Strategic Opportunities for the CHRO and HR Function

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Given the current business landscape organizations are required to operate within and challenges leaders are grappling with, I believe it is imperative that HR practitioners seize the day; carpe diem.

The question is, are we in the HR profession prepared to seize the day? What are the core competencies that will be required to seize the day?

A study conducted by McKinsey & Company in 2012 indicates that evidence suggests limited progress has been made to date regarding HR achieving and delivering tangible results. The study identified a number of contributing factors for the lack of progress relative to HR being more effective.

Let's discuss these factors individually and then let's see if they resonate with your experience.

The contributing factors identified include:

  • A lack of capability
  • A support function mindset
  • An inability to relate the ROI or business impact of their function

Lack of capability involved the ability of HR leaders to stand side-by-side with line managers, argue a point on a business issue, and carry the room.

The second issue speaks to the question of how we move HR from a support function mentality to being perceived as business leaders. I had a discussion recently with a respected vice-president of HR at a large company regarding this very issue. This individual argued that the reality is that HR is a support function.

I argued that the HR function no doubt provides supporting services; however, what I'm talking about is how are we perceived by key stakeholders such as individuals occupying the C-Suite. How do we position and carry ourselves? Are we perceived as drivers and enablers of business growth and success? Are we an integral component of the growth chain of our organization? Are we involved with helping to make strategic decisions impacting the enterprise, including driving the development of agile, resilient, creative, and innovative organizational leaders, and reimagining and building the future of the business? In short, are we perceived as business leaders first and HR leaders second, or are we primarily involved with strategy implementation and serving in a maintenance function?

The third contributing factor identified was an inability to relate the ROI, Return On Investment, or business impact of the HR function; this speaks to the need to have business knowledge and acumen. Not only do we need to be able to understand business, but also we need to speak the language of business.

As you well know, HR practitioners are involved with both transactional type activities - I like to refer to these activities as keeping the lights on and keeping the train running - as well as strategic or value added type activities. The McKinsey study indicated that according to business leaders, the HR function is more effective at handling transactional activities.

Assuming that these findings are accurate, why do you think that would be the case? Could it be related to the issues of a lack of capability, possessing a support function mindset, or an inability to relate the ROI or business impact of our function?

I argue that the best way for HR practitioners to address these criticisms is for our profession to continue to transform from being viewed as an HR leader to that of a business leader with functional expertise in Human Capital Management.

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Key Concepts from this Video:

Carpe Diem, Lack of Capability, Support Function Mindset, Business Impact

Self Check

The report by McKinsey & Company revealed several factors that may be impeding HR practitioners’ success with operating in the new business landscape. What were they? (Check all that apply)