How HR does become more entrepreneurial or “7 steps to get the seat at the table”

When attending conferences or any other gathering of HR colleagues and peers, I experience over and over again a mixture of disappointment and being offended that HR does not receive the appreciation it does deserve – despite the fact that people shall be the most critical success factor for organizations. Everybody is talking about Engagement, Leadership or Employer Branding. And these topics are identified as areas in which companies and especially top managers have to excel. At the same time, many organizations are struggling to retain and/or hire the right talents who are critical to master the challenges of digitalization and all the other mighty disruptions organizations are facing. Something seems to be wrong here. HR Managers’ despair culminates in the often-used claim “getting a seat at the table” which is strongly desired by HR. But CEOs are obviously not very often willing to spell out an invitation. In fact, articles such as “Why we still hate HR” find broad consensus. At least here I can understand all the disappointment: who does love to go an extra-mile in his/her job if the response is a certain disdain.

The best advice in this matter I have heard from a Chief People Officer of one of the big Chemicals who did recommend the gathered audience of European HR Directors: “If you don’t get an invitation for dinner, just show up and ask what is on the menu”. You can try that, for sure, but personally I do have some doubts if that actually does work.

If you take the right approach you can make it happen that the CEO does ask on her own „Where is HR?“ and does not begin with her agenda before her business-critical function did take the seat at that famous table. But to get that recognition HR must become much more entrepreneurial than today. Consequently, follow these steps to get there:

Step 1: Begin with the Business Strategy and think about what do you want to achieve as an organization and how to you want to succeed in competition. This is not a conventional question for HR but it is essential for each and any HR Manager to fully get that point. Ask your CEO who should have a persuasive answer. If not, you are asking in this moment exactly the right question. A good reading here is the book “Blue Ocean Strategy” by Chan Kim and Mauborgne.

Step 2: Discuss with your senior leadership team which Strategic Capabilities your organization does need to achieve the strategic objectives you did define before (see 1.) and which cannot easily be copied by your competitors. Well renown examples are Amazon’s outstanding logistics (“same day delivery”) or Google’s competence to smartly use big data to place targeted individualized advertisements. Unfortunately, many HR Managers do not have deep insights how the business model of their own company does work – but exactly this is crucial for success.

Step 3: Only now we get to HR’s core competencies: derive, which Talent Portfolio does your organization need to build and sustain the strategic capabilities. Question here is, which jobs and roles are needed in future and who are the “right” talents for your organization.

The German engineering and electronics company Bosch is a striking example which tremendous challenges are coming along digital transformation: whilst the company is hiring thousands of engineers to conquer the market around the Internet of Things (IoT) and Autonomous Driving whilst elsewhere long-standing employees of the Diesel division are fearing to lose their jobs. The answer, how to deal with the many employees of large enterprises who are not easily able to make the move to Industry 4.0 and the new way of work, is still outstanding – which is in turn a big chance for HR.

However, HR Managers have to learn to see investments in talent like a financial investor: all organizations have limited resources and have to make an active decision how time and money shall be invested to gain an optimum return instead of treating all roles and employees equally. Admittedly, most HR Managers do not only feel uncomfortable with such a mindset, they strictly reject it – even if it is vital for the organization. An excellent paper (probably the best) is from Huselid: “A-Players for A-Positions”.

Step 4: Now that you did lay the foundation you can derive Critical to Success Competencies (knowledge, skills, abilities and attitudes) according to the role priorities you did define in the step before. But please, do not think in terms of the still common job descriptions with 30+ requirements listing everything and anything coming into mind driven by a gut feeling. Better use the Critical Incident Technique and ask senior business leaders what does differentiate successful incumbents from less successful ones, according to their own longstanding experience. Beyond a better quality of responses this does have the advantage that business managers do not have to try to get into the HR world with its own language but stay “home” in their own ecosystem. Second, you directly get the behaviors which otherwise have to be identified by HR in cumbersome exercises – often ending artificially and divorced from reality.

Step 5: Finally, you can start the activities in which HR is usually very good. Let me label that as Talent Management:

  • Hire the right candidates
  • Help the new hires to succeed with appropriate on-boarding and permanent learning/training (even if HR should be “only” coordinator and enabler – people managers have to do the work and should be held accountable for)
  • Systematically develop talents with differentiated career models and career paths to multiply individual success (yes, even that does not happen only out of philanthropy)
  • Assure sustainability by a systematic but flexible succession planning
  • “Maintain” current staff by scouting talents, assessing potential and performance as well as by giving chances to learn and develop (maintain is actually not a nice word but here we are talking about continuously caring for the most important asset of a company)

Step 6:    It is probably the old chicken or egg dilemma but probably Leadership Enablement has to happen in parallel to everything what is stated above. HR must assume a role as enabler of people managers by establishing common believes and behavior on leadership principles and values. Key to any successful change is to get the middle managers and somebody (= HR) has to take care that there is a common set of values as well as the necessary toolset for good management and leadership.

Beyond, another dimension of leadership enablement is a supply of reliable data for all people related decisions to replace the still very common gut feeling – a huge area for improvement which is in a sorry state in many organizations.

Step 7:    Last but not least HR should take care how people do work together. That Communication and Collaboration are critical for business performance is nothing new – but still just a few companies actually excel in this discipline. HR as interdisciplinary function with interfaces to all departments is predestined to initiate improvements with its responsibility for organizational design as well as by assuming the role as caretaker for corporate culture and effective collaboration. Even if that does mean to be a restless fighter who should not give up too early.

As long as HR does not master the first three points, HR Managers will remain implementers but not active creators and designers. Eventually they are at risk to execute at the wrong end which does lead in turn to the poor reputation HR in many organizations does have. Behind the curtain there is an implicit perception “Those folks at HR simply do not understand us.” This could, by the way, one of the reasons why in so many organizations Chief HR Officer seats are preferentially taken by candidates out of the business instead of the HR organization. But this does not have to remain that way.

Depending on the maturity level of an HR organization, the change to become more entrepreneurial can be a longer journey. But taking a route along the 7 steps can be an expedition leading to the top – always demanding, sometimes dangerous and sometimes adversities such as sudden weather changes cannot be excluded. But if you made it, with the satisfying result to have got the “seat at the table” and even more important with the fulfilling look back what you have been able to accomplish together with your team.

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