You Don’t Have to Like Me

I’ve written a lot about what’s wrong in HR and how to change it, particularly what’s wrong with HR leaders.  This led me to reflect on advice I received from my manager in my first job after college.  It was in the spring of 1988 and I was full of excitement!  I had been an honors graduate, ranked 1st in my major, and I was one of only a handful of classmates to actually get a real paying job in my chosen field of work.  I thought I had gotten the job because I was smart, capable, and willing to work hard, but alas, imagine my shock when my boss explained , “you were the only candidate who didn’t say, ‘I like people’ when I asked you why you wanted the job.”

I was dumbfounded… it had never occurred to me to relate “liking people” to working in HR.  In fact, I recall telling him I liked designing, coming up with ideas and figuring out how to build them (not literally with a hammer and nails, but developing processes to take ideas to reality).  I liked solving problems.  I liked working with numbers, as well as, writing.  I didn’t think about saying, “I like people,” because it didn’t seem relevant.  It was a huge company, so I would have to work with many people all over the country, as well as, a few in other countries.  Working with people was a requirement, not an option.  This notion of “liking people” didn’t seem to matter.

???????????????????????????????????????????????????????????????????????????????????????????What this rather simple revelation reinforced for me is that being in an HR role isn’t about being a “people person”.  It’s about accounting for and provisioning for a company’s human capital.  More specifically, it’s about optimizing a company’s investment in human capital and mitigating associated risks.  Interestingly, when I accepted that role, which happened to be an analyst supporting compensation and HR information systems, the function was actually part of that company’s finance group and was certainly more supported by finance than by HR.  We were integrated into the HR group later that year.  However, we still worked very closely with our colleagues in finance.  Frankly, the leaders of the finance function recognized the value we contributed to the business more than our colleagues in HR.  That financial perspective has traveled with me throughout my career and has occasionally put me at odds with my HR brethren.  For 27 years, the invaluable insight that HR is not supposed to simply be about liking people or enjoying working with people has guided many aspects of my career choices and leadership decisions.

Recently, I’ve reconnected with my former boss from all those years ago, Tom Barnett, currently at a consumer packaged goods manufacturer in Atlanta, GA.  We reminisced about old times and shared how our thoughts have evolved over the past (almost) three decades.

Me:  What advice would you give young professionals and managers in HR today?

Tom:  HR still isn’t about “liking people”, so that part is the same, but HR needs to redefine or refine its purpose.  The functions that are part of HR vary a good bit from company to company.  There’s no standard set of expectations for HR because there’s no agreement on how HR should be defined.

Me: Very true.  For example, sometimes safety is in HR, sometimes in operations; payroll could be in HR or finance or outsourced; workforce planning (for the few companies that really do it) might be in HR or in strategy; sales compensation design might be in HR or in sales operations and the same with sales comp administration (i.e. commission operations); contingent labor might be in HR or in supply chain or finance or outsourced.  Despite the availability of “ideal” or “suggested” HR organizational design benchmarks available from almost any HR consulting firm, there is still a great deal of debate regarding how HR should be structured.  I wrote about this in my last blog installment, Profile of the New Chief HR Officer (http://www.sophicpartners.com/insights/uncategorized/profile-of-the-new-chief-hr-officer/).

Tom:  Young HR people might not realize they have possible career paths outside of HR. They should latch onto a function, an operational business unit or a sales group and learn the entire business from that point of view.  HR people must find ways to actively contribute to that business unit’s goals.  You should build a reputation for yourself that is separate and distinct from the general reputation of the HR organization.  Ideally, you should take roles in and out of the HR organization.  Don’t let HR be your end goal.  Also, let people from the business serve in HR roles as part of their career development.  This rotation will give them better insight for people decisions when they go back to a line job.

Me:  How has your advice changed in the past 25 to 30 years?

Tom:  I see the value of cynicism now.  You should never be afraid to question or try to discover people’s motives.  A lot of bad decisions are made that have negative long-term impact because HR hasn’t been bold enough or simply didn’t understand enough about the business to ask the right questions.  I’ve seen HR take the easy way out too many times, rendering the function essentially useless to the business.  Sometime it is necessary to challenge your colleagues in other functional areas.  If you’re too busy trying to make everyone happy (i.e., liking everyone or trying to make them like you), you will make no one happy and you will also lose any chance of earning respect.

Me:   I agree:  I wrote about this problem of being a “people pleaser” in “The Chain is Only as Strong as the Weakest Link” (http://www.sophicpartners.com/insights/uncategorized/the-chain-is-only-as-strong-as-the-weakest-link/).  What do you hope to see in the HR profession in the next decade?

Tom:  I want to see more involvement from HR leaders in making decisions.  We’ve come so far with automating transactional processes and with creating service centers (in-house or outsourced).  We’ve created so many more efficient ways to handle the bulk of this necessary, but undesirable work.  Companies need to take full advantage of this technology.  However, I’ve seen too many struggles through the years using technology and outsourcing as a weapon just to get rid of HR.  I call this practice “tools as weapons and weapons as tools”.  I want to see the business stop viewing HR as evil, a hall monitor, traffic cop, or babysitter.

Me:  Yes, we have to stop this outdated way of thinking about HR and realize that while we should strive to be as efficient as possible in every part of the business, there are some critical ways that HR can and should add value that are not embedded in a technology application or easy to outsource.  ?????????????????????????????????????????????????????????????????????????????????????????????????

Indeed, HR is uniquely positioned to change how organizations make strategic decisions.  Jeff Higgins, CEO of Human Capital Management Institute, sums it up with, “Perhaps the best argument for HR to adopt and use human capital metrics is that it puts numbers to people so that CFOs and the rest of the organization can finally begin to drive superior decisions about people and talent by using facts and numbers woven into the story that HR is uniquely qualified to tell.” (“Bringing HR and Finance Together with Analytics,” Jeff Higgins, Human Capital Management Institute, HR Magazine, November 2014, p. 44 – 46; http://www.shrm.org/publications/hrmagazine/editorialcontent/2014/1114/pages/1114-hr-finance-analytics.aspx )

I was lucky to be hired and mentored by someone who had this unique long-term insight for HR back in the late 1980s.  I carried this early learning with me throughout my career and it never steered me wrong.  Despite how we’ve evolved, Tom and I are both still practicing our craft and remain steadfast ambassadors for our shared mission of ensuring that HR is not just about “liking people”.

 About us: Sophic HR

The Sophic HR Insights blog was started as a channel for Sophic Partners, LLC to contribute to the on-going and ever-changing dialog about the evolution of the HR function. Our belief is that business strategy and people strategy are inextricably intertwined and we strive to cultivate this understanding in today’s business leaders through alignment of the HR function to facilitate acquisition, development, engagement, performance, rewards, and retention of critical talent. We also strive to impart wisdom in tomorrow’s leaders through education in these areas.

About Tom Barnett:

Tom began his career in academia with Virginia Tech and the University of Georgia.  He sees compensation as the pivotal function in HR for driving businesses. His career has been with a Fortune 50 company at the Corporate and Division levels, as well as, a manufacturing facility. He has always been drawn into the Corporate setting overseeing multiple aspects of HR.

Profile of the New Chief HR Officer

My last installment, “From Friction to Flow with New HR Leadership”, paralleled J. Craig Mundy’s thoughts about “Why HR Still Isn’t a Strategic Partner” (“Why HR Still Isn’t a Strategic Partner”, Harvard Business Review, HBR Blog Network, July 5, 2012, J. Craig Mundy, http://blogs.hbr.org/2012/07/why-hr-still-isnt-a-strategic-partner/).  Today’s thoughts continue that trend, comparing and contrasting  with some ideas presented by Ram Charan in “It’s Time to Split HR”, (“It’s Time to Split HR”, Harvard Business Review, July – August 2014, Ram Charan, http://hbr.org/2014/07/its-time-to-split-hr).

Charan suggests splitting HR, which I’ve often pondered as well.  However, the trick is which functions to split.  The idea of splitting HR sounds reasonable, but carrying out this concept might create more problems than it solves. The real objective is to get the more strategic aspects of HR closer to the business, regardless of whether HR is split apart or remains under a single leader. As with any functional area, there are pros and cons to any organizational structure which vary by company.

?????????????????????????????????????????????????????????????????????????????????????????????????No matter what type of HR structure a company implements, Chief Human Resource Officers (CHROs) should be able to “link people and numbers to diagnose weaknesses and strengths in the organization, find the right fit between employees and jobs, and advise on the talent implications of the company’s strategy.  However, many of them “have great difficulty analyzing why people- or whole parts of the organization- aren’t meeting the business’s performance goals.” (“It’s Time to Split HR”, Harvard Business Review, July – August 2014, Ram Charan, http://hbr.org/2014/07/its-time-to-split-hr).  These activities are at the core of workforce analytics, one of the fastest growing areas in HR, but one in which few CHROs have any expertise.  Even in companies that have a workforce analytics function, the CHRO might not have the wherewithal to fully leverage it. He or she might also be inadvertently suppressing the contributions of this area due to a lack of analytical acumen and/or confidence to present the output from this function to the C-suite, let alone the board.

I agree with Charan that CHROs are having great difficulty.  I’ve worked with both strategic and tactical, process-oriented CHROs for over 25 years and have personally experienced the dramatic difference in their respective leadership approaches, as well as, their ability to impact the business.  “The realization that talent shortfalls can constrain growth, impede successful mergers, or derail a strategy has boards paying closer attention to talent topics than ever before.  Today more than ever, knowledge and the people who can leverage it are core competitive differentiators.  Having talent is not enough.  Successful companies identify, attract, develop, and retain the right talent effectively and consistently. CEOs had better ensure that their CHROs are board-capable and will represent the CEO and the company as a whole.”  (“Talent On the Agenda – As More Talent Concerns Rise to the Board Level, CEOs and CHROs Must be Prepared to Deliver Strategic Thinking on HR”, Nels Olson and Kim Shanahan, Korn/Ferry Institute, http://www.kornferryinstitute.com/reports-insights/talent-agenda-more-talent-concerns-rise-board-level-ceos-and-chros-must-be-prepared?mkt_tok=3RkMMJWWfF9wsRogua%2FOZKXonjHpfsX76ekuXqa3lMI%2F0ER3fOvrPUfGjI4HRcRrI%2BSLDwEYGJlv6SgFSLTGMbdw07gNXxM%3D)

Based on this need to be an influencer not only in the C-suite, but also at the board level, it’s important to carefully select the HR functions that best position a CHRO to be the strategic advisor that is so sorely needed. Charan’s point is that it is time to try a new type of HR leader and a new HR organizational structure to better serve the ultimate needs of the board, C-suite, and business at large.  However, in his brief overview, he provides examples of functions that could be considered process-oriented, rather than strategic.  We need to be careful of oversimplifying and labeling functional areas without a deeper dive.  For example, Charan uses the compensation function as an illustration of a process-oriented function. While there are certainly some aspects of compensation that are process-oriented or transactional in nature, those activities should ideally be handled by an HR Service Center skilled at execution.  This narrow categorization does not adequately describe what a modern compensation function contributes to the organization.

When I think of the compensation function, I think much more holistically about aligning plan design with business objectives, strategic role segmentation, organizational and job design, and analysis, which are highly specialized, consultative business services.  This type of compensation function (generally organized as a Center of Expertise, COE) should never be confused with processing payroll (which is an extremely important function, but not strategic).

Indeed, “recognizing the competitive advantage a secure pipeline of engaged, diverse, and ready-to-lead talent provides, many corporate boards are extending their reach deep into human resources issues – leadership development, compensation, and succession planning reaching several levels below the chief executive officer. Some boards including Procter & Gamble, Amazon.com, Yahoo!, and Dow Chemical – have changed the name of the compensation committee to the “compensation and leadership development committee” to reflect this broader charter.” (“Talent On the Agenda – As More Talent Concerns Rise to the Board Level, CEOs and CHROs Must be Prepared to Deliver Strategic Thinking on HR”, Nels Olson and Kim Shanahan, Korn/Ferry Institute, http://www.kornferryinstitute.com/reports-insights/talent-agenda-more-talent-concerns-rise-board-level-ceos-and-chros-must-be-prepared?mkt_tok=3RkMMJWWfF9wsRogua%2FOZKXonjHpfsX76ekuXqa3lMI%2F0ER3fOvrPUfGjI4HRcRrI%2BSLDwEYGJlv6SgFSLTGMbdw07gNXxM%3D)  Finally, board-level recognition of the comprehensive and integrated contributions of the compensation function! ?????????????????????????????????????????????????????????????

Progressive boards and CEOs are only just beginning to realize their own contributions to the challenges with HR leaders.  Board members who accumulated most of their work experience during an era in which HR was primarily an employee relations and compliance function have an outdated perspective.  The escalating pressure on today’s boards is fueling their expectations of the HR function. The CHRO needs to be prepared to have conversations with the C-suite and the board regarding how talent management plans, including all aspects of compensation, are structured to incent the right behaviors, as well as, discuss their associated attraction, development, retention, and cost implications.

If the CHRO does not have ample direct experience in these areas, ideally he or she should involve the top subject matter experts (SMEs) on his or her own team to learn from them, including them in discussions with the CEO, and leveraging their talent in preparation for board presentations, which is also a valuable growth opportunity for these team members who could be future candidates for the CHRO role themselves.  If the CHRO does not effective leverage the HR team, he or she will fail.  The wrong CHRO can also be a significant risk for a CEO. Both the incumbent and the entire HR infrastructure can either create friction or flow (see “From Friction to Flow with New HR Leadership”, www.sophicpartners.com/insights and “Why HR Still Isn’t a Strategic Partner”, Harvard Business Review, HBR Blog Network, July 5, 2012, J. Craig Mundy, http://blogs.hbr.org/2012/07/why-hr-still-isnt-a-strategic-partner/)

As for HR structure, Charan suggests that the administrative functions report to the Chief Financial Officer (CFO); however, I think if the company is considering splitting HR and if it has a Chief Administrative Officer (CAO) or even a Chief Customer Experience Officer, those functional areas might be better suited due to the similarities of focus required.  After all, most CEO’s expect their CFOs to be strategic partners, so why tie them down with more administration work?

Another way of organizing is to have a Senior HR Operations Officer reporting to the CHRO.  This is akin to a COO reporting to a CEO, or a Chief Accounting Officer (CAO) reporting to a CFO.  This arrangement has the advantage of keeping all services related to human capital in one overall reporting structure.  However, it will only work if you have the right person in the CHRO role.  I contend that this person should have an analytical background, rather than an administrative one.  While I agree with Charan that this set of experiences and capabilities can be difficult to find in an HR leader, it is certainly not impossible.

While there are great leaders in other parts of the business that can be pulled into HR, I advise against it.  The CHRO needs to have direct HR experience rather than try to learn it on the fly.  Modern HR is a broad and complex discipline, not something you learn overnight.  Occasionally an extraordinary leader can make the transition, but I’ve seen this approach fail.  In some cases, the transplanted leader was perceived as being “dumped” into HR because he or she failed in another role.  In other situations, the transplanted leader did not have a deep appreciation for the HR function due to inadequate functional knowledge and failed to leverage the talent and experience of the broader HR team.

So what should a CEO look for in a CHRO?

In addition to technical competence, CHROs should have analytical acumen and be “highly articulate, politically astute, and courageous.” (Jacqueline Kane, CHRO and Senior Vice President of Human Resources and Corporate Affairs for The Clorox Company and a director of Comerica Inc.; “Talent On the Agenda – As More Talent Concerns Rise to the Board Level, CEOs and CHROs Must be Prepared to Deliver Strategic Thinking on HR”, Nels Olson and Kim Shanahan, Korn/Ferry Institute, http://www.kornferryinstitute.com/reports-insights/talent-agenda-more-talent-concerns-rise-board-level-ceos-and-chros-must-be-prepared?mkt_tok=3RkMMJWWfF9wsRogua%2FOZKXonjHpfsX76ekuXqa3lMI%2F0ER3fOvrPUfGjI4HRcRrI%2BSLDwEYGJlv6SgFSLTGMbdw07gNXxM%3D)  I also linked courage and confidence as success factors in “From Friction to Flow with New HR Leadership” (www.sophicpartners.com/insights)???????????????????????????????????????????????????????????????????????????????????????????

Another recent article features “people agility” and “change agility” as critical competencies for CHROs.  “People agility or understanding and interacting with people, keeping an open mind, and being comfortable dealing with diversity and differences of opinion” is a key CHRO competency we would naturally expect.  However, “change agility, a key component of “learning agility”, defined as the ability to cope effectively with the discomfort of rapid change, lies at the heart of how HR leaders demonstrate their business acumen: it is by conceptualizing and driving enterprise-wide change that HR earns a seat at the leadership table.  It also falls to HR leaders to coach and challenge other senior executives to create change.”  (“Three Steps Ahead – Change Agility Emerges as Defining Capability for Chief Human Resources Officers”, George Atkinson and Kim Shanahan, Korn/Ferry institute, http://www.kornferryinstitute.com/reports-insights/three-steps-ahead-change-agility-emerges-defining-capability-chief-human-resources?mkt_tok=3RkMMJWWfF9wsRogua%2FOZKXonjHpfsX76ekuXqa3lMI%2F0ER3fOvrPUfGjI4HRcRrI%2BSLDwEYGJlv6SgFSLTGMbdw07gNXxM%3D)

CEOs should strongly consider CHRO candidates who have tours of duty at both the business unit and corporate levels in several companies, and preferably in several industries, as well as, consulting in specialized HR areas of expertise such as compensation design, executive compensation, strategic role segmentation, organizational design, workforce analytics, workforce planning, HR technology, mergers and acquisitions, and change management for the type of analytical acumen, as well as change agility needed in a CHRO.  In recent times, I’ve witnessed a trend toward placing candidates who were HR Generalists or HR Business Partners in the top HR role, but with very mixed performance results.  CEOs should take a leap of faith on a specialist from one or more of the above areas who could bring a new perspective to the CHRO role and the HR organization, recalibrating and supercharging the HR generalist/partner roles over time with these more strategic and analytical skill sets, while not losing sight of the critical need for people agility so often found in incumbents in employee relations/HR generalist/HR business partner roles.  Perhaps this approach would mitigate the temptation to split HR. As I continue to explore this and other related topics, I welcome your thoughts.

About us: Sophic HR

The Sophic HR Insights blog was started as a channel for Sophic Partners, LLC to contribute to the on-going and ever-changing dialog about the evolution of the HR function. Our belief is that business strategy and people strategy are inextricably intertwined and we strive to cultivate this understanding in today’s business leaders through alignment of the HR function to facilitate acquisition, development, engagement, performance, rewards, and retention of critical talent. We also strive to impart wisdom in tomorrow’s leaders through education in these areas.

From Friction to Flow with New HR Leadership

My last installment, “Crossing the Flexible Affiliation Bridge”, focused on the importance of flexible work options, particularly for critical talent.  Strong HR leaders should be able to recognize this need and enlighten other functional leaders of the importance of affiliation strategies.  Unfortunately, I have witnessed quite a number of examples of HR leaders doing just the opposite.  There may be a variety of reasons, but I suspect that whether the issue is flexibility, performance management, development, or some other human capital consideration, HR is often more focused on managing the perception of fairness to all employees and ensuring administrative processes are followed than on contributing where it really counts.

????????????????????????????????????????????????????????????????????????????????????????????????????“Why HR Still Isn’t a Strategic Partner“, J. Craig Mundy suggests, “of every action you take as an HR leader, ask this simple question:  does it cause friction in the business or does it create flow?”  (http://blogs.hbr.org/2012/07/why-hr-still-isnt-a-strategic-partner/) He defines friction as “anything that makes it more difficult for people in critical roles to win with the customer” and flow as “doing everything possible to remove barriers and promote better performance.”  HR leaders must have ability to prioritize on what will make a difference (rather than spreading resources equally to everyone) and enhance the flow of the business.  This concept gets back to the “differentiated workforce” I described in my third Sophic HR Insights installment, “Fortifying the HR Value Chain”.  (www.sophicpartners.com/insights)

Why is this concept so difficult for many top HR leaders to execute?

  • While the problem certainly exists in other functional areas, it may be exacerbated in HR because HR leaders might be appointed to their posts without any direct HR knowledge or experience more often than leaders of other functions.  “Just because a company appoints someone to a position, doesn’t mean it allows them to lead.” (People Actuation blog at www.discoveryou.me “Leading or Managing…You Decide”)
  • “Managers only focus on what needs to be done here and now, and they get yanked and pulled around by whatever is the next thing.  Remember, just because something is urgent, does not mean it is important in a bigger picture.” (Sounds like a lot of HR leaders to me…) “Managers, while incredibly busy, often find themselves feeling helpless to achieve short-term or long-term goals, because they only think about the next task.” (If the leader does this, you can bet they drive their team crazy, creating so much emphasis on tactical work that the team can’t focus on the critical work…. A guaranteed way of alienating critical talent in the HR function!) “True leaders are focused on the big picture and care little about the little things because they know what actions really make a difference.” (People Actuation blog at www.discoveryou.me “Leading or Managing…You Decide”)
  • “Managers follow ‘the book’… to do something different requires permission, so they create bureaucracy. True leaders recognize some structure is needed… but drive creativity and innovation.” (People Actuation, blog at www.discoveryou.me “Leading or Managing…You Decide”)
  • ????????????????????????????????????????????????????????????????????????????????????????????A lot of women are in top HR jobs.  A recent research project, The Confidence Code (http://www.amazon.com/The-Confidence-Code-Science-Self-Assurance-What/dp/006223062X?&tag=rnwap-20) proved there is a confidence gap between men and women.  This work cites “a lack of self-assurance impacts our ability to try new and different things.” (Zach Estes, psychology professor)  In psychological tests, women more frequently skipped questions in fear they would get them wrong, rather than try them in hope they would get them right.  This mentality is found far too frequently in HR.  We need to take a risk, even if we’re wrong.  We can collaborate with others more when we don’t know.  Real leaders realize they don’t know all the answers.  Their self-confidence is not diminished by not knowing.  Instead, they are confident enough to reach out to knowledgeable colleagues.  In this way, they tap into the best of everyone and hear their voices. (People Actuation blog at www.discoveryou.me “Leading or Managing…You Decide”)
  • Women in HR should value their own skills in “listening, mentoring, and building conscientiousness.”  These “soft skills are hot skills” and have proven to be highly profitable in many studies. (Confidence Code, (http://www.amazon.com/The-Confidence-Code-Science-Self-Assurance-What/dp/006223062X?&tag=rnwap-20)

Let’s face it… HR can only be a powerful force if the top HR person is willing to “rock the boat”.  Every other function makes waves in a company.  It’s okay for HR to make some too.  HR needs a new regime of true leaders who can end the friction and make the waves flow.

As I continue to explore this and other related topics, I welcome your thoughts.

About us: Sophic HR

The Sophic HR Insights blog was started as a channel for Sophic Partners, LLC to contribute to the on-going and ever-changing dialog about the evolution of the HR function. Our belief is that business strategy and people strategy are inextricably intertwined and we strive to cultivate this understanding in today’s business leaders through alignment of the HR function to facilitate acquisition, development, engagement, performance, rewards, and retention of critical talent. We also strive to impart wisdom in tomorrow’s leaders through education in these areas.

Crossing the Flexible Affiliation Bridge

My last installment, “Fortifying the HR Value Chain,” highlighted four bridges connecting business strategy and HR.  One of these bridges, affiliation strategy, is the focus of today’s thoughts.  HR should never underestimate the criticality of affiliation with incumbents in strategic roles and those employees who have been identified as critical talent.  One popular and unfortunately, often polarizing affiliation strategy is flexible work, with emphasis on virtual work.

If as an HR leader, or more importantly, a people leader at any level, if you don’t know how to keep employees, particularly your best and brightest people, engaged without also keeping them under your thumb, you are headed for trouble!  You’re probably already in trouble.  Your critical talent, whether they are seasoned or senior level or both, have earned the right to be respected and trusted.  They want to be recognized not only for their outstanding contributions, but also for something much more basic… being a responsible adult!  They want a relationship of equals and will become increasingly resentful and intolerant of anything less.

Many employees are looking for choices of work hours and/or locations and will turn down or separate from jobs that don’t offer this level of personalization.  For example, older workers may want longer vacations than their younger colleagues.  Some employees need more flexibility in their work week, etc. Some people work more effectively in a non-office location not subject to constant interruption.   “Even when companies offer such initiatives today; however, employees often perceive that these options may hinder their careers and their standing within the company.” (“Creating People Advantage:  How to Address the HR Challenges Worldwide Through 2015”, Boston Consulting Group, April, 2008)  ???????????????????????????????????????????????????????????????????????????????????????????

If your company’s strategic / critical talent perceives that your work-life initiatives are not genuine or that they will be informally labeled as “less than fully committed”, they will find a way to leave. Their separation might surprise you and occur when you least expect it.  Many of these critical employees were designated because of elite or niche skills and experiences, their leadership abilities, or their capability to “land on their feet”.  You’re not the only game in town and these employees know they can find another job or create their own livelihood.  They will function with full engagement and high performance while they are still with you due to their strong personal integrity, but they will not stay indefinitely in an environment in which they believe their work ethic is being subjected to subtle, but very real scrutiny based on their manager’s insecurity.  “High potentials put in 20% more effort than other employees in the same roles.  Their contributions may be even larger in constrained organizations, where stars tend to be carrying a disproportionate share of the workload because of recent downsizing efforts or restructuring.  When organizations cut back and ask employees to “tough it out”, the starts will be the first to say, “No thanks.  I’d rather find an employer who appreciates the high level of contributions I’m making.” (“How to Keep Your Top Talent”, Harvard Business Review, Jean Martin and Conrad Schmidt, May 2010) 

The goodwill related to flexible work generated by among employees and in the community may be difficult to quantitatively capture, but it’s very real and powerful.  It may be your strongest affiliation strategy tool.  Your employees, particularly your critical players, are also leaders and influencers in the community (i.e., your talent pool, your customer base, your industry, etc.) and people listen to them.  Don’t you want your company to be positively represented when your employees volunteer at school, church, and charitable events, without fear of reprimand or at the very least, free of constant interruption from the office?  There are many more examples, but now is a great opportunity to cultivate a mindset among people leaders in your company that demonstrates respect for an employee’s time and priorities inside and outside the office.

As I continue to explore this and other related topics, I welcome your thoughts.

About us: Sophic HR

The Sophic HR blog was started as a channel for Sophic Partners, LLC to contribute to the on-going and ever-changing dialog about the evolution of the HR function. Our belief is that business strategy and people strategy are inextricably intertwined and we strive to cultivate this understanding in today’s business leaders through alignment of the HR function to facilitate acquisition, development, engagement, performance, rewards, and retention of critical talent. We also strive to impart wisdom in tomorrow’s leaders through education in these areas.

Fortifying the HR Value Chain

My previous installment, “The Chain is Only as Strong as the Weakest Link” continued the theme that the HR value chain is broken and the senior HR leader might be sabotaging HR through poor time and resource management and misaligned priorities.  “Instead of spending an equal amount of time, attention, and resources on all employees equally, HR leaders would be more effective corporate stewards by disproportionately investing in the most critical roles and people.” (http://blogs.hbr.org/cs/2012/07/why_hr_still_isn’t_a_strategic_partner.html by J. Craig Mundy).   A great deal of research and insight on the concept of “the differentiated workforce” has been done by Richard Beatty, Mark Huselid, and Brian Becker in their book, The Differentiated Workforce (also see http://www.thedifferentiatedworkforce.com).

The foundation of a differentiated workforce is role segmentation which classifies jobs (not incumbents) into four distinct categories:

?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????-          Strategic Roles: new markets, products, services, geography; high-risk, transformational work; these roles have the power and influence to “change the game”; roles that create customer and economic value; “top talent” enhances the probability of success; usually less than 15% of a company’s roles fall into this category

–          Core Roles: industry-specific; need these roles to meet the operating plan and/or customer commitments (includes, but is not limited to, many revenue-generating roles)

–          Foundation Roles: roles needed to run the business, but not industry-specific (many corporate staff roles fall into this category)

–          Transitional Roles: exiting services/products/markets/geographies; areas the company is not focusing on for growth

Critical talent can be designated in the first three categories: Strategic, Core, and Foundation Roles.  Critical talent describes incumbents in the roles.  This process is similar to customer segmentation models used in sales and marketing or investment segmentation (a.k.a. investment balancing) models used in finance.

By segmenting roles, HR can develop a more focused workforce plan aligned with the company’s overall strategy.  “Few companies systematically analyze the future supply of and demand for employees under different growth scenarios and on a job-by-job basis.” (The Boston Consulting Group, “Creating People Advantage: How to Address HR Challenges Worldwide Through 2015”, World Federation of Personnel Management Associations, 2008).  Boston Consulting Group outlines four “bridges” that connect business strategy and HR:

–          Sourcing Strategy:  Recruiting, hiring, internal staffing, HR branding, and diversity should be targeted based on a workforce plan of future demand by the company and future supply of employees in the labor market

–          Performance Strategy:  Individual performance management, HR metrics, and incentives should be aligned with business strategy and specific business objectives (I will focus more on this strategy bridge in future installments of Sophic HR)

–          Development Strategy:  Development of people and leaders aligned with business strategy

–          Affiliation Strategy:  Tracking, analyzing trends, and developing forecasts for compensation growth, wealth-building, work-life alignment, engagement, motivation, and social responsibility in order to fortify relationships with employees (I will focus more on this strategy bridge in future installments of Sophic HR)

The bottom line is that people drive strategy and HR should build these bridges for incumbents in strategic roles first and all critical talent incumbents in core and foundation roles next.

HR must be able to measure progress and contributions in each of these four bridges to help the senior leadership team, as well as, all managers understand the impact of their people decisions  just as well as they understand financial impact.  As I continue to explore this and other related topics, I welcome your thoughts.

About us: Sophic HR

The Sophic HR blog was started as a channel for Sophic Partners, LLC to contribute to the on-going and ever-changing dialog about the evolution of the HR function. Our belief is that business strategy and people strategy are inextricably intertwined and we strive to cultivate this understanding in today’s business leaders through alignment of the HR function to facilitate acquisition, development, engagement, performance, rewards, and retention of critical talent. We also strive to impart wisdom in tomorrow’s leaders through education in these areas.

The Chain is Only as Strong as the Weakest Link

My first installment, “Is the Link in Your HR Value Chain Broken?” highlighted a few challenges that impede HR and business alignment starting with the top HR leader. This installment continues to explore what happens if the top HR leader is not appropriately suited to the rapidly expanding role he or she is expected to fulfill. If this is the situation in your company, it’s unrealistic to expect the rest of the HR organization to overcome a deficiency in top talent leadership. In other words, the chain cannot be stronger than the weakest link and sometimes the weakest link is at the top of the chain.

Despite their best intentions, top HR leaders may demonstrate unproductive habits. One particularly destructive, and unfortunately, common habit of HR leaders is trying to please the rest of the senior leadership team, or C-suite. Rather than firmly establishing priorities, the top HR leader reacts to every impulse from the other leaders. The driver for this behavior is typically a strong sense of internal customer service. The Chief HR Officer wants the other executives to feel they’ve been heard. The CHRO also wants to score points for being responsive. While these are not bad objectives unto themselves, they should be balanced in the greater context of the company’s priorities. HR leaders who are eager to please others can easily be distracted from their strategic purpose.

I was inspired to think about this challenge in HR by a recent article by Greg McKeown, “The No. 1 Time Management Mistake Capable People Make”, which outlines the ever-growing dilemma of executive-level distraction. This unproductive mode of operation can permeate the entire HR organization starting with the CHRO’s direct report team. If the HR leader allows constant interruption (i.e., answering phone calls, emails, and text messages from other senior team members) during the HR staff meetings, it sends the message to the direct report team that their work is not a priority. It also sends the message to the rest of the C-suite that HR is at their beck and call. This approach can trickle down into the rest of the organization if the HR leader’s direct reports follow suit.

?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????Inability to focus hurts not only the operational flow of the HR organization, but also severely limits HR’s strategic impact. By trying to address everything that can possibly arise in the HR realm, the HR organization misses the chance to add value in the ways that matter most to the company. You’ve probably heard of the “Pareto Principle”, based on Vilfredo Pareto’s observation that 80% of the land in Italy in the 1790’s was owned by 20% of the people. Joseph Juron called it “the law of the vital few” in The Quality Control Handbook. Greg McKeown also quotes Nathan Myhrvoid, the former CTO of Microsoft, who indicated that “the top software developers are more productive than average software developers by factor of 10,000x”.

To that end, we must ask why some top HR leaders spend their energy dealing with HR considerations for the masses, rather than coaching the senior leadership team on issues relating to incumbents in strategic roles (i.e., those key roles that can actually contribute in a tangible way to competitive differentiation, often referred to as “mission critical”) which are usually only 10% to 15% of the roles in a company (Human Capital Institute; Ulrich, Smallwood, Sweetman 2008). Strategic role segmentation enables a company to prioritize and direct appropriate resources toward talent acquisition, leadership development, rewards, and succession plans for top talent in strategic roles first. Workforce analytics produces metrics and data trends enabling informed decision-making for continued investment in these roles.

Two-thirds of US employers have no planning for their talent needs (Peter Cappelli, Wharton School, 2012) which supports my premise that many top HR leaders are missing the opportunity to be the strong link in the HR value chain. As I continue to explore this topic, I welcome your thoughts.

About us: Sophic HR

The Sophic HR blog was started as a channel for Sophic Partners, LLC to contribute to the on-going and ever-changing dialog about the evolution of the HR function. Our belief is that business strategy and people strategy are inextricably intertwined and we strive to cultivate this understanding in today’s business leaders through alignment of the HR function to facilitate acquisition, development, engagement, performance, rewards, and retention of critical talent. We also strive to impart wisdom in tomorrow’s leaders through education in these areas.

Is the Link in Your HR Value Chain Broken?

I fundamentally believe that you cannot be successful in the marketplace without first being successful in the workplace. There are significant volumes and compelling bodies of research on this very statement (James Heskitt, Laurie Bassi, Gallup, IBM, FedEx, HBR, and many others). There is an undeniable Human Capital Value Chain linking engagement of employees to a positive customer experience to increased profits and shareholder value. If your business in not optimizing this value chain, you may be suffering from a poorly designed HR organization. In today’s world, between 65% and 85% of a company’s total value may be comprised by intangibles such as brand, relationships (customers, vendors, partners), innovation, talent management, and leadership (Human Capital Institute). Are you willing to entrust the talent portion of your company’s value to a functional area that is poorly designed, inefficient, and fragmented?

As someone who has participated in this profession for over 25 years, I am encouraged that many companies are finally getting serious about HR organization design, but still struggle to achieve alignment. While there are many contributing challenges to achieving HR and business alignment, I have witnessed three specific problems during my own career so far that are worth noting.

The first is the top HR officer might have a successful track record in traditional employee relations and HR operations, but is not sufficiently experienced in modern workforce planning, talent analytics, and HR technology to lead the HR organization to connect the Human Capital Value Chain.

The second contributing factor that I’ve witnessed are the silos created by the various functional areas within HR (i.e., talent acquisition, talent management, workforce planning & analytics, rewards, employee relations, etc.). If these subject matter areas are structured in a manner that facilitates separation of purpose and operational execution, and/or creates a disproportionate investment in some areas versus others, your company will experience competition for resources within HR instead of fully realizing the talent piece of the value chain.

The third contributing factor is declining levels of engagement of the HR team. Disengagement can be more difficult to detect in HR since employee opinion surveys and pulse surveys are typically sponsored by and administered by HR or an HR vendor. HR team members can be reluctant to admit concerns for fear of making HR look bad. However, there are other indicators such as voluntary turnover of key HR leadership positions and HR professionals with critical skills. If the top HR officer fails to capture engagement of the HR team, it is simply unreasonable to expect the HR team to facilitate programs harnessing intrinsic motivation (high engagement) across the company.

As I continue to explore this topic, I welcome your stories of best and worst practices in HR organization structure.

About us: Sophic HR

The Sophic HR blog was started as a channel for Sophic Partners, LLC to contribute to the on-going and ever-changing dialog about the evolution of the HR function. Our belief is that business strategy and people strategy are inextricably intertwined and we strive to cultivate this understanding in today’s business leaders through alignment of the HR function to facilitate acquisition, development, engagement, performance, rewards, and retention of critical talent. We also strive to impart wisdom in tomorrow’s leaders through education in these areas.