What good HR can do for a business

Captured from DailyFT (13th May 2011)
- By Mr. Dinesh Weerakkody
Good people are very crucial for any business. So finding them, managing them, motivating them and holding them are key responsibilities of HR.
However, in many companies we know of, HR gets it wrong – either operating as a cloak-and-dagger society or a health-and-happiness sideshow.
These are extremes, of course, but if there is anything we have learned over the past three years in our consulting practice, it is that that’s an outrage, made only more so by the fact that most HR leaders aren’t scrambling to fix it for reasons best known to the HR heads.
In our view, HR should be every single company’s engine of growth. What could possibly be more important in a company than who gets hired, developed, promoted, or moved out of the door? After all, business is in a game to make profit and, as with all games, the team that puts the best people on the field and gets them playing together as a team wins and makes adequate money to breed more success, give salary increases to their players and to become famous.

It’s not that simple anyway to get the best out of your human resources. You would never know that though, until you get the right man on board as your HR head.
Why the CFO reigns supreme

However, even though many CEOs believe that people power is the real engine of any business, in many companies the CFO reigns supreme and as a result HR is relegated to the background. It just doesn’t make sense.
If you owned the Indian cricket team, for instance, would you hang around with the team captain or the Treasurer of the Board? Sure, the treasurer can tell you how much money the board has, but the captain knows what it takes to win, how good each player is and where to find strong recruits to fill talent gaps. That’s what HR should be all about. And as we see when we move around, it’s usually not.
That was never as painfully clear to us as it was few years ago when we spoke to some HR professionals about their role.
At one point, we asked the audience: “How many of you work at companies where the CEO gives HR a seat at the table equal to that of the CFO or the Marketing head?” After an awkward silence, fewer than five people raised their hands. Awful!
Since then, we’ve tried to understand why HR has become so marginalised and often treated as the poor cousin in the management team, and as noted above, there are at least two poles of bad behaviour. The cloak-and-dagger role:
That occurs when HR managers become stealthy little kingmakers, making and breaking careers, sometimes not even at the CEO’s behest.
These HR departments can indeed be powerful but often in a detrimental way, prompting the best people to leave just to get away from the palace intrigue of it all, then after a while become a drag on the business and finally get marginalised.
Just as often, though, you get the other extreme: HR departments that plan picnics, put out the in-house newsletter and generally drive everyone crazy by enforcing rules and regulations that appear to have no purpose other than to increase bureaucracy. They derive the little power they have by being the ‘you can’t do that,’ which we call the audit or police role.
Get HR to do its real job
So to get it right, it all starts with the kind of people boards appoint to run their HR – not kingmakers or cops but real HR professionals, people with real stature and credibility.
In fact, they need to fill HR with a special kind of hybrid: people who are one part a priest, hearing all sins and complaints without recrimination, and other part the parent role, loving and nurturing but giving it to you straight when you are off-track.
Priest-parent types can rise through HR, but more often than not, they have run something during their careers, such as a factory or a function.
They get a good feel of the business – its inner workings, history and tensions, the hidden hierarchies in people’s minds.
They are known to be relentlessly candid, even when the message is hard, and hold the confidence at any cost. Indeed, with their insight and integrity, the priest-parent earns the trust of the organisation. But priest-parent types don’t just sit around making people feel warm and happy.
They make the company better, first and foremost by overseeing a rigorous performance management system that lets every person in the organisation know where he or she stands, and monitoring that system with the same intensity of Sarbanes-Oxley compliance.
CEOs should also make sure that HR fulfils two other roles: That they create effective mechanisms to reward and recognise the right people in the business and prepare the organisation to face their most charged relationships, such as those with unions, individuals who are no longer delivering results, or stars who are becoming problematic, for instance, becoming arrogant, greedy, instead of growing.
Now, given our experience with HR, the kind of high-impact HR activity we talked about probably sounds like a pipedream to a CEO.
But given the fact that most CEOs loudly proclaim that people are their ‘biggest asset,’ CEOs need to put their money where their mouth is and get HR do its real job: elevating people management to the same level of professionalism and integrity as financial management.
Since people in our view are the whole game, what could be more important in a business than to put money behind the people who run your business and create that competitive advantage that other companies cannot copy in a hurry.
(The writer is CEO, HR Cornucopia.)

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