International consultant and management author, Ram Charan, wrote a provocative article in the July-August issue of Harvard Business Review. In It’s Time to Split HR he declares “I talk with CEOs across the globe who are disappointed in their HR people.” He goes on to explain that CEOs would like to get the same sort of strategic advice from their CHRO (chief human resources officer) as from their CFO and use them as sounding boards and trusted partners in key people and organizational issues.
Ram recommends breaking the profession into an administrative department for compensation and benefits reporting to the CFO and a higher level group for improving leadership and organization capabilities reporting to the CEO.
In response to Ram’s article, business professor, author, consultant, and HR researcher, Dave Ulrich, argues that instead of rearranging organization charts we should Focus on Creating Value Not Splitting HR. The most insightful section of Dave’s response is the unique value that highly effective HR leaders add. He breaks these into three interconnected and strategic areas:
Talent: Delivering competence (right people, right place, right time, right skills), commitment (engagement), contribution (growth mindset, meaning, and well-being) of employees throughout the organization.
Leadership: Ensuring leaders at all levels who think, feel, and act in ways that deliver sustainable market value to employees, customers, investors, and communities.
Capability: Identify the organization capabilities (called culture, system, process, resources, etc) that enable organizations to win over time.
These three areas align well with what we see distinguishes the best from the worst HR leaders in our work with a wide variety of organizations. When HR leaders elevate their departments beyond transactional or administrative tasks to a strategic focus around these three key areas they add exponential value.
This requires HR leaders who think strategically, are system-oriented, deeply understand and serve operations, personally model strong leadership behaviors, and have built their credibility, relationships and courage to push back when executives or the team is veering off track.