Chinmay Sharma, head of human resources for the Hong Kong, Macau and Asia HQ at Philip Morris International, shares three tips on how HR can become both a problem solving and a strategic function.
Time and again all HR professionals (myself included) have debated about the appropriate role of the human resources function. Many companies view it as merely process-oriented, with little or no strategic impact.
Of course, HR leaders disagree with this perception and regularly seek ways to have a seat at the business table. In the quest to be viewed as more strategic and more important, a gap between HR’s aspirations and its actual role starts to persist.
I believe the gap arises from two inter-linked causes.
First, managers often think their key deliverable is to get financial results rather than to manage people.
Second, when managers neglect people management, the HR function worries about the organisation and tends to take upon managers’ responsibilities on their own shoulders.
On the surface, this seems to work with management moving away from areas it views as less important or uncomfortable. Simultaneously, the HR function fills in the gap, solves problems, and gains a false sense of importance in the process.
However, in the long term, this approach does more damage to the company as a whole.
In my career of more than 12 years with large MNCs, I have seen HR struggling with the balance of being a problem-solving function (or say operational) or a “proactive” strategic function, but I believe it’s possible to correct the balance without going too far on either side.
Getting more strategic and being efficient problem solvers often are two keys to success. However, as the HR function stands today, the balance seems to be tilted more towards being an efficient problem solver rather than being strategic.
I believe the journey towards a strategic function will require the following fundamental shift in how we operate as an HR function.
Business rationale a must
When business rationale for HR processes is lost and a race to copy so-called “best practices” starts, large organisations end up with a supersized human resource infrastructure in the form of multiple HR systems/forums, questionnaire overloads, multi-page templates, etc. All this results in an oversized HR department.
Time and again we have heard about global companies simplifying their performance review process, talent management tools, recruitment tools, etc, and the reason for doing it has been similar everywhere.
They all had an HR head with the insight to identify core business issues and the discipline to eliminate redundancies.
During my work experience so far, there was a specific case where HR, together with the CEO, charged its senior management team personally accountable for talent development of top professionals across the company. That required them to take a step back and assess the business’ most significant talent indicators, which turned out to be not available or poorly reflected in its HR information systems.
The company is now building an infrastructure to capture those results and make the “performers with potential” more visible. HR alone would not have been able to commit the company to new performance standards and gaining the resources to update its systems, but collaboration with the business gave the effort the required “teeth” to do so.
Talent advisors enabled with data analytics
It’s easy to say, “HR needs to enable and empower”.
But granting unlimited freedom to managers in making people decisions can generate inconsistencies, potential liability risks, and cost escalation.
Having the access and ability to generate data-oriented people insight, HR needs to enable managers with the right checks and balances.
High quality, timely information about talent pools and gaps that HR is uniquely positioned to provide is a significant competitive advantage in large corporations where talent can move smoothly across the globe.
HR can help with the critical connections, thus enabling line managers to seize opportunities. A strategic HR function also offers a perspective on emerging gaps. For example, a particular skill that becomes or is expected to become more critical to business can be prioritised both from a recruitment and development standpoint.
Research has proved time and again that the quality of leadership (not just the leader, but the next level) has a big impact on shareholder value, but the reality is that many leadership development efforts don’t achieve their goals.
This is mainly because they ignore the business context and offer insufficient or irrelevant solutions.
An assertive and strategic HR department clarifies objectives and expectations for leadership development across the company, provides a backbone of proven tools and methodologies, and calls out ways to adapt them to the needs of businesses and individuals.
Managers are expected to lead and HR must help them to do so. At all events, HR has the opportunities to assert its expertise and strategic thinking in a non-intrusive way.