If HR is the most powerful part ofan organization, as you always say, why is its impact felt only in a negative way?—Fadi Rahal, Kentucky
At too many companies, unfortunately, the human resources department gets it wrong. Either it operates as a cloak-and-dagger society or a health-and-happiness sideshow. Those are extremes, of course, but if there is anything we have learned over the past five years of travellingit is that HR rarely functions as HR should. That’s outrageous, made only more so by the fact that most business leaders aren’t scrambling to fix it.
Look, HR should be every company’s “killer app”. What could possibly be more important than who gets hired, developed, promoted or moved out of the door? After all, business is a game, and as with all games, the team which puts the best people on the field, and gets them playing together, wins. It’s that simple
You would never know that, though, looking at the companies today, where the chief financial officer reigns supreme and HR is relegated to the background. It just doesn’t make sense.
If you owned the Madrid Real, for instance, would you hang around with the team accountant or the director of player personnel? Sure, the accountant can tell you the financials. But the director of player personnel knows what it takes to win: how good each player is and where to find strong recruits to fill talent gaps.
That’s what HR should be all about. And, as you point out, it’s usually not.
That has never been as painfully clear to us as it was several years ago when we spoke to 5,000 HR professionals in Mexico City. At one point, we asked the audience: “How many of you work at companies where the CEO gives HR a seat at the table equal to that of the CFO?” After an awkward silence, less than 50 people raised their hands. Awful!
Since then, we have tried to understand why HR has become so marginalized and, as noted above, there are at least two poles of bad behaviour.
The cloak-and-dagger stuff occurs when HR managers become stealthy little kingmakers, making and breaking careers, sometimes not even at the CEO's behest. These HR departments can indeed be powerful, but often in a detrimental way, prompting the best people to leave just to get away from the palace intrigue of it all. Just as often, though, you get the other extreme: HR departments that plan picnics, put out the plant newsletter and generally drive everyone crazy by enforcing rules and regulations that appear to have no purpose other than to increase bureaucracy. They derive the little power they have by being the “you-can’t-do-that” police.
So, how do leaders fix this?
It all starts with the people they should be hiring to run HR: not kingmakers or cops but big-leaguers, people with real stature and credibility. In fact, they need to fill HR with a special kind of hybrid. What’s needed are people who are one part pastor, hearing all sins and complaints without recrimination, and one part parent, loving and nurturing, but giving it to you straight when you’re off track.
Pastor-parent types can rise through HR but, more often than not, they have run something during their careers, such as a factory or a function. They get the business—its inner workings, its history and tensions, the hidden hierarchies that exist in people’s minds. They are known to be relentlessly candid, even when the message is hard, and hold confidences tight. Indeed, with their insight and integrity, pastor-parents earn the trust of the organization.
But pastor-parents don’t just sit around making people feel warm and fuzzy. They make the company better, first and foremost by overseeing a rigorous appraisal and evaluation system that lets every person in the organization know where he or she stands, and monitoring that system with the same intensity usually applied to Sarbanes-Oxley compliance.
Leaders should also make sure that HR fulfils two other roles. It should create effective mechanisms, such as money, recognition and training, to motivate and retain people. And it should force organizations to face their most charged relationships, such as those with unions, individuals who are no longer delivering results, or stars who are becoming problematic by, for instance, swelling instead of growing.
Now, given your negative experience with HR—and you are hardly alone—this kind of high-impact HR activity probably sounds like a pipe dream. But with most CEOs loudly proclaiming that people are their “biggest asset”, it shouldn’t be.
It can't be.
Leaders need to put their money where their mouths are and let HR do its real job: elevating people management to the same level of professionalism and integrity as financial management. Since people are the whole game, what could be more important?
Jack and Suzy are eager to hear about your career dilemmas and challenges at work, and look forward to answering some of your questions in future columns. Jack and Suzy Welch are the authors of the international best-seller,Winning.Campaign readers can email them questions at email@example.com. Please include your name, occupation and city.
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