HR – Wherefore Art Thou?
(What every CEO needs to know)

By John Hendrie,
December 27, 2012

Human Resources was once thought to be a discipline of the future in the early 1990’s, when everything was so rosy and plentiful.  Then, we had the high tech implosion, terrorism attacks, two wars, a global economic melt-down and very slow rebuild.  Companies changed – contraction, downsizing, relo, outsourcing, acquisition at quite a pace.  Survival of the fittest, retrenchment, bunker mentality, just get me through the day.  Amidst this swirl of activity, Human Resources executives, those who survived, really just played catch-up.  Give me those warm bodies, direct lay-offs, take the unions on, push for the give-backs, give me more warm bodies, etc.  Not much of a role other than gatekeeper to bad news for employees.  The HR discipline was dissected, diminished and depressed. 

The face of HR has changed just as dramatically.  Once the purview of white males, females now make up at least 90% of HR leadership.  HR was once the true face of diversity, and companies took full advantage of their EEO profile - a female in HR, also perhaps in Sales/Marketing and Finance (the “soft” functions).  The rest of the leadership was still very white and male.  Take a look around you now.  EEO has taken a back seat.  So, while the diversity of the workforce has changed dramatically, leadership make-up has not.

There were several forces in the past that gave clout to the HR discipline.  Firstly, the laws of the land. Starting with EEO, followed by a slew of exhaustive   regulations, which only lawyers and HR really could digest and integrate into the operation.  Secondly, labor relations.  Dealing with organized labor was big business and big down side if not managed correctly.  There were also changes which diluted the HR presence.  Handling paper was easily dispatched through technology.  Various functions like payroll, benefits and training could now be outsourced.  The function became marginalized and smaller.

Even reporting changed.  Where once the CEO had a trusted advisor on the Executive Committee, the function, in many cases, now reported to the CFO, hardly an advantageous transition.  The reporting lines demonstrate the value of a discipline within an organization. This is the abridged evolution to date. HR needs to reassert itself or become a relic of principles past.

Organizations are foraging in unchartered waters now, mapping promising routes for their trade, seeking new markets, adapting to changing business climates, commanding a lean crew to uncertain futures.  They are beset with challenges unknown to date.  This environment invites people of vision and energy, those who are business savvy, projecting superb interpersonal and communication skills, audacious, innovative thinkers, who can help steer the organization on this journey. 

Hopefully, you are nodding your head at this point.

This functional “Helmsman” profile will need to exhibit a number of skills.  The focus will need to be one of value-added and criticality to the success of the business.  Incumbents must be visible and vocal, and, particularly, financially savvy.  They need to know the language of numbers and be familiar with the P&L and Budgeting process.  Their “toolbox” must include the ability to strategically address change, diversity of the workforce and globalization.  No small order here but required to remain relevant!
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About the Author:
John Hendrie, the consultant/owner of Hospitality Performance (www.hospitalityperformance.com), has taken a hard look at the HR discipline.  He knows it; he has worked it.  Now, he has formulated his thoughts and recommendations as a collaborative author in a new, must read E-book, called Good Book of Business.  He and other experts share their expertise on topics from marketing to finance to operations.  A must read for any businessman or woman!
http://www.freshrevenues.com/index.php?view=chapter15