The HR Doctor series takes a tongue-in-cheek look at some of the common misconceptions, misdiagnoses and diseases that commonly afflict the HR function. They reflect our experience of working in and with HR over the last 25 years. Over the next ten weeks we’d urge you to honestly diagnose yourself: are you showing any of the symptoms? Should you be applying the cure?
HR is probably the only function that talks about ‘the business’ as if it’s something separate. Indeed, the concept of an HR business partner doesn’t help as we are part of the business not a partner. HR needs to be connected to the business but we observe many people in HR are disconnected from the business. They take an HR-centric view of the world rather than focusing on the business.
- Uninterested in the business, especially the numbers and the commercial realities.
- Never meet end customers, so don’t understand what the business is about.
- Physically separated from the business, sitting in an HR bunker with their colleagues so they don’t know what’s going on in the business and no-one sees HR, knows what it does or trusts it.
- Provides solutions to problems that no-one knows they have, driving an HR agenda (often picked up from consultants or at conferences) that does not deal with the real business issues.
- Speaking a jargon filled HR language (my favourite is ‘coterminous stakeholder engagement’ which I believe means ‘talking to people’) that no one understands and creates a barrier of confusion and misunderstanding.
- Everyone in HR is busy doing lots of HR stuff that fails to make a difference to the business. They are busy, busy, busy rather than focused on value creation.
- This results in HR lacking credibility and being seen as disconnected. HR is side-lined when important decisions are made and relegated to doing ‘HR stuff’ – contracts, disciplinaries, T&Cs etc.
- In the HR Manifesto, we talk about the purpose of HR: not to do HR stuff but to create the capability of an organisation to deliver its strategy and create sustainable value for all its stakeholders.
- The issue isn’t just about HR being disconnected from the business but the business being disconnected from the people and organisational issues that underpin the strategy.
- If HR is not involved in the strategy process the danger is key people and organisational issues are not taken into account and come back to haunt the business.
When we were running an HR development programme, we were helping people understand how to value a business so they could use this to understand what HR should focus on to create value. One of the participants told me this was ‘irrelevant to her role as an HR professional as she didn’t do calculations’. This is what being disconnected from the business means.
Compare this to the response from a participant on another programme who said, ‘I took a value based approach to three recent conversations and it changed the whole dynamic’. When I explored this, she had been asked to implement three unplanned headcount requisitions. In the past, she would have executed them, but based on her understanding of the operational free cash challenge the business faced she asked how the headcount contributed to meeting this challenge. In all three cases the business leader removed the requests. This is what being connected to the business means.
- HR professionals should think of themselves as business people first and HR people second. Loyalty should be to shareholders, or in the case of public sector organisations, a wider group of stakeholders, and not to HR.
- Be fascinated not only by business, but by your business, reading about the industry and key macro-economic and demographic trends, bringing the outside in.
- Spend more time on the numbers; the language of business is the language of finance. HR needs to speak this language. HR needs to understand how value is created in the business and know the answers to some key questions:
- How does your business make money and what are its key challenges?
- In one sentence what is your business strategy?
- Who are your main competitors, how will you beat them?
- Who are your key customers and how will you win / retain them?
- What are the key financial statements, what are they for and what do they tell you?
- Where can the business save money?
- What is your PE ratio, how does it compare to your competitors and what drives it?
- How can you and HR support these issues?
- If you can’t answer them then work with your finance buddies to understand them.
- HR needs to use this not to ‘justify what we do’, as one HRD said, but to define and prioritise what we do.
These posts are based on a series of articles originally written for Personnel Today in 2010. Whilst we have updated them, the underlying themes remain as true today as back then. Please add your comments below.Back to top