Management Today, May 1, 2009, Friday

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Management Today

May 1, 2009, Friday

HEADLINE: What is HR Really for?

BODY:
Caught up with cost-cutting measures and making redundancies, the corporate 'people' department is in danger of becoming a bureaucratic pariah. So how can it eliminate the negative - the black humour and the resentment? Stefan Stern shows the way forward for HR professionals - if they are bold enough.

Good old Yellow Pages. It doesn't help just with the nasty things in life, like a blocked drain. It's there for the nice things too, like tracking down an old copy of Fly Fishing by JR Hartley. How unlike those dreadful old HR managers. They really are only there for the nasty things in life, like sacking people - legally. Busy time they are having of it right now too.

It may sound harsh, but the unfortunate truth is that of all the functional departments, HR vies only with IT for the amount of opprobrium it traditionally attracts from everyone else, and the sourness of the gibes made at its expense. It's 'Human Remains' or the 'business prevention department', filled with 'no' men and women who spend their days doing pointless surveys and ticking boxes, apparently unencumbered by any appreciation of the commercial imperative, or of where their salaries come from. Best avoided by normal people if at all possible.

When, in hard times such as these, harried line managers do get in touch with their colleagues in HR, too often they are met with a level of bureaucracy and lack of interest worthy of the civil service. As one such manager, currently engaged in the gruesome business of having to make compulsory redundancies, told MT in exasperation: 'They simply aren't on my side. Dealing with our HR department is like having to contend with a little bit of my local authority at work.'

If, God forbid, they contact you, it's usually some breathless communique about the latest pointless initiative. No wonder no-one takes them seriously. This particular stereotype is cruelly nailed by an old gag. 'How many HR people does it take to change a light bulb?' Answer: 'None, but they'd really like to be represented at the meeting.'

Ouch. It's cracks like these that help bolster HR's position as reigning corporate scapegoat. It remains one of the iron laws of organisational life: when the computers go wrong you send for the IT people (yes, them again), but when just about anything else goes wrong you send for the HR people. It's a bit like the job that Dirty Harry used to do for the San Francisco police department, except without the impressive hardware. And the unconventional but effective meth-odology.

But smart HR professionals - and despite the cliches there are plenty of them - are only too aware that current economic difficulties are likely to trap them in this purely negative role. As Jackie Orme, the new-ish head of the pro-fessional body the Chartered Institute of Personnel and Development (CIPD), said in a recent speech: 'Whatever else we do, let's not allow this recession to brand us only as the ER of the business world.'

Karan Paige, chief people officer for the HR consultancy Ceridian, agrees. 'It is critical for HR not to get sucked into the place of delivering a redundancy plan and slashing training budgets and nothing else,' she says. 'Without suffi-cient business understanding and a fully integrated HR strategy, this is where HR will inevitably end up in these tough times.'

Good diagnosis, but will the patient respond to treatment? And what is HR for, anyway?

Despite its lingering credibility problem - or perhaps because of it - the profession is not short of advice from the outside. A research report published by the Boston Consulting Group, produced with the European Association for Peo-ple Management, contains a 12-point plan for a more purposeful HR function. Among its key recommendations are that HR should be: focusing on strategic workforce planning, anticipating future shortages and 'redeploying competencies'; developing a more long-term approach to performance management; building greater employee engagement by focus-ing on 'motivation and accountabilities'; strengthening leadership capabilities by 'equipping leaders for stormy weather'; adopting a 'systematic, cascading' approach to change management; and 'walking the talk' of internal and external communication. (And that's just by Monday lunchtime). How much easier to be giving such advice, rather than being the one whose job it is to implement it.

At the end of April, the Tomorrow's Company think-tank launched its latest report - Tomorrow's Global Talent: How will leading companies create value through people? The report's authors are clear that talent, or human capital, is central to survival in the 21st century. So, more pressure on HR here too. 'Tomorrow's companies will be good at dis-covering, engaging and leading every ounce of individual and collective capability in people,' says the report. 'For to-morrow's global company this will be their route to world-class performance.'

And now even Jack and Suzy Welch, that entertaining guru double act that features regularly in Business Week magazine, have thrown themselves into the HR debate as well. 'HR matters enormously in good times,' they wrote re-cently. 'It defines you in the bad.'

Jack 'n' Suzy imagine writing a memo to HR departments right now 'Layoffs are your moment of truth,' it would say, 'when your company must show departing employees the same kind of attentiveness and dignity that was showered upon them when they entered. Layoffs are when HR proves its mettle and its worth, demonstrating whether a company really cares about its people.'

They are true believers in HR's role and purpose (even if the conversion may have come late for Jack: as boss of GE in the 1980s and '90s, his nickname was 'Neutron', because he eliminated people but left buildings standing). 'HR is the engine of an organisation's hiring, appraisal, and development processes,' they write. 'Too many companies relegate HR to the mundane busy-work of newsletters, picnics, and benefits ... Every CEO should elevate his head of HR to the same stature as the CFO. But if there was ever a time to underscore the importance of HR, it has arrived. And, sadly, if there was ever a time to see how few companies get HR right, it has arrived ...'

But enough negativity. It's depressing, and it may just be beginning to get out of date. Lurking in the undergrowth of the corporate world are some more hopeful signs - we'd better not say green shoots - of a different and more positive future for HR.

How's this for some fighting HR director talk? 'The CEO knows I will tell him if there's an issue. If he doesn't like what I say, I remind him it's what he pays me for. He knows I have no baggage and my loyalty to the company is un-questioned.

'He looks to me for personal coaching about his interactions with the board, chairman and deputy chairman. I at-tend all board meetings and guide his thinking on issues concerning the executive team, appointments and exits.

'I have to be the thought leader on organisational development, talent management and executive change. I'm also the closest confidant of the CEO.

'My CEO expects to be challenged and receive insights about his leadership style. I tell him things he won't hear anywhere else. He has learned the hard way that this is in his own interests.'

The speaker is David Russell, group HR director at betting company William Hill, and his words can be found in what is quite the best piece of research to be produced on the HR profession in recent years: Configuring HR for To-morrow's Challenges, published by the Corporate Research Forum (CRF) earlier this year.

CRF came up with a robust and persuasive vision of an HR role that might have a useful future. Yes, there is an ongoing credibility problem - too much paperwork, too many self-serving 'initiatives', too little commercial savvy. And, yes, HR professionals need to be seen to be contributing valuable insights and interventions before that credibility problem will go away. They need to be real business people, with a grasp of profit-and-loss realities.

The CIPD's Orme, for example, can explain at some length why Walkers' 'Sensations' crisps - she was formerly HR director for Walkers' parent company Pepsi in the UK - have been such a hit. Something to do with a 'hard bite', apparently. Not all HR directors would be able to talk so knowledgeably about their company's business.

But once some of that precious credibility has been (re-)established, there is an open corporate door for HR pro-fessionals to push at. And the prize is large. CRF puts it in these terms: there is a big job to be done on 'organisational effectiveness'. HR's efforts should be directed towards creating a high-performance work environment that will make the organisation stand out as a winner.

HR professionals will need to change if they are to succeed, says CRF They'll have to have the courage to speak up, to be the guide and guardian of high-quality management within the business. HR needs to think in terms of (inter-nal) customer satisfaction and 'added value'. (No more light bulb jokes.) And it must always be ready to speak up when the organisation is falling short. But it will take brave and competent HR staff to achieve all this.

The other reason why courage is required is that the HR director may be the only senior manager in the business who is able or willing to raise inconvenient facts at the highest level. Patrick Wright, professor at Cornell University's school of industrial and labour relations, has suggested that the HR director could also become a 'chief integrity officer', licensed to challenge CEOs without fear of being dismissed for simply doing the job. Certainly, the current crisis has exposed the lack of rigorous truth-telling at the top of some of the world's most powerful financial institutions.

The concept of a 'chief integrity officer' appeals to Niall FitzGerald, now deputy chairman of Thomson Reuters and for eight years boss of the Anglo-Dutch consumer goods giant Unilever. The idea chimes with him partly because he had already thought of it and has put it into practice in the past himself. 'At Unilever, I told my HR director that he was to come and tell me if my behaviour or that of the company was in danger of crossing a line between what was ac-ceptable and what was not. I said I was holding him accountable for doing that, but that obviously I wanted him to speak freely about any issues that arose.'

Is a glorious future for HR a fantasy, or is it coming slowly within reach? Someone with a ringside seat is Jona-than Hogg, senior partner at PA Consulting, who works with clients specifically on HR and change management. 'A lot of HR people are currently deeply bogged down in cost-reduction exercises and the question of headcount,' he says. 'It's very time-consuming to do that properly, and that doesn't leave a lot of space for more interesting, forward-looking or strategic work.

'You also need courage,' he adds. 'It is a bold person who strides into a room and raises some of these bigger ques-tions at a time like this.'

But Hogg is not completely pessimistic about the prospects for an invigorated HR function to emerge. 'There are lots of able people out there who would love to rise to the occasion,' he says. 'The door is open - but I don't think it will be flooded with people coming through with the right skills and experience to change things. Are they prepared to 'die on the hill' for this? I'm not so sure.'

Other well-informed observers wish the profession well but are similarly uncertain as to whether HR will seize the opportunity that lies before it.

'We are not going to train our way out of this recession; we are going to trade our way out of it,' says Ruth Spell-man, head of the Chartered Management Institute. 'This is not a time for HR to try and look busy by running lots of ar-bitrary training programmes which nobody knows why they are running.'

Penny de Valk, head of the Institute for Leadership and Management, can see HR's opportunity too. 'But will they get out from under all that administrative work and really make a difference? It's not clear which way it will go.'

But we all know what will happen to HR professionals who are not proving their worth right now: a one-way ticket to the offshore HR service centre in Bangalore, anyone?

Undoubtedly, the HR profession has brought upon itself a lot of the ridicule that it has had to endure - through pedantry, an obsession with process, an inability to see the bigger picture, and a lack of courage to stick up for what is right.

But it doesn't have to be that way. With the financial and business worlds in turmoil, and with so many of our other preconceptions being shattered, why can't HR arise gleaming and reborn from the wreckage? Why shouldn't the 'people people' step forward to assert their right to speak up? Have the past 10 years of Enron, Tyco, WorldCom and the splendours of the now largely defunct investment banking industry turned out to be a glorious advertisement for the old way of doing things, for 'business as usual'?

Something had better change, and perhaps now is the right time for HR to take a lead.

TWITS OR TWEETERS?

Here's one way the human resources profession can shatter some of the tired old stereotypes that cling to it: get online. Indeed, it is already doing so in large numbers, as new research reveals.

A survey of 257 senior HR managers carried out by Communications Management, a PR agency that specialises in workplace issues, shows that eight out of 10 of them are using social networking to some extent. Online search was already playing an important role to help them with decision-making - for example, in finding suppliers and providers of professional services. But now HR people are embracing the net enthusiastically.

Explains Trevor Merriden, a director at Communications Management: 'About half the HR professionals we sur-veyed were active users of online media - they are in chatrooms, they are discussing and recommending suppliers and business partners. The other half are more passive, looking and listening but not yet so actively engaged.'

As HR departments come under pressure to achieve greater efficiency, it's not surprising that more and more HR managers are using the web to bring savings. But it is not just their employers that this new cohort of surfers are worry-ing about. There is self-interest here too.

Jim Cassidy, chief marketing officer at StepStone, an HR service provider, pointed out at a recent seminar that the online world has transformed the recruitment business, including the way that individual candidates market themselves. That mild-mannered, unassuming HR director may just be out there right now touting himself on LinkedIn, Plaxo and all the other professional networking websites.

And just when you want to march into their office to give them a bollocking or ask for some help in planning the next wave of redundancies, you may be greeted with a resignation memo - if it hasn't already been e-mailed to you. By the way: have you checked your in-box in the past couple of hours?
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