. Please, do not think in terms of the still-common job descriptions with 30+ requirements listing everything and anything that comes to mind. Better use the Critical Incident Technique and ask senior business leaders what differentiates the successful incumbents from the less successful ones. Beyond a better quality of responses this has the advantage that business managers do not have to understand the HR world’s language but stay comfortably in their own ecosystem. As a result, you directly find your desired and genuine qualities instead of some artificial set divorced from reality.
- Finally, you can start the activities which HR is usually very good at. Let me label these as Talent Management:
- – Hire the right candidates
- – Help the new hires to succeed with appropriate on-boarding (even if HR should be “only” the coordinator and enabler – people managers should be held accountable)
- – Systematically develop talents with differentiated career models and career paths to multiply individual success
- – Assure sustainability through systematic but flexible succession planning
- – “Maintain” current staff by scouting talent, assessing potential and performance as well as by providing chances to learn and develop (maintain is not a nice word but here we are talking about the continuous care for the most important asset of a company)
- In parallel, HR has to ensure Leadership Enablement. HR must enable people managers by establishing common beliefs and behaviors regarding leadership principles and values. Getting the middle managers and HR to ensure a common set of values and necessary toolsets for good management and leadership is key to any successful change.
Another dimension of leadership enablement is the supply of reliable data for all people-related decisions to replace the all-too-common gut feeling – a huge area for improvement for many organizations.
- Last, but not least, HR should take care how people work together. That Communication and Collaboration are critical for business performance is nothing new, but still only a few companies actually excel in these disciplines. HR, as an interdisciplinary function with responsibility for organizational design, corporate culture and effective collaboration, is required to initiate improvement, even if it means being relentless and persistent.
As long as HR does not master the first three points, HR Managers will remain implementers but not active creators and designers. Eventually, they are at risk of executing at the wrong end which in turn leads to the poor reputation HR has in many organizations. Behind the curtain there is an implicit perception that “those folks at HR simply do not understand us.” This could be, by the way, one of the reasons why Chief HR roles in many organizations are preferentially taken by candidates from business instead of HR. But this does not have to remain this way.
Depending on the maturity level of an HR organization, the change to become more entrepreneurial can be a longer journey. Taking a route through the 7 steps, however, can lead to the top. If you make it, however, you get the satisfaction of getting your seat at the table, as well as the fulfilment of what you have been able to accomplish together with your team.
[If you made it, with the satisfying result to have got the “seat at the table” and even more important with the fulfilling look back what you have been able to accomplish together with your team.]
Kim, W., & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant / W. Chan Kim; Renée Mauborgne. Boston, Mass.: Harvard Business School Press.
Huselid, Mark A., Beatty, Richard W., & Becker, Brian E. (2005). „A players“ or „A positions“? The strategic logic of workforce management. Harvard Business Review, 83(12), 110.
The ‚Critical Incident Technique’ was first introduced by John C. Flanagan and describes a procedure for collecting direct observations of human behavior in such a way as to facilitate their potential usefulness in solving practical problems and developing broad psychological principles.