The Great HR Paradox: A thought bullet for CEOs everywhere

December 1, 2004 Keith Coats Articles, Leadership, Strategy, Talent, Teams No Comments

Never before has ‘HR’ (Human Resources) been so redundant within the corporation; yet paradoxically, never before has it been more needed.

(And by ‘HR’ I am referring not to the Industrial Relations aspect of the HR function but rather to the people development side of the coin.)

Let me explain.

Traditionally the HR function has been compartmentalised within the corporate structure creating a silo effect. This has been consistent with the mindset and business model that saw fit to compartmentalise the entire business including marketing, sales, finance etc: in the understanding that the business was best seen as a machine made up of various components. It made analysis and measurement possible and in an economy where it was all about efficiency made sense to dichotomise in this manner. Or so it seemed. If a basic definition of management is, ‘getting work done through others’ then in this context the emphasis underscored the ‘work’ rather than the ‘others’. In fact the ‘others’ were at times viewed by management as a frustration to be tolerated in ensuring that the work gets done. The prevailing attitude was one that any failure to perform meant that, as with a malfunctioning cog in a machine, you will simply be replace and it will be ‘business as normal’.

However the world in which we live and work changed. A mechanistic view of the universe and workplace is as outdated as is the belief that the world is flat. This worldview, along with its accompanying methodologies is simply no longer effective or relevant in a quantum, connected, networked world that is made ever smaller through technological advancement. The true corporate alchemists of today are those familiar with frameworks and practices that centre on people and people development. The attraction, retention and leadership of talent (or those we like to term, “Bright Young Things’) is the new challenge facing the corporate world. And so, taking our same definition of ‘management’ the emphasis has now shifted from the ‘work’ to the ‘others’. Of course the work is still important – the bottom line cannot be disregarded, but no longer is merely about the bottom line, the work. Not anyway if a company is to achieve sustainable success over the long haul. Often the things that matter, that really matter, are sacrificed on the alter of short-term expediency and profitability.

It is at this critical juncture (where people connect) that HR should be found with bold insights, creative ploys and clear messages and most importantly, empowered to do what is needed. Jeff Immelt of GE was quoted in the Harvard Business Review (Aug 2003) as saying that, “HR at GE is not an agenda item; it is the agenda” All too often in my experience I have encountered demoralised HR personal who have sold their souls to the corporate mechanistic way. Weary of dissent they fallen in line, colour by numbers and learnt to play the game according to the corporate rules. In so doing HR has lost the privilege of being the company’s conscience, the voice that sounds the alarm and sees the dangers of the rocks that lie in wait. Their companies continue to give mere lip service to the cliche of the people being the most important asset and whilst making all the right noises one only has to chat to any of the ‘people’ to detect how rotten things really are: to everyone but the speechmakers it all seems so obvious.

By marginalising HR we can dismiss it. Done consistently and over a protracted period has resulted in two discernable outcomes.

Firstly, leadership can abstain from involvement in the people side of the business and absolve itself when things go wrong i.e. when people get hurt. Talk to these types of corporate leaders about people issues and they grow increasing uncomfortable. This is the “soft stuff” they have ignored for much of their careers and the corridor to locate their ‘people people’ will be quickly pointed out as soon as one touches on such topics. “Talk to them about all this” is the response. Fred Hassen, Chairman and CEO of Schering-Plough was quoted in the same issue of the Harvard Business Review as saying that the, “CEO has to see himself (or herself: my addition!) as the chief developer of talent, no matter how large the company” Jack Welsh, former CEO of GE, believed that it was necessary for him to spend at least 40% of his time with GE people. Recently I have been involved in facilitating a strategic thinking exercise with an already successful Cape Town based hotel group. Stated clearly in their unfolding plans is significant time for the senior management team to be involved in their training academy. Simply put: a people focus has to start at the top or it doesn’t really exist. Warren Buffet has said that it is when the tide goes out that you find out who has been swimming naked. It is when the tide turns that a company needs staff who are committed, loyal and who have an ownership mentality. Waiting till low tide before attempting to cultivate such characteristics within the corporate culture is to be caught naked. Culture within a company is a consequence, the result of the way the business is run. It comes from the top and when at the top, you have a CEO who doesn’t see HR as their responsibility, it shows. No amount of effort from HR can change that reality – not with any permanence anyway. In a world where talent is the most critical resource leaders have to get involved in the processes designed to attract, select, retain and nurture talent. Savvy leaders are those who are good with people and are constantly seeking ways to make their people successful and not get in the way of that process. “When I hear corporate leaders refer to values and culture as ‘soft’ issues,” says Randall Tobias, former CEO of the pharmaceutical giant Eli Lilly, “I wonder what they regard as being ‘hard’” (Karaoke Capitalism p263).

Secondly, a marginalised HR concerns itself with systems and procedures that generate a flurry of activity, keep people busy, look good on paper and yet achieve nothing. Well nothing that an authentic conversation over a decent cup of coffee wouldn’t achieve. And here is the sad part of it all: all these systems and measurement tools have produced a generation of managers who have lost the art of meaningful conversation as a means to develop their people. The development tools that are employed have only served to sever the relational artery that gives life and procures growth. “Doesn’t anyone else see the irony of this?” I find myself repeatedly asking when confronted by a dazzling array of performance appraisals and developmental systems that haven’t achieved anything close to the intended purpose.

In such an environment HR has lost its way. Who is to blame? Does it really matter and perhaps that is the wrong question to be asking. What is to be done? Is a far better question to be asking. This inquiry, pursued in an environment that is striving to see itself as a whole system, will without doubt lead to a different understanding on the nature, role and activity of HR. It is the leader’s question to be asking. Anything less and I am prepared to bet that nothing will come of it.

So when last did you consider this question? How much of your day is spent with your most important asset: your people? When last did you deliberately get involved in training, mentoring and passing on your experience to those you are responsible for developing?

“Well those are good questions but if you follow the corridor you will see a sign that says HR!”

Keith Coats

Keith@tomorrowtoday.biz

Keith Coats is a director of TomorrowToday.biz, a dynamic organisation that helps companies identify the mega trends that will impact the people connected to their business – employees, customers and partners. Keith is a recognised expert on leadership development and a gifted facilitator, executive coach and futurist.