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12:25 PM Monday June 30, 2008
A recent piece in the Wall Street Journal -- "HR Departments Get New Star Power at Some Firms" -- noted that some forward-thinking companies are dramatically increasing the weight, importance, and strategic role of their HR departments. One way in which they are doing this is by putting business leaders, or non-HR professionals in the role of running the groups. It's a refreshing development, and one that is long overdue. It's also an area in which I believe many companies simply overlook a powerful potential source of competitive advantage.
What's the HR/competitive advantage link? Well, think about it.
As environments become increasingly dynamic, is innovation more or less important? More, obviously. At least adaptation is essential, innovation even better. But we know that the most potent sources of innovation are often ideas that emerge from within the company - usually in connection with an insight that someone has in working with customers. So a strategically minded HR department can craft jobs, create networks among people, and provide the training that helps every person in the organization become part of its innovation engine.
As environments become increasingly dynamic, is it more or less important that your senior leaders are flexible, externally focused and well prepared? Well, obviously, more important.
But who is overseeing the long-run development of these key people? Who makes sure that over the course of a career they are exposed to the right experiences, get the right development opportunities through formal and informal executive education and mentoring, and are considered for the next job when it comes up? Often, these critical tasks aren't actually done by anybody, or they are left to the vagaries of individual managers to handle the careers of the people reporting to them. A strategic HR focus, in contrast, really does look at the careers of highly talented people in a holistic way, and sees that depth, adaptiveness and engagement are being built into the way careers unfold.
HR people always complain that they aren't viewed as strategic partners. But perhaps that argument is coming from the wrong angle. Perhaps rather than viewing themselves as HR professionals first, they should get some experience as business people first. For the company leaders running HR departments, it might be time to re-think the seriousness with which you take its role.
So what about your companies? What do you wish the HR folks would do to help develop your own careers? Do you think the HR group in your organization "gets it" with respect to building the right people to deliver on your company's strategy? If you could whisper a word of advice to your CEO about his or her HR department, what would it be?
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Columbia Business School professor Rita McGrath studies innovation, corporate venturing, and entrepreneurship. She is well known for developing practical tools and frameworks to make the innovation process less risky and difficult, and to bring a dose of reality to growth programs. She works extensively with leadership teams in Global 1,000 companies. McGrath has co-authored six Harvard Business Review articles and two books: The Entrepreneurial Mindset (2000), MarketBusters: 40 Strategic Moves that Drive Exceptional Business Growth (2005), and Discovery Driven Growth (2009).
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Comments
It has been a long standing debate whether HR people or non-HR People(of course non-HR means coming from other areas of the business) should oversee the HR functions.
There are few things which need to be addressed further
1- Non-HR people may oversee the HR functions but to what extent?
2- Is it a fad or a trend?
3- Has it been tested and materialized thorugh enough scientific researches or studies?
4- Is it global in its implications?
5- One important function is succession-planning and what to do about the Succession-planning issues itself in HR department.
If the key is to run HR functions through non-HR people, then who will be the next one to head the HR department and from which department and on what grounds?
It's a real interesting question folks!
- Posted by shahzad hanif
July 1, 2008 6:05 AM
This post supports current thinking in integrated marketing communications (IMC) not only as a driver for innovations, but a well-trained, mentored employee group at all levels directly impacts the quality of customer service, because, put simply, employees interact with customers either directly or indirectly. By alerting all employees to stay attuned to the "voice of the customer", you have more input to drive innovation.
That said, I don't think that this is an issue of whether the person's background is business administration or HR, I think whoever is owning HR needs to assimulate these values into their professional life - BUT - senior management also needs to give them a seat at the table and put internal communications on their agenda. HR or or this business person needs support from middle and senior management in order to be successful, otherwise the most inspired professional will not be able to do much more than maintain status quo.
- Posted by Beth Ryan
July 1, 2008 9:49 AM
Great commentary, and great point.
I think though that this is just the tip of the iceberg. The advantage of an HR lead that is strategic in nature reaches far beyond the development of individuals. He/she can impact the vision, tactics, marketing, etc., of a company.
Ultimately the success of any company interested in growth is dependent on the proper care and cultivation of the right team.
Great food for thought though. Thanks.
- Posted by Jordan Wollman
July 2, 2008 6:18 PM
I think that leaders from other functions/parts of the organization can bring new perspectives (especially internal and external customer perspectives) to the HR function in the company. They can also leverage the credibility, visibility and relationships that they have built in the organization to help the HR function better integrated, aligned and respected. To make this work, these leaders should stay in the HR role for a reasonably long period of time (e.g. at least a couple of years) and they should be genuinely interested in handling the role.
Giving the leadership of the HR function/part of the HR function to a fast-track business manager with little interest in HR - mainly as a short-term development experience for the manager (a 'toy to play with' for a little while) - before he/she can move onto bigger things can prove to be disastrous - especially for the HR function and the HR professionals in the organization.
While I agree that there is no rocket science involved in HR, I have seen that many of the decisions that an HR leader has to make often involves fine judgment - judgment which requires a good amount of HR functional knowledge and a deep understanding of the people context in the organization- in addition to business understanding and logical thinking. Usually, this requires a significant investment of time and effort. Otherwise, ‘a simplistic understanding of the domain coupled with natural bias for action’, can lead to a lot of avoidable confusion and destruction!
- Posted by Prasad Kurian
July 7, 2008 7:15 AM
It would be interesting validate this commnet by comparing the role and influence of the HR function in a sample of firms with sustained high relative P/E ratio with a sample of low performers. Google versus GM comes to mind.
- Posted by ian c macmillan
July 7, 2008 9:24 AM
Should HR be run by HR...well of course it should. You wouldn't have an accounting person running the advertising or a finance guy as the CIO, so why would you put someone from outside HR in charge of HR? What has to happen is that C-Level management must see HR as a way to create a strategic advantage, in that the company who has the best (and keeps the best) talent wins. HR training, classes, metrics, etc. have been elevated in recent years as the roles of HR were becoming more and more complex. Jack Welch understood HR to have a huge impact on the business and worked hard with the department when he redeveloped GE's employee training and development and review.
To me even if you put an operations or business development person in charge of HR, if you haven't changed the internal view of HR from loss center to profit center then it doesn't matter who is running it.
- Posted by Jesse
July 8, 2008 6:51 PM
In my experience with large corporate entities, HR is viewed as a cost of doing business;a support function whose business "value" is most often dictated by legal requirements surrounding managing employees.
Unless an organization moves beyond finance-directed business decisions to being consistently customer-centered with metrics and infrastructure that support such a culture, HR will be simply one more cost-center. HR professionals can help make such change happen, even lead it, and thereby demonstrate business relevance.
Just a thought.
- Posted by Bob Shea
August 14, 2008 12:30 PM
Only few companies have done comprehensive researches. Recently I came across this site - ecompetitors.com, which apparently has quality information on many industries. It has got information on the top 10,000 industries. They have created an online model of the global economy which enables quick analysis of one industry or a group of industries.
- Posted by hendrix00
June 6, 2009 5:30 AM