We recently wrote how the respected management consultant, popular speaker and author of several best-selling managerial books Ram Charan suggested dividing HR departments in organizations into two separate functions which would report to the CFO and to the CEO. Charan's article entitled "It's Time to Split HR" raised a number of controversies e.g., on the LinkedIn social network. Dave Ulrich, the author of the HR business partnership concept, commented on it in his own article directly on the Harvard Business website.
"While I have enormous respect for Ram’s wisdom, I believe CHROs have much to offer CEOs and can be better prepared to do so without splitting HR," says Ulrich. In his opinion, Charan's article has, in fact, actually confirmed the importance of HR for maintaining an organization's competitiveness. He considers the criticism of HR in the article to be unfair and overly simplistic.
According to Ulrich, Charan overlooks the 20-60-20 rule which applies to HR in the same way as in finance or other professions. This means that 20% of people in a profession are exceptional, bringing value and helping organizations move forward. The other 20% are stuck in their thinking and lack the ability or interest to bring any true value to the organization, and the remaining 60% are in the middle, between the two extremes. Rather than criticise both smaller groups, we should focus on the remaining 60% and actively teach them how to help further improve their organizations.
Ulrich thinks that the top 20% and soon, hopefully, even the middle 60% of HR professionals focus on three things: talent, leadership and organizational capabilities. These must be approached not from the inside out, but rather from the outside in as he described in his book HR from the Outside In. The book has recently been published in Czech under the title Nová éra řízení lidských zdrojů – ze servisu partnerem (Grada, 2014), and is called "the Bible of HR business partnering."
The split suggested by Ram Charan simplifies the problem of effective HR management and does not define how HR can deliver value or how to develop HR professionals. In a centralized management structure, Ulrich thinks HR should work as an independent service company divided into three parts - HR generalists, centers of expertise and service centers - all of them under one leadership. This is similar to when accounting, marketing, and sales departments work together in organizations.
Do you apply the HR business partners model in your organization, or were you caught by Ram Charan's idea?
You can read more about Dave Ulrich's model of HR management in organizations in our recent article entitled Ulrich is out of date?
You can also read recent interviews with Czech HR managers on HR business partnering published on HRNews.cz:
HR Business Partner as an important part of the business or a cliché?
HR business partner is not just a title on a business card
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