Systemic Success: Why HR Really, Really Matters

Everyone loves to beat up on HR.

Me, too. It stops them from dumping on consultants.

But I think I've figured out the HR thing.

HR: Pediatrician, Cheerleader, Undertaker. . .

HR folks may be the only ones in an organization who knew you before you got the job; participated in getting you into the job; helped orient you to your job; participated in your development for the next job; listens to what you hate about your job; talks to your boss about what you hate about your boss and how (s)he manages your job; and maybe even escorts you out of your job--and the building. (What the heck, Elvis became famous for leaving the building).

Why does this matter?

We've been talking "systemic" thinking. When something touches every nook and cranny of a system, it has a huge impact. Constantly.

I've sat in meetings and watched millions of dollars get approved for Supply Chain systems and consultants.

I've also watched arguments about eking out a few extra bucks for "HR Stuff."

The HR Chain is to People as the Supply Chain is to Process

This was a quick take on a day-in-the-life of an HR pro.

I'm sure the HR pros online will want to add their own elements to complete the spider web of organization connections.

What's missing from the diagram is an over-arching theme: Organization Development. The execs that I work with expect HR pros to be equally schooled in OD.

What does all of this mean for HR people?

If you look at the range of services expected, then look at the breadth and depth of talents and skills required to deliver them well. Honestly, there aren't many individuals who are both talented and enthusiastic about all of those. I'm not sure it's realistic to expect it.  Most organizations run lean when it comes to HR support, yet the expectation remains.

Note: The EQ requirements for most of the functions are high. (Don't confuse high EQ with an ongoing group hug). If you really aren't into growth and development at the core of your being, you're not going to grow the people around you.

I'd put discernment, mature judgment, and systemic thinking at the top of the "must have" list.

If you like HR and have an eye for systems and details, by all means jump into one of the administrative roles if you can.

What does all of this mean for organizations?

Read the above.

Then ask yourself:

1. Are we clear about what we really want when we go out to hire an HR person?

2. Do we understand the breadth and depth of talents and maturity required?

    a. Are we willing to pay for that level of expertise?

    b. Do we know how to accurately assess that kind of candidate?

3. Are we looking at the HR Chain with the same level of resource commitment as our Supply Chain?

Thought for today: If your annual report says "People are our most important asset," be sure to double-check the financial pages.

Why?

"For where your treasure is, there your heart will be also." Matthew 6:21

Comments

[Jo]

It is easier to see HR as part of OD than the other way around.

We do HR to give us the organization we need to prosper together . . . something like that.

Not all the organization we need, needs HR! Conversely, is there any part of HR that does not serve the purpose of building relationships? I can't think of one off the top of my head.

[Mario Vellandi]

Steve,

HR faces the same contribution misconception that supply chain management faced prior to 1985: An organizational department that had little influence on the bottom line.

In the following years, companies began to learn how operations & SCM could contribute to organizational performance through: Increased cash flow (faster order processing), lower operational expenses, and lower cash held in inventories (less stock and work-in-process inventory at any one time).

The problem with HR is that its primary responsibilities are regarded as: Personnel Acquisition & Maintenance. Development though, is considered the domain of individual departmental and divisional managers. Executives are just visionary inspirational figureheads with direct influence on only relatively few people (largely because of their interactional scope and schedule). So managers get trained with interpersonal and leadership skills in workshops and MBA programs, so they can then develop their staff.

This isn't necessarily bad - it's just the way it is. So with this perspective, the new promotional goal of HR is to dramatically position itself as the arbiter of organizational and systemic design strategy. This is quite difficult though, because perhaps the company's HR dept. doesn't have this kind of talent that's beyond mere Acquisition & Maintenance. Additionally, such ideas and concepts are oftentimes created by executives and department managers who have better visibility and understanding of the vagaries of their field, thus being in a position to make qualified recommendations.

So, what next? Talented HR staff, supported by top management, to lead systemic and organizational design responsible for contributing to the bottom line, by partnering with executives and departmental managers. Is this the clear path forward?

What do you think?

[Steve Roesler]

Jo,

Yes, you are dead on with OD as the umbrella. What I failed to mention explicitly is that I'm now hearing OD as an add-on rather than the systemic, big picture entity that it was designed to be. That was not always the case.

[Steve Roesler]

Well, Mario, your take is as clear as it gets.

Actually, I believe that managers are --or should be--directly responsible for talent development. In most organizations with which I come into contact, HR is relied upon to provide advisory support, at minimum.

However, there isn't as much managerial involvement in many places as there could be. So, the task often defaults to HR.

What's next?

I don't really know for sure, but this is what I am seeing:

HR is being called upon to do more and more outside the traditional "personnel" role. When hiring, organizations aren't always paying attention to the depth of talent and maturity needed to effectively execute the role. And, they aren't acknowledging--through professional stature and treatment--the people who do carry it out well.

That said, it's probably a leap to think that any profit-making company is going to give a staff vs. operations role a lot of respect. It may simply be an occupational hazard that HR folks have to learn to live with (and do) to some degree.

BTW Mario: the comparison with SCM in the 80s really caught my attention--good one!

[Chris Young]

Hi Steve - you post brings up some interesting points. Your observations on millions of dollars being shelled out to supply chain consultants while quibbling over a few extra dollars for HR were spot on and really hit home.

I think this represents a fundamental challenge that those in HR face on a daily basis - the ability to quantitatively show the impact of HR on a business.

Operational issues are easy to quantify... go lean on the supply chain, reduce the average volume of materials in inventory by X amount at $Y overhead charge per year and it can be justified to shell out big bucks to consult with a supply chain expert.

The frank truth is that it is hard to show the strategic value of HR at times.

Not sure if this is the result of HR being unable articulate their value in the "language" of business ($$$) or a failure by top management to see what people such as you and I take for obvious.

[Jo]

Well I have only worked with American firms abroad - they had pretty sophisticated HR. The OD could be sophisticated too but it was true, looking back, that the OD leadership was dependent on the individuals in post. Don't know what conditions are like on the ground!

Where are we headed with this Steve? What is a good outcome?

[Jim Stroup]

Hello Steve,

I really think that the sort of debate you have replicated here is an early sign of better days ahead. We never used, really, to have the debate at all - just, as you indicate in your intro, the misguidedly therapeutic habit of beating up on HR when things went wrong.

But we never really even used to do much of that. We are now because we are misidentifying symptoms of systemic dysfunctions that are becoming more salient in a world of increasing flexibility and competition for talent.

It seems to me that the sort of debate you point to here is relatively new in important respects. HR used to simply hire, fire, do some training, and keep the firm out of legal trouble. Now we have a terrific debate about its strategic import and role in organizational success - even survival!

While it will continue to be painful and confusing, it appears to reflect a slowly dawning awareness that we need to take a more systemic - in the sense you are using the term - and mature approach to comprehending our organizations and their environments.

[Steve Roesler]

You know, Chris, that is the frank truth.

When it comes to T&D, coaching, succession planning, you can come up with a formula (some have) based on a set of criteria, albeit subjective by the nature of that being measured. But the cost and effort of measuring these things is a whole lot more than the activities themselves.

I've thought about all of the companies that I've been invited into--and tossed out of--over the past 30 years. The reason for both was always the same: The person at the helm either inherently believed that developing people was an investment or an expense.

What's ironic is that, in a world (business) that prides itself on "making objective decisions," those having to do with the people themselves spring from the values of the leaders. If we think that growth and development is 'obviously' a good thing, then others are saying that they still don't agree that it is better than crunching the numbers.

This conversation could really grow. . .

[Steve Roesler]

Jo,

Not sure where this is headed...but I'm curious to find out!

[Steve Roesler]

Thanks for framing it in that way, Jim. I hadn't looked at it as the beginning of a debate that hadn't occurred in this way before. But that makes sense.

A lot of what we do--at home as well as at work--isn't scrutinized until times are tough. Then we start to get real about more accurately and objectively looking at our situation. Challenging times + the numerous roles that have ended up under the HR umbrella may be the intersection needed to sort out the discipline and in what form it can be most effective in the future.

[Jo]

High P to the end? :)

I'll make suggestions @ posts +2.

(It may be important to write a 200 word summary of pp but . . ah . .it is exciting?)

[Robyn]

Steve, I want to compliment you on the "quick take on a day-in-the-life of an HR pro" graphic that shows what you mean in very few words. What a great addition to your article!

[Steve Roesler]

Robyn, the encouragement is greatly appreciated.