Home' HR Monthly : March 2015 Contents NO
DAVE ULRICH, UNIVERSITY
PROFESSOR, AUTHOR AN D
While I have enormous respect for Ram's wisdom, I
believe CHROs have much to offer CEOs and can be
better prepared to do so without splitting HR.
Charan ignores what I call the 20-60-20 rule. In HR
(or finance or IT), 20 per cent of the professionals are
exceptional, adding value that helps organisations move
forward; 20 per cent are locked into a fixed mindset and
lack either competence or commitment to deliver real
value; and 60 per cent are in the middle. It is easy and
fair to critique the bottom 20 per cent, but it's not fair to
paint the entire profession with this same brush.
The top 20 per cent today (and I hope more of the
60 per cent tomorrow) focus on three things: talent,
leadership and capability, along with their attributes:
· Talent: delivering competence (right people, place,
time, skills); commitment (engagement); and
contribution (growth mindset, meaning and wellbeing)
of employees throughout the organisation.
· Leadership: ensuring leaders at all levels think, feel and
act in ways that deliver sustainable market value to
employees, customers, investors and communities.
· Capability: identifying the organisation's capabilities
(called culture, system, process, etc) that enable
organisations to win over time. These capabilities
would vary depending on the strategy, but might
include service, information, innovation, collaboration,
risk, efficiency, change (adaptability, flexibility),
culture change, learning, strategic focus, etc.
I strongly believe that excellence in talent, leadership
and capability requires an 'outside-in', not 'inside-out',
perspective. For talent, being outside-in means not being
the employer of choice, but the employer of choice of
employees that customers would choose. It means that
effective leadership is defined through the brand promise
made to customers and the intangible leadership capital
that investors value. And that capability becomes defined
as the identity of the firm in the mind of key customers.
Charan's advocacy for a "talent" HR role actually
limits the breadth of what HR can and should
deliver. When HR professionals bring unique insights
about talent, leadership and capability to the senior
management dialogue, they add enormous value. I
suggest that HR professionals are better at delivering in
each of these areas than line managers who get moved
into HR roles - the path Charan recommends.
Charan's recommendation for splitting HR into two
groups raises two concerns. First, it offers a simplistic
structural solution to the fundamental challenge of
increasing HR's value to the business. Charan has reduced
the HR challenge to a governance problem. Upgrading
HR requires more rigorous redefinition of how HR can
deliver value, how to develop HR professionals and how to
rethink the entire system of HR.
Second, advocating the separation of the HR function
into two groups can't be a blanket solution to HR
governance. The structure of the HR department should
be tied to the business structure (a centralised business
shouldn't have divided HR governance, nor should a
pure holding company). In diversified organisations,
HR departments should be run like professional
services firms. This approach offers the benefits of
centralisation (economy of scale) and decentralisation
(local responsiveness). In fact, many large diversified
organisations have separated HR into three groups:
the embedded HR generalists who work with business
leaders on talent, leadership and capabilities; centres
of expertise that offer analytics and insights into HR
knowledge domains; and service centres that do the
administrative work. All can be governed under the HR
umbrella, just the way marketing and sales work together.
I suggest a holistic approach to helping the middle 60
per cent. This includes redefining the strategy (outside-in)
and outcomes (talent, leadership and capability) for HR,
redesigning the organisation (department structure),
innovating HR practices (people, performance,
information and work), upgrading the competencies
for HR professionals, and focusing HR analytics on
decisions more than data. ..
"CHARAN'S RECOMMENDATION OFFERS
A SIMPLISTIC STRUCTURAL
SOLUTION TO... INCREASING HR'S
VALUE TO THE BUSINESS."
This is an edited extract from Dave Ulrich's article
'Do not split HR - at least not Ram Charan's way',
published on the Harvard Business Review's blog.
FROM RAM CHARAN
AND DAVE ULRICH
keynote atAHRI's 2015
AND EXHIBITION CENTRE
26 & 27 AUGUST
25 - 28 AUGUST
To support the strategic
initiative of professional
certification, AH RI has
developed a program under
the banner of the AHRI
Program in H R CAPCP).
Having been built around
the newly developed Model
of Excellence, the APCP is
well positioned to serve as
a framework for supporting
the building and transfer of
skills and knowledge.
March 2015 HRMonthly 15
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