Strategy Execution Blog, Research and Analysis
Common Misconceptions Between CEOs and HR Professionals
Are HR Pros a bunch of flowery, sensitive, feel good, paper pushing pencil necks? Well, the answer to that question depends on who you ask. Interestingly enough it would seem some CEOs still think this is the stereotypical HR person but thankfully that is beginning to change.
I’ve had the opportunity to engage in many discussions recently to gain insight into where we as an HR profession are heading, and are perceived to be.
Nearly every HR professional I’ve spoken with agrees that HR belongs “at the table” with our CEOs in order to assist in developing strategic plans that assist the organization in meeting its goals. What’s interesting though is not all these same HR folks believe much should need changing in order for HR Pros to have that input. That is where I disagree.
CEOs on the other hand, have expressed to me that they believe HR plays an important part in their organization. They see the services HR offers as a value to its employees and often to the organization as a whole. At the same time, most of the CEOs I’ve spoken to recently have shared that the most troubling aspect about HR is its difficulty in developing a business case that shows quantifiably how HR programs measure up. They also in many cases feel that HR Pros don’t typically understand business language and often fail at being able to interpret a simple balance sheet, cash flow statement or income statement. These observations have led to discredit HR Pros in areas where interpretation of the challenges the organization is facing in a global context are needed.
So what is HR doing well? The CEOs I’ve spoken with all seem to agree that HR has been doing a good job of helping their managers with what I would refer to as “the daily housekeeping.” I say that because the reality is these tasks are really just what we are supposed to be doing. It’s like making your bed in the morning or brushing your teeth at night. The tasks many HR Pros are doing are simply just that, daily tasks without strategic vision, or being able to quantify to others the value these tasks create.
In HR we provide advice and build systems related to workforce management, job design, staff training and development, and trying to prevent or putting out the fires that relate to employee and labour relations. In some instances HR Pros have gone beyond the daily affair and have implemented programs such as succession planning, diversity programs, or talent management systems that build pipelines into the organization rather than counting on traditional “single job” posting strategies. Some organizations have also started to incorporate technology into how they do business in HR via process automation or communication. But how many HR Pros can tell you the impact these programs have on the organization and what the overall strategic reason is they are doing any of them?
For instance if the idea of a program is to increase job satisfaction and productivity by retaining employees and reducing turnover through analysing social trends and getting ahead of the game, then great! The questions that some CEOs would likely ask are perhaps the following:
- What is the total cost of the program from development to implementation?
- How are we currently measuring job satisfaction and where is it currently?
- What is the projected increase in job satisfaction?
- What costs are currently associated with current employee retention and turnover?
- What are the projected improvements to costs related to employee retention and turnover?
- How are we currently measuring our productivity?
- What is the projected increase in productivity?
- Are there social implications, legal implications, and environmental implications?
- What will be the impact of this program on the organizational brand?
- How will this impact organizational performance?
- Does this program add value or a perceived value to the shareholder’s return on investment?
But let’s also not forget that quoting a bunch of metrics doesn’t mean much either if you aren’t able to sell the idea to the stakeholders. What strategies are developed to gain “buy in” from those who are involved?
Sure there are the normal considerations, the employees, the management and perhaps the union(s) if they exist. What about getting outside of the box though and digging deeper? What other implications could strategies have?
Some considerations include political and social groups that may have agendas of their own and partnerships with the organization that need to be considered. This is most certainly true in any publicly funded organization or non-profit, but also may have implications in private industry. If there is an idea that increases productivity and retains an additional $5 million in earnings but is found to “not fit” with a client organization’s values who happens to hold a $10 million account it may be worth reconsidering. Would you want to be the HR Pro that initiated a program or strategy that managed to lose an account that was worth twice as much than the money that was saved? I know I wouldn’t.
My point is, HR Pros in general it would seem need to get their heads out of the sand and start thinking at a critical level about the organizational impact their strategies have. They should start thinking of strategies that drive the business forward instead of simply reacting to circumstance at the present time. HR Pros need to become more aware of the impact their strategies can have at the macro and micro levels and take those into account before implementation. If we as a group of professionals ever want to be viewed as credible business partners around the executive table then we need to start acting like we belong there.