Workforce Management, June 23, 2008, Monday

Workforce Management

June 23, 2008, Monday

Workforce Management

Sharing Blame

Too many of the critics of HR ignore the fact that not enough line managers understand what hr should be doing, or what good it can do for their company. This won’t be fixed by belittling HR.

By John J. Haggerty

I’m tired of all the criticism of human resources.

Granted, much of it is accurate and deserved, and all of it probably fits some HR organization somewhere. But come on—HR is a soft target. The punch lines come easy, and nobody tells the other side of the story. The wise old industrial relations manager once said about poorly managed companies, "You get the union you deserve." My small modification to make this statement relevant today would be "You get the HR you deserve." Let me try to explain.

HR is not a freestanding, financially independent and omnipotent empire within the boundaries of any modern corporation that I have been inside. It is the product of a decidedly administrative heritage, only recently freed from the cost center dungeon. In even the most progressive of companies, including the one I grew up in, the modern "business partner" orientation is barely into its college years.

While more enlightened CEOs recognize and fully embrace the power of strategic HR, they are still the exception. Lower in most organizations, fewer line managers understand the real contribution HR can be expected to make to business performance. To solely blame the HR function for its current state of development is silly. To suggest that a primary cause for a business failure is the failure of HR to "become business leaders" is naive. There is so much more to the story.

What HR contributes to business performance is a function of many things, two of the most important being the capability of those in HR and the demands and expectations of line management. Often, in my experience, the former exceeds the latter. The best of all worlds, obviously, is when HR capability is stretched and challenged by an informed and demanding line management team. This is the sweet spot of strategic HR, and while more great companies are joining the ranks each year, it is a circumstance still all too rare.

Anyone in HR who has had the opportunity to work for a line manager who "gets it" will instantly know what I mean. Those line managers look to HR for everything. They use HR as a neutral sounding board for their half-baked ideas. They test their understanding of political situations with their HR manager before uttering a word in public. They ask for candid feedback on their own performance and ask their HR manager to review the performance of other key members of their staff on a regular basis.

High-ranking line managers, up to and including the CEO, pay their HR manager on par with their CFO. They vent their frustrations, complain about their boss, gripe about the board and ask for tips on their short game—all behind tightly closed doors. They are not afraid to send the signal loud and clear that "HR is part of my inner circle." And when these line managers get promoted or leave, they do everything in their power to take their best HR managers along for the next ride. Some of us know what that feels like—but unfortunately, too few. And even in the best-managed companies, this type of line manager is not universal.

Those same line managers who value their HR manager as a key confidant also demand that HR perform up to the highest possible level across the board. In fact, they don’t just put their trust in anyone wearing the name HR. They carefully observe and groom talented HR people for the role, often reaching far down in the organization to plan for the future.

They look for HR folks who take the time to learn the business at a detailed level and who measure their contributions in business terms, not HR terms. They look for business people who have a passion for HR. When they find one, great business leaders invest their own time in developing their HR protege’s instincts. They take neophytes under their wing and help them see the subtle connections and rhythms of the business cycle. They share their intimate knowledge of the competitive landscape. They make sincere introductions to important power brokers and thought leaders, never once apologizing for "bringing along HR."

But above all, these line managers demand results—real business results from HR, not just happy faces on the annual survey.

Being the HR business partner for someone who does get HR is not an easy job. It has nothing to do with how much you like people. It’s a good job, but it often means doing bad work. The boss who smiles and pretends to care in the presence of a failing staff member may look to HR to solve the problem. The CEO who knows that two subordinates can’t stand each other may ignore the problem in staff meetings, but suggest to HR that the two must learn to work together—or else. Some bosses with good HR support will avoid giving negative feedback to anyone, instead allowing HR to carry the message through other channels. The best HR folks will help such bosses see their flaws, and over time, help coach and develop them. But for the moment, HR will get the important work of the business done.

The problem is that you don’t get to do this real strategic HR work if the fundamental systems owned by HR are weak or broken. Too many HR managers fall into the trap of trying to become strategic without first becoming good. They ignore things that most people in the organization judge them on. They dismiss payroll and benefit issues, or recruiting and staffing glitches, as if these were someone else’s problems. They criticize poorly conceived and executed HR centers of excellence right along with their clients.

They act like those issues aren’t what HR is really about. But great line managers do not differentiate between the tactical and strategic—they expect everything to be done well. If you and your HR organization cannot deliver the mail, don’t expect to fly the company jet. Flawless execution at the base is the only way to reach the higher ground. If you inherit an HR organization with a weak foundation, that’s where you need to start.

HR professionals who are in the wrong organization, or are simply working for the wrong type of boss, will often cling to the low value-added work they grew up with. It is easier than pushing on the strategic HR rope. They will hire more HR people who are poorly prepared to have any real impact on the business. The cycle of low expectations met by low performance will continue.

Conversely, HR professionals who are in the right organization, working for informed and enlightened line managers, will wake each day wondering how to run a little faster and jump a little higher. They will invest heavily in the recruitment, selection and development of their HR colleagues, and they will keep score in market share, ROI, revenue growth and stock appreciation. And most important, those HR professionals will be well funded, supported and rewarded by their increasingly demanding line management clients. Good HR flourishes in a virtuous cycle.

Unfortunately, not many companies grow enough of this kind of line manager, and they remain the exception. Instead, too many line managers (and many a CEO) have no clue what strategic HR is or how best to make use of it. Most CEOs tolerate being in the presence of their HR manager, but save their stories about the board for the CFO. They demand legal compliance, but stop short of demanding upside business impact.

Some still look to HR for the "health and happiness" quotient, planning the golf outing and supporting the blood drive (or may­be the weight-loss program). Others completely ignore HR until someone important gets caught in a compromising position with a subordinate. They demand nothing meaningful (in concrete business terms) from HR, and are therefore not disappointed when HR delivers fluff. These line managers pretend to listen to good ideas and best practices, but never track, fund or implement any of them. In turn, these organizations build HR functions that lack legitimacy, staffing them with people who lack business skills and the capability to affect real results. Bad HR festers in a vicious cycle.

Regrettably, too few business schools teach future line managers what they should actually expect from a modern HR function. Most MBA curricula only require one HR course—a tired survey of the traditional HR silos (recruiting, selection, performance management, etc.), delivered in a monotonous tone by a junior professor who did not have enough pull to get out of teaching HR. These aspiring MBAs will study Jack Welch’s management genius in all their other courses, yet fail to recognize his philosophy as the embodiment of strategic HR. And even with a superstar like Welch as HR’s biggest cheerleader, few CEOs have stepped up and really raised the bar on their HR functions’ performance. No wonder there is so much criticism. To those who expect little, little is given. You get the HR you deserve.

While it is my sense that more and more companies are demanding more of HR every day, there are ways to accelerate the change further. One of them is not to take cheap shots at HR. Rather, we should all be encouraging more management teams (line plus support functions, including HR) to study strategy and its applications to their business as an intact team. They need to learn together to begin to comprehend and chart the intersection of strategy, management behaviors and HR practices and their collective effect on firm performance.

Rather than spending a lot of time and money training HR to be strategic, maybe more chief human resource officers need to invest their social capital in the recruitment and development of more enlightened line managers. And business schools need to make a significant investment in the teaching of human resources to aspiring general managers. Only when the demand side of the equation (line management) is raised will the supply side (HR) be given a platform from which to perform. Anyone who has "pushed" their HR agenda on a disinterested line management will understand what I mean.

So what should you take from the collapse of Bear Stearns? HR probably deserves its share of the blame. But unless you were in the boardroom, watching closely as the chief human resources officers and CEO negotiated HR’s agenda and funding level, and you fully understood the relationship between line management and HR through­out the organization, I’d be careful not to assign too much blame to one person, or one function. Unless, of course, you also believe that Google’s success is due solely to HR.

Workforce Management, June 23, 2008, p. 34-36 -- Subscribe Now!

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John J. Haggerty is managing director of executive education at Cornell University's School of Industrial and Labor Relations and a former vice president of human resources at General Electric. He has a B.S. from Cornell's ILR Scholl and an MBA from Case Western Reserve University's Weatherhead Schopl of Management. He is completting his Ph.D in human resources studies at Cornell. To comment, email editors@workforce.com.