Sunday, August 10, 2014

HR - Change is coming

"It’s time to say good-bye to the Department of Human Resources. Well, not the useful tasks it performs. But the department per se must go."  Ram Charan, HBR July 2014

Every now and then you might read an article that gives you genuine food for thought. This happened to me last month when I read the one page HBR article, titled 'It's Time to Split HR' by Ram Charan. To be honest though I think I may be in the minority when I viewed the various defensive and HR apologists comments on the online article.

With the apologists in mind, I am most likely being optimistic in suggesting that my proposal, that I will call 'Building On Charan's Idea 2.0', is also given due consideration.

Charan's proposal is to eliminate the Chief Human Resources Officers and split the HR function into two, namely:
  1. HR-A (for Administration): "would primary manage compensation and benefit. It would report to the CFO"
  2. HR-LO (for leadership and Organisation): "would focus on improving  the people capability of the business and would report to the CEO"
The driver behind Charan's proposal is that CEO's disappointment in the HR function are borne out of the fact that the department it is staffed by employees who have not worked on the front line and do not understand the operational complexities of managing a business unit, division, business or company.

I agree with this!

And because I agree with this I am proposing a potentially more radical solution - merge the HR-LO into the line management and not have it as a separate reporting line. The Chief Marketing Officer should take the responsibilities of the HR-LO for Marketing. Likewise the National Sales Manager should take the responsibilities of the HR-LO. Don't pull line managers out of their operational role, bring the HR Leadership and Organisation into their role. The role of the HR-A will be an administrative support function. It does not get a seat at the table. However the capability is critical in making sure those line managers with the HR-LO responsibilities have the available tools to execute the role efficiently. This proposal is a high level outline and no doubt the naysayers will be vocal.

A number of organisations have tried this in parts however I have yet to see it successfully implemented. Issues I see around the reason for failure are that CEO's are often reluctant to let go of their CHRO due to the fact that:
  1. The CHRO is often seen as a "trusted adviser".
  2. The thought of making line managers responsible for the LO function is politically unsavory due to the backlash many may see as a burden on their already strained workload.
My view is simple. You either accept the status quo as positive for your business or you make fundamental change. It is simply not acceptable to keep lamenting on the inadequacy of an entire organisational function yet at the same time not adopt a model for change. CEO's, Managers and Bloggers alike need to stop bashing HR. The department is an easy target. It's time those that do bash HR stand up and take on the HR-LO responsibilities and bring the front line operational thinking and capability to the most important part of any organisation, people.