Repurposing HR: From a Cost Center to a Business Accelerator

innovate.

Chapter 1.

Why HR Needs to Become a Business Accelerator

This book is about a major paradigm shift for the HR profession. Long a cost center or overhead department, HR fights for credibility, funding, and trust. There is a better way.

HR departments have been trained to think of themselves as cost centers, challenged at every budget cycle to cut, pare, and shrink expenses. We HR professionals brandish benchmarks and statistics to say how engagement affects business success, how our ratio of HR staff to employees is low, and how our turnover is too high. Executives roll their eyes and ask, "But what impact do you have on our bottom line?

Guess what, HR professionals. We have a tremendous impact on the bottom line, but we think like a cost center. One reason is because we do not have our own act together. We think in organizational silos, as professionals in compensation, recruiting, employee relations, and learning and development, rather than as business people whose purpose is to improve the bottom line of our organizations.

By breaking down organizational silos and using a process to generate and foster collective thinking, we can shift the paradigm from developing programs, policies, and processes to improving the performance and productivity of the workforce. The profession of human resources has grown exponentially specialized and complex, and our work often confounds our customers. We walk in a minefield of compliance and regulatory traps, which seem to monopolize our limited time and resources and pull us away from being the strategic partner that we want to be.

In this frantically busy world, sometimes it is necessary to stop, reflect, and reenergize, and that is what this book is about. Here we offer a RoadMap with intentional StopOvers that help us ask and answer good business questions about the people part of the organization.

And at each StopOver, the focus is on the customer—the end user of our products and services—the leaders and employees of the organization. These are the people who will actually make improvements to performance and productivity. By shifting the focus of HR work to the customer and by operating the discipline of human resources as a business, we can be that strategic partner our organizations desperately need.

Becoming a strategic partner is a paradigm shift, and it can substantially increase the value of HR because the organization will know what to expect and will be able to measure results, not just quantitative activities, but real impacts on the bottom line. And if we do it right, we probably will not have to tell our customers how we add value; they will tell us.

This refocus can be accomplished by following the process described in the RoadMap and by looking holistically at the business of people. It can be equally effective in large or small organizations, and it can be intentionally implemented as a transformation process. Though I hesitate to use the word transformation because I believe it is widely overused, there is no other fitting word for a deliberate and systematic change in behavior that generates better business results.

The field of human resources is at a crossroads, and the time to act is now. When the name of the discipline changed in 1985 from personnel to human resources, there was a promise of being more than administrative. HR professionals wanted to be strategic, to be credible, and to add value to the organization.

Today, some HR teams are truly partners in the business, trusted and looked to for wise counsel about the investment of human capital. There are, however, an overwhelming number of HR teams that have not yet achieved the credibility or proverbial seat at the table that they believe will bring true business partnership.

Some HR teams may argue that they cannot break out of the roles that executive leaders place them into—the roles of administrative, cost centers, necessary evils. They claim that executives do not understand the role that human resources can play in leading the investment in human capital, so they are stuck. That may be a fair point, to say that executives may not see the potential in HR to be a strong business leader.

On the flip side, most executives are smart business people who know a business opportunity when they see one. The challenge before us is to educate executives on the value of HR and to show our potential by doing what they need us to do. This process introduces a structured and disciplined way to approach the work of HR that is a means of doing just that.

The purpose of this book is to set out a process, a RoadMap if you will, for senior HR leaders and their teams to shift from being a necessary evil, a cost center, an overhead department to being a true business partner that is leading the investment in human capital as a key member of leadership—a business accelerator. It can also serve as a basis for which CEOs can set the standard for HR work by raising the bar for their HR teams.

This is not an HR competency model, although we will talk about the knowledge and skills necessary to journey through the RoadMap. There are excellent competency models already available to help HR practitioners develop as leaders and professionals. This model offers a way to apply the competencies that have been developed and modeled by the Society for Human Resource Management (SHRM) and others, to actually put the competencies to work, and to guide continuous learning and development for HR teams.

This is also not an organizational chart; the RoadMap is intended to be organizational chart neutral. By this, I mean that it can be adopted by any HR team regardless of how the team is structured. As the HR teams begin thinking collectively, the RoadMap may cause them to question traditional HR roles, but that is an evolution that will happen over time.

This is also not a transformation, although it may lead to transforming the HR function to add greater value to the organization. As I said earlier, the word transformation is overused and rarely achieves what it purports to achieve. The process described in this book can be introduced on a project level, or to solve a particular problem to help achieve a result that works.

This process is a new way of thinking about the role of HR, the work of HR, and the enormous scope of responsibility that HR teams accept, requiring myriad knowledge, skills, and competencies that rarely come neatly packaged. It is a practical method for looking at the business and the human capital from the perspective of the leaders and employees who count on HR to help them do their jobs.

The RoadMap is also a way to put human resource competencies into practice. By asking questions intentionally and by doing good research, an HR practitioner can apply and develop critical competencies and skills. Whereas competency models provide the what, this process offers a how.

It is a method for breaking down organizational silos and learning to think and act collectively, where a wide net is cast to gather and analyze relevant data, and a lively dialogue among diverse perspectives provides answers that consider risks, opportunities, and consequences and that allow for informed, decisive action.

It is a way of educating the organization on all things people and building the credibility of human resources.

In this book, I will first review the exceedingly disappointing literature related to the current state of human resources. I will also build the case for change—knocking down HR silos to focus on the customer and become a value-added business partner.

With that backdrop, I will present a RoadMap for a new way to look at HR in terms of the multiple roles that HR plays on the business scene. We will walk through each StopOver on the journey, including the purpose, objectives, knowledge, and skills required; work products; and tools and resources that are useful to the practitioner. This is a process for using the skills, competencies, and attributes of the HR team in a systematic and holistic way.

As a backdrop to the RoadMap, I will provide a case study for using it for planning, execution, and evaluation of the leadership of the human capital investment.

Before we launch into the new way to think about HR, let’s consider this story about Karen, a newly hired vice president of human resources for The Western Group. Karen’s story may sound familiar and will help us set the business case for becoming a business accelerator.

Chapter 2.

A Modern HR Fable: Introducing Karen

Karen was excited about her new role as vice president of human resources for The Western Group. She knew that competition for this role was intense because The Western Group was doing breakthrough work in medical devices, and the organization had been on the Fortune’s Best Companies to Work For list for several years. During the interview process, she got a taste of why. The CEO and executive leaders seemed to understand that their people were a competitive advantage in innovation, production, and distribution, and she was looking forward to a strategic partnership with this leadership team.

This was her first top HR job, although she had led every discipline within the field of HR. During years of being part of HR leadership teams, she had reflected on what she would do differently should she have the opportunity to serve in the top HR position. She had always been frustrated about silos across HR, which gave her and her peers tremendous autonomy, but made it feel as though the members of HR were not operating together as a unit. She could see how this damaged HR’s reputation. She wanted to create a cohesive and strategic HR department, to focus on HR’s customers, and to have her HR team have a measurable impact on the bottom line. Based on her conversations with the other executives, she felt optimistic about their support for human resources.

She also knew from the interview process that there were significant opportunities to become more cohesive and to improve the reputation of the team. Her new peers had talked about busywork coming from HR and about having too much HR work to accomplish. These comments sounded familiar to her, based on her prior experience, but she also knew that it would not be wise to make changes too quickly. Instead she wanted to observe her new team members, assess their skills and knowledge, learn their current programs, and honor the good work they had in place.

She was coming in at a hectic time, as a new competitor, The Eastern Group, had just announced its entry into the marketplace with a local presence in the same city, and she could feel the tension while in the interview process about the impact that the competitor would have on The Western Group’s business and employees. Although its customer base was international, the employee pool was local and potentially at risk of being hired away. Her new boss, the CEO, pointedly charged her with successful retention of the company’s top talent.

The first week went by quickly; she participated in the new manager orientation, met key peers and HR team members, and attended her first executive leadership team meeting, where she listened to the executives discuss challenges and opportunities. They reinforced the concern about whether The Eastern Group would start poaching The Western Group’s talent, so Karen was certain that she had a captive audience.

Learning about the Organization

At the beginning of her second week, Karen asked each of her directors to prepare an update on their goals and progress for this fiscal year and to present it to the team at their first staff meeting. She did not prescribe a format for the presentation, as she wanted to see how the directors thought about their roles and their work and how effective they were at presenting. As the meeting progressed, she was pleased with the quality of the presentations and with the commitment she saw in her new leadership team. The directors gave excellent reports, and it was obvious that each of them was knowledgeable about his or her own area of expertise and passionate about doing good work (see Table 2.1).

Karen thanked her new team for such robust reports and for such a commitment to an aggressive agenda. She asked for copies of their reports so that she could become more familiar with the details and reflect on what questions she might have.

Table 2.1. Karen’s HR Team

Time to Reflect

Karen left her office that evening with a full briefcase and an even fuller head. Though the work her new team had underway was impressive, something was nagging at her. That evening as she read through the materials, she began to list observations and questions to address with her team.

She noticed that the behavioral interview questions that came with the new applicant tracking system were based on a popular competency model and that the competencies could be linked to specific jobs. Karen made notes about questions she had.

Question: How does this model align with the competencies that are on the newly revised job descriptions?

Question: How does a new hire benefit from the hiring process? How do new hires prioritize their development plans? How does the development plan align with the new performance management process?

Question: How long are the classes on behavioral interviewing and manager self-service, and how ready are managers for this role? What communication has taken place to explain the transition to manager self-service?

She reviewed the lesson plan for the regulatory training that the employee relations (ER) team had developed, with help from learning and development (L&D), and her eyes glazed over after the first 50 slides describing the Fair Labor Standards Act, the Americans with Disabilities Act, the Family and Medical Leave Act, equal employment opportunity, and Title VII of the Civil Rights Act.

Question: Where does all this information reside, and is there a better way for managers to access it when they need it (because they probably will not remember from the training)?

Question: How have ER and L&D worked together to analyze the spike in compliance issues? Does the training hit the 80/20 rule, focusing on those compliance regulations that are causing the most trouble? Perhaps there is a way to be more targeted—she would ask.

Juan had provided a list of the new jobs, along with samples of the new, more generic job descriptions. She noticed that the job descriptions did not contain the competencies on which recruiting’s behavioral interviewing questions were based. They had knowledge, skills, and abilities (KSAs), but those appeared to be similar for each job; there was not a lot of difference even in levels, or functions. The duties sections of the job descriptions were quite long.

Question: What is the purpose of the job descriptions? How useful are they to employees and managers, particularly as these jobs are so much more generic?

Question: If the KSAs are generic, how do they match the behaviors for which they are recruiting, and how do they align with the behaviors in the performance system?

She was excited to read the results of the annual employee survey that Elsie had provided, hoping that it would give her a sense of how the employees and managers felt about the organization and their work. She looked for a question that would give her a sense of how employees felt about workload but could not find a question that would provide those answers. She did notice that employees were not altogether positive about the skills and behaviors of their leaders, nor were they certain about how their roles