I’m loving the thinking bouncing around, reading about value and influence at SystematicHR ” HR Versus Finance â€“ Influence, Power, and a Seat at the Table Part 2” and ItzBigBlog “Want to increase ROI? Start investing in talent.” This is precisely what I love about blogs and blogging – seeing ideas spin in new and different ways and participating in the conversation.
A few quotes to put my thoughts into perspective:
If weâ€™re locked up in a knowledge economy, why are we still using industrial era production analysis when the real capital is talent? If business can make the shift to evaluating the return on talent rather than capital, would this make the executive teams more interested in what weâ€™re doing?
And in a tangential, almost unrelated discussion at ItzBigBlog:
Among all the C-level players in a company, there needs to be a Talent Officer. Without someone representing talent in executive-level decisions, your talent probably isnâ€™t giving you the highest return… The Chief Talent Officer would have responsibility for the organizationâ€™s acquisition, retention and development of talent.
I still think that there is a “miss” in the thinking about how an HR group becomes more valued, or more critical to driving business results. I don’t think it is for lack of metrics on headcount, or for a lack of representation in executive discussion I’ve seen reports, as well as participated in executive conversations with the regular attendance of the senior HR management. This emphasis just seems off.
I think the miss is this:
Influential HR (execs or departments) render insights on the progression of human capital development, not the processing of talent into-and-out-of the company.
Just as investors of capital seek the highest possible rate of return for a given level of risk, working professionals are much the same – seeking the highest level of fulfillment for a given combination of challenge, compensation and satisfaction. The challenge is effectively helping management manage more effectively.
Functional executives (and managers) are accountable for functional results, with moments of insight on service delivery and improved sharedholder value. Developing the people within the business falls to the wayside when the pressure is on.
No talent-driven organization can afford a culture that neglects development. No one is presently ensuring that organizational managers are managing their staff in a measurable way that impacts shareholder value, or performing the necessary analysis to see if this potential capital pool is in fact, developing.
Sales champions the needs of customers to operations. Finance champions the needs of shareholders. Human Resources must champion the developmental needs of talent, and the culture that reinforces that.
I think a very central understanding that is only implicitly understood is that, to be fully effective and gain influence, we must be capable of applying our unique expertise (by way of insight) in another’s world. We need to be able to cross functional lines, and help other departmental managers view old issues in new ways, demonstrating our valuable perspective.
Let me provide a few examples to make this idea a bit more concrete, using weak (but common) assumptions about roles and contribution. I think these stereotyped responsibilities represent the limited thinking that can prevent HR from being a more vital partner in business performance.
HR administers and process the annual review process – period. (If you’ve read much of More than a Living, you’ve seen us rant – and maybe shamelessly plug – the soon-to-be released Kumquat, where employees take ownership of feedback on their performance. This isn’t another Kumquat rant). Processing reviews has been the norm I’ve observed time and again, with a heavy emphasis on processing. This is a waste of effort if the entire activity is simply to figure out how to allocate 3-5% raises and 10% bonuses.
- Analytics of personnel performance should identify high and low performers relative to their position. Quantitative scoring makes the rough cut rapid, and facilitated review of the qualitative feedback (with department management) should help business leaders identify how to manage today’s resources most effectively. HR can help hold managers accountable to their employees to ensure that “managing” occurs.
- If the organization is hiring “with the end in mind”, there should be some very open conversation about where people are performing, in both their current role and in terms of where they can go. This should be a role that HR expertly facilitates, forcing managers and the managed alike to come to partner at the table and not shy away from honest talk. Facing hard realities head on gives us the courage to make dramatic changes.
HR is responsible for Human Capital Management, cradle to grave (or hire to separation). If the people doing the work can’t at least drum up a few possible candidates, is this a sign of broader issues?
- A simple measure of a good hire is that former co-workers would choose to work with them again. HR should be driving this value into the cultural heart of the organization, that the best new hires are likely going to be found through the existing personal and professional networks of existing employees. Nothing is more poweful in the hiring process than a new hire that can impact one’s personal reputation, and people know this.
- An HR consultant should operate like a Project Manager for Talent: ensure that goals are identified, the effort is scoped, and that progress is measured. Know that functional managers will be pulled into the meat of their business – and be there to bring them back to the business of managing the talent they have fought tooth and nail to be able to hire.
HR produces metrics (largely regulatory) that are of little interest to the business. It’s not that the metrics are wrong, but that they aren’t designed for the business audience. Talk to business in their language, applying expertise to non-HR issues.
- Be prepared to help functional managers support their need for additional staff with industry statistics. It’s not always easy to backfill a departure, and is becoming nearly impossible in many organizations to justify a new hire.
- Report on and acknowledge where bad things are not happening. We always hear about turnover metrics and talk in budget squeezes of delayed hiring; collaborate to articulate the marginal value of the next hire – in the value-oriented language of the department seeking to hire them. All managers even in “overhead” departments – should be able to describe the value of an incremental FTE in services impacting customers and shareholders. If they can’t, then that is truly overhead. HR can and should play a powerful role in putting new talent in the hands of the most able talent developers, as well as identifying high-performing managers to mentor and grow potential leaders.
If some of these points are standard practice at your company, I’d love to hear about it. The bullets above are employee-centric in my mind, driving first a higher quality worklife for people that are passionate about their work, but also increasing the overall delivery of the organization at large.