In the first part of the article, we showed you how the role of HR directors should change. Our short article was based on an article called People Before Strategy: A New Role for the CHRO, which was published in the summer on the Harvard Business Review server as a part of a series of texts on the topic why it is necessary to get rid of current HR practices.
The authors of the article are Ram Charan, who is an advisor to CEOs and executive teams, Dominic Barton, director of the consulting firm McKinsey and Company, and Dennis Carey, a manager of the firm Korn Ferry, who specializes in the recruitment of CEOs.
The authors are convinced that the core team of every company should consist of the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) and the Director of Human Resources or Chief HR Officer (CHRO). There are three activities that are crucial for new HR, which we described in the first part of the article: making predictions, diagnosing problems and enforcing steps that will bring value. Today we are looking at what a CHRO should not do.
What not to do?
The CHRO can get some time when he stops doing things which he should not be doing. For example, benefits management and administration are things that someone else can do. Feel free to make it a responsibility of the CFO. The CHRO can then devote his time to talent search and talent development. The second possibility is to move those operations to a shared service center that supports all departments. In contrast, the remuneration decisions should involve CEOs and CFOs, because remuneration has a huge impact on people's behavior. Many of the most successful HR directors have noticeable experience from positions outside HR.
Many CHROs are often evaluated on the basis of whether they are able to carry out a project with constrained resources, whether they are able to increase employee engagement and whether they are successful in recruiting critically important people. Connecting these activities to value creation, however, is still problematic. In order to change the perception of HR as being a cost department which does not bring any added value, it is necessary to measure its impact on revenues, profitability, brand awareness and market share. The closer the relationship between the work of HR and these indicators, the better.
How can a CHRO create value?
For example, by moving a certain worker to work under a different boss when it creates an increase in productivity. A CHRO can also provide coaching and increase his expertise in some key areas. A CHRO can also bring the right person from outside of the firm to a vitally important position. He can also help by putting a few people together who create a new initiative. He can help to promote and foster cooperation where it is problematic. A CHRO can also get rid of a head of a division, because he knows that he person has no chance of fulfilling what the next two years require. Putting the right people in the right positions is the most important thing for the growth and development of any company. And that is the CHRO’s job.
When the CHRO regularly sits at the table with the CEO and the CFO, it will work. Pragmatic topics will be opened and discussed and that is what the company needs. Financial results are as important as talent and development is. Appointments may be casual, but they must be regular. The triumvirate formed by the CEO, the CFO and the CHRO has the capacity to solve even unexpected changes in the market by taking into account all the key aspects. And the sooner these meetings begin, the sooner the CHRO gains awareness about business and how the rest of the company works.
-jk-