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It’s Time to Split HR

Prof. Ram Charan
Harvard Business Review July – August, 2014

CEOs expectations from CHROs:
1. Skills in linking people and numbers to diagnose
weaknesses and strengths in the organization,
2. Find the right fit between employees and jobs, and advise
on the talent implications of the company’s strategy.

What is wrong with CHROs:
1. Most of them are process-oriented generalists

Expertise in personnel benefits, compensation, and labor relations.

3. Focused on internal matters such as engagement,
empowerment, and managing cultural issues

. 5. They don’t know how key decisions are made. They have great difficulty analyzing why people—or whole parts of the organization—aren’t meeting the business’s performance goals.4. What they can’t do very well is relate HR to real-world business needs. 6.

who left HUL to join Aditya Birla Group in 1996. Bill Conaty. working on organization and restructuring and developing P&L managers. She is overhauling the HR pipeline to bring in other people with business experience. Santrupt Misra. had several managerial roles outside HR. the CHRO of Marsh.Examples of Strategic CHROs: CHRO of GE. Conaty weighed in on key promotions and succession planning. working hand in glove with Welch in a sweeping overhaul of the company. . was a plant manager. Mary Anne Elliott. Kumar Mangalam Birla. became a close partner of the chairman. He runs a $2 billion business as well as heading HR at the $45 billion conglomerate.

The other. . would focus on improving the people capabilities of the business and would report to the CEO. HR-LO (for leadership and organization). not just a major cost. HR-LO would be led by high potentials from operations or finance whose business expertise and people skills give them a strong chance of attaining the top two layers of the organization.My proposal is to eliminate the position of CHRO and split HR into two strands. One—we might call it HR-A (for administration)—would primarily manage compensation and benefits. who would have to see compensation as a talent magnet. Report to the CFO.

 Capability: identifying the organization capabilities that enable organizations to win over time. These capabilities include service. culture change. commitment and contribution of employees throughout the organization. learning.Dave Ulrich: Top HR leaders focus on –  Talent: delivering competence.  Leadership: ensuring leaders at all levels. information . efficiency. change. . innovation. strategic focus. collaboration. risk.

. Innovating HR practices (people. Redesigning the organization (department structure). Vast middle 60% gets discouraged when respected colleagues belittle them and their efforts. Upgrading the competencies for HR professionals Focusing HR analytics on decisions more than data.Holistic approach to helping the middle 60%. The top 20% : don’t always share their lessons in ways that teach others. leadership. and work). Redefining the strategy (outside-in) and outcomes (talent. and capability) for HR. performance. information. It is not easy to move a profession forward. The bottom 20% get too much attention.


 Failing to build a well-recognized internal HR brand  Failing to prove impact  Failing to anticipate and forecast  Failing to build a competitive advantage .Reasons:  Failing to state CEO as a career goal.

 Dwelling on equal treatment instead of differentiating and focusing on performance  Failing to take the lead with technology  Failing to think and act globally  Failing to demonstrate responsiveness and effectiveness within HR  Failing to build a performance culture .

HR Value Creation  HR must understand the external world in which it operates.  Technology  Economic and Regulatory issues  Effects of Globalization  Workforce demographics .

 Recognizing your stakeholders  Employees  Line Managers  Customers  Investors .

 HR Practices that make this happen The way you hire. . and pay people and the way you organize work sends messages to employees about what matters most. train.

 Treat the HR function as a business  Do you have a strategy and a structure that will deliver value?  The strategy will help you focus attention on key factors and respond appropriately to business realities.  The structure will organise HR resources in ways that govern how HR work is done. .

 Ability to build relationships and trust . Whether HR professionals have the right skills ?  Clear roles and distinct competencies  Ability to instill changes quickly and link the results to customer outcomes.

Source: Mckinsey 2013 .

K.Course Outline Course Title : Business Strategy Total credit hours : 15 Course Teacher Course Objectives : D. . empirical and policy orientation of the study of Strategic Management . The focus is on interface of HRM with Business Strategy in the context of emerging global business scenario. Srivastava : The main aim of this course is to develop a shared understanding among the students about conceptual.

The course aims at covering the following topics:  Understanding criticality of Business Strategy  Strategic Management – Changing Role in Global scenario  Strategies in Action – Models and types of strategies  Context and Challenges of Strategic HRM  Aligning HRM strategy and Business strategy  Diversity for strategic competitive advantage contd… .

 Basic concepts. principles. .At the end of the course. functions and models of strategic management  Application of Business Strategy models in developing strategic business advantage. students should have an understanding of:  Broad overview of business strategy and its criticality in emerging business scenario.

(2001). Linda. and Susan E. 6. London. Palgrave Macmillan: New York 2. Blackwell. (1999). Strategy and Human Resource Management. Fred R. 4. Aligning Human Resources and Business Strategy. (1985).) (1999).Weightage (40%) End Term Exam . Porter. Derek and Laura Hall (1999) Human Resource Management.Weightage (60%) Reference Books: 1. David. . Oxford. Strategic Human Management. Holbeche. Randall S. Peter & John Purcell (2003). 3. Michael E. Schuler. Torrington. Boxall. Competitive Advantage. Jackson (eds. The Free Press. 5. Prentice Hall. Elsevier Publishing Company.Evaluation Scheme: Group Project . Strategic Management : Concepts and Cases. Prentice Hall.