At a recent HR event I was sitting passing the time with another delegate. As we sipped our coffees, we exchanged views. This person's take on the business surprised me, but didn’t shock me. HR, the delegate thought, was ‘off to the side’, a controlling function, one with no real or direct influence on what went on around the boardroom table.
It’s a ‘traditional’ view of what we do, but it’s still shocking to find it so prevalent. After all, Dave Ulrich’s model of HR as a ‘business partner’, one embedded into the very core of any organisation, is an excellent model and one we surely should be seeing in action all the time. That views like those held by my coffee partner are still prevalent among HR professionals is a sad indictment. But why does it still run so deep?
One factor, I believe – and I may be swimming against the tide here – is that HR has over emphasised on process to the detriment of outcome. Process is, of course, important, but I’d suggest we need a little rebalancing here and align more closely with the business as a whole on measureable, impactful outcomes.
Adding value is a fundamental requirement of all business functions. But it’s traditionally seen as being the focus of cost centres, such as the front line or IT, or revenue centres. In these areas the fundamental focus is on measures and outcomes and the language used in these areas in any business is all around financial figures – figures which by their very nature are embedded deep within the DNA of any business leadership. And you’ll never be part of that leadership if you’re not talking ‘their language’. So what steps does HR need to take to start talking?
Firstly, there is a fundamental need for HR to improve the way it translates the people strategy of the business into hard financial facts and figures. The need is to rebalance the more traditional HR narrative, losing some of our more complex and inward looking jargon, and increasing the financial content. That content also needs to be couched in terms which are far closer to common business parlance.
Secondly, to really engage those key stakeholders, the financial figures need to be elevated above mere costs. We need to be talking about – and addressing – issues of revenue. The imperative is the alignment of growth and productivity. That’s where leaders focus their attentions. So HR needs to provide measurable outcomes in terms of productivity, revenue improvement, alongside measures to avoid undue costs and the risks associated with those costs. By developing these capabilities, HR can finally start to own a major contribution to compliance and risk at a strategic level.
Developing, and demonstrating, a thorough understanding of the business context – in terms of winning new business, understanding and managing customer sentiment, and the wider issues of the ever changing landscape and the challenges the business faces as a result – are all key. Becoming an active contributor to problem resolution in these areas through the context of people is an agenda some are adopting, but many, many more need to follow. If we can take these steps, then we will elevate HR to its true strategic level.
The modern HR professional needs to be both outwardly focused and relevant, and those should be key organisational capabilities where HR should be both custodian and leader. Creating the right balance of innovation and stability – and seeking out the right levels of positive disruption – will ultimately maintain an organisation’s health, longevity, profitability and growth. All of these should not just be the familiar territory of HR but owned by HR.
If we can achieve that outcome, and I believe we can, then maybe I’ll be having an altogether more positive and forward looking conversation over coffee when I attend my next HR event.
Iain Moffat, pictured, is enterprise director at MHR, which is sponsoring HR magazine's Ulrich Insights video series and has produced a free downloadable whitepaper to accompany the series
