Ram Charan’s provocative article (It’s Time to Split HR, HBR, p 34, July-Aug 2014) voices a common frustration we hear both from business executives and frankly, HR leaders themselves. Despite stated aspirations to be forward looking thought partners on matters of strategy, organization, and talent, the HR function is often caught up in core administration work. As necessary as this “HR-A” work is, as Charan terms it, we agree that it does not move the business forward.
As organization designers who have helped to reshape the HR functions in over two dozen global companies over the past five years, we are convinced, however, that the solution is not to split HR. While two separate organizations would certainly create focus, the result would only be more internal boundaries and less integration on matters of organization and talent. The reality is that the creation of leadership and organization capabilities often has a strong execution component. Separation is an overly simplistic answer to the problem Charan describes.
Rather, we would argue that today’s HR organization should be a model for the business. Just as business leaders need to balance efficiency and effectiveness, global strategies and local execution, and common process with customer specific solutions, so does HR. And when the HR organization can do this well – through flexible staffing and taskforce deployment, great project management, excellence in matrix management, and disciplined prioritization and governance – the function is then able to help its business clients do the same. If a CHRO can’t build and run a multi-dimensional organization, then he or she certainly can’t advise line managers on how to do so.
The CHROs that are building HR functions that can both deliver high value organization and talent advice, while attending to the administrative tasks, tend to do three things well:
- Deliver core HR services through a center-led, operations-focused organization. This is way beyond shared service centers. Take all the HR-A work, plus the field based, high skill but repetitive work (employee relations, employee engagement, talent reviews, performance management, compensation planning, etc.) as well as project execution and manage it with a high performance, operations mindset. In this model, there are client facing teams of “specialists” – some highly skilled, some much less so – providing a “continuum of services” in person, on the phone, or online.
- Elevate the HR business partner. Relieve HR business partners of their people management and HR service delivery responsibilities. Let a small group of business partners focus on playing the strategic HR consultant and senior advisor role that business executives consistently say they want more of. This is largely a personal practitioner role providing executive development and coaching and devising business-specific talent and organization strategies (see CEB 2013 HR Business Partner Survey for more insight on this topic). In this model, the execution of these business unit specific solutions is provided by the aforementioned core services teams, using tools and frameworks created by global centers of expertise. We find that this creates the focus that Charan is looking for.
- Manage the HR agenda from the top. With the urgent always overtaking the important, the HR plate is quickly filled. Usually this is a result of allowing HR staff at too low a level to contract for work. HR-A work crowds out leadership and organization capability building. The core services model described above depends upon disciplined governance over the work agenda. Smart CHROs actively manage the HR portfolio of work, and resource capacity, to ensure that the highest impact discretionary work, along with the non-discretionary HR work, gets done.
Finally, Charan suggests that the leadership and organization work should be led by a high potential manager pulled from the business, rather than an HR professional. We’re big on the idea of rotating young line executives through HR roles. And we have seen, in addition to Charan’s examples, line leaders who have succeeded as CHROs. But, we don’t subscribe to the hero version of leadership. Organizations succeed from a combination of a clear vision, a well-designed organization, and then the right leadership and talent in a number of key positions. Line leaders in CHRO positions work when 1) these individuals are exceptional leaders, 2) they know what they don’t know and put strong HR domain experts on their teams…and heed their counsel, and 3) they know how to design the HR function to get the results we’ve described above.
Charan’s piece provides a good poke to stimulate discussion. But, honestly, if we were having a similar conversation about the CFO and the finance function, it would be a very short one. We don’t hear anyone advocating to separate “strategic finance” and “accounting” under two separate c-suite leaders. Although, it would be interesting to see someone suggest that the strategic, future-growth-oriented finance job be filled with a high potential from somewhere else in the business – say, Operations, Marketing….or even HR!
Michele DiMartino, Senior Consultant
Amy Kates, Managing Partner