In "People before strategy: a new role for the CHRO", Ram Charan, Dominic Barton, and Dennis Carey

draw comparisons between the journey of the finance function and the changes they believe the HR
function needs to make. The three activities they believe are critical to redefining the role of the Chief
Human Resources Officer (CHRO) are:

Predicting outcomes – assessing the chances of meeting the business goals using knowledge of the
people side of the business;

Diagnosing problems – pinpointing precisely why an organisation might not be performing well or
meeting its goals; and

Prescribing actions to add value-recommending actions in order to be more flexible with human capital,
in order to unlock or create value to the business.

In my review of these, and other articles over the years it seems much of the criticism of HR comes
down to the following:

HR seems to focus on transactional activity and being preoccupied with administrative efficiency rather
than value add.

HR makes businesses do stuff people don't really like, or don't think that they need to do.

HR doesn't seem to fulfil its role as an employee advocate, or is too often seen to be acting, sometimes
inappropriately, in the interests of the organisation.

HR focuses on activity that seems unconnected with what the business really needs, and HR
professionals lack commercial acumen.

I wonder if the business world really hates HR, or is it, and HR professionals, simply unclear on what the
function is required to do?

Do we need to blow up HR and start again, or should we review how we define, organise and resource
the work HR needs to do?

Comparisons with the Finance Function

Over my career I have often been guided by comparisons between HR and the Finance function, as
posited by Charan, Barton, and Carey, and also by Ram Charan in the HBR of July – August 2014 (It's time
to split HR). I think these comparisons offer a valuable way to look at how we define, organise, and
resource the work of the HR function.

Transactional Activity- Finance, like HR,has its share of transactional activity that is required of the
function. No one suggests Finance do away with activities like accounts payable or accounts receivable,
so it seems to me that this sort of work should not be jettisoned, but rather organised and managed as
part of the function, in order to achieve the required service standards.
Governance- the Finance function is expected to manage, monitor and report on financial activity, via
formal delegation of authorities, audits and other processes, to ensure compliance with professional
accounting standards, company law and other legal and risk mitigation requirements. So it is that the HR
function must ensure compliance with an ever growing range of workplace related regulatory, reporting
and governance requirements. The role of governance is neither one of employee advocate or doing
employer bidding, but one of upholding legal, moral and professional expectations.

Process Ownership- the Finance function is responsible for ownership of a range of critical processes to
manage the financial performance of the business- budgeting, monthly reporting, financial risk
assessments etc. So it is that the HR function needs to manage and deliver key people management
process, such as performance and remuneration reviews, workforce, talent and succession planning.

Specialist Expertise- just as the Finance function is required to provide specialist advice, in areas such as
taxation or funds management/treasury, HR is called upon to provide specialist expertise in areas such
as recruitment, organisational development, industrial relations and compensation benefits.

Business Advisory- business analysts in the Finance function are expected to combine their accounting
and financial expertise with commercial understanding of the business, in order to provide analysis and
recommendations on better managing business financial performance. So it is that HR, through
generalists or business partners, needs to provide advice and counsel on the critical people related
issues the business needs to address to meet its performance objectives.

From reviewing, and dealing with comments about the value of HR I believe that much can be addressed
by tackling three things:

Be clear on the role and structure of HR- ensure that there is a clear understanding among all
stakeholders on the role HR will play; there are agreed expectations on the output that is expected; and
clarity on the appropriate roles and organisational structure needed to deliver on that accountability.

Define the capability needs of the function and resource appropriately- be robust in defining the
capability needed to deliver on the agreed expectations. In cases where there is a need for stronger
commercial acumen and other skills, these requirements are then built into the recruitment, selection
and ongoing development of HR professionals.

Measure, report and improve output accordingly- ensure that the agreed roles, outputs and capabilities
form the basis for measuring and improving performance, for both the function and HR professionals.

As an HR professional it frustrates me to see that the function continues to draw the sort of criticism it
does, and disappointing to see that it appears little progress is being made in how the function is
viewed, at least in the eyes of some commentators.

I'd like to think that articles like those in Fast Company and the Harvard Business Review are a call to
arms, not only for those of us is in the HR profession, but for a business world that should understand
how critical the people 'stuff' is for a successful business. I'd also like to think that just as in other
specialist functions, having well qualified and developed professionals, delivering on well defined and
understood roles and objectives, is a way to ensuring the success of the function and the organisation it
supports.
I'm keen to know what others think about the criticisms of HR and what we need to do to ensure it's not
still making headlines in ten years' time.