Despite all the progress that many would argue has been made since Dave Ulrich’s seminal Harvard Business Review paper on a “new mandate for HR” appeared in 1998, there’s no sign of reduction in the number of articles bemoaning the failure of the HR function to contribute to organisations. The latest in a long sequence – which appeared recently in Workforce – included useful tips on how one organisation organised a party to celebrate the HR function’s demise! I guess that’s at least a marginally more positive angle than my personal favourite critique – “Why We Hate HR”.
Before getting too depressed, it’s worth pointing out that the Workforce article goes on to paint a clear picture of the ways in which the people dimension really matters to organisational performance. It’s not hard to find other evidence to suggest that CEOs recognise this too and are impatient for HR to step up to the plate – recent examples include research reports from both the Economist Intelligence Unit and the CIPD.
It seems that the frustration is with the way that HR is perceived to operate rather than the underlying rationale for having an HR function. For example, the EIU found that 70% of CEOs wanted the head of HR to be a key player in strategic planning but only 55% felt that they were – with 21% feeling that HR weren’t involved at all. More alarmingly, while 67% of CEOs felt that the head of HR was doing a good job at leading the function, the rating was much lower for critical activities like “developing key talent” (50%), “succession planning” (42%) and “global sourcing decisions” (34%).
There is an obvious opportunity to move the debate on – so how could we do that? Based on working with organisations that have had some success in doing so, I’d like to suggest that there are three basic tests which the HR function – however we define it – needs to pass convincingly:
- Are we able to generate and communicate usable insights into the impact which people issues have organisational performance?
- Are we able to develop practical interventions to address those people issues?
- Can we execute those interventions successfully?
The specific answers to the questions clearly vary significantly from organisation to organisation –one of the reasons why simply copying initiatives which have worked elsewhere is unlikely to deliver the expected benefits. However, the basic challenges are similar – and call on capabilities which the HR function needs to have if it is able to contribute fully. Importantly, they also require the different components of the common HR organisation design – Business Partners, Centres of Expertise (CoEs) and Service Delivery – to work effectively together.
For example, the ability to generate useful insights depends on both the closeness to the business which should come from strong Business Partnering and the “how to” expertise which should come from the deep subject matter knowledge provided CoEs. Equally, executing interventions successfully depends on good design (CoEs), good change managements (HR BPs) and efficient processing (Service Delivery).
Importantly, what the three questions don’t do is prescribe a “one size fits all” solution – which organisational structure to adopt or which HR systems to implement. However, answering them does give a clearer focus and a basis on which to plan for the future.
Of course, if it was easy to pull this off, there would (probably!) be fewer articles announcing the death of the HR function. However, there are enough “bright spots” – success stories – to suggest that it’s achievable. The challenge to all of us is what are we going to do this year to ensure that we are able to pass those three tests with flying colours?