Rethinking the Role of HR

The future of the HR function is squarely in the crosshairs in a recent series of dueling blog posts at the Harvard Business Review. In my view, the spirited exchange is missing something very important.

Some quick context: The first shot, is from Ram Charan, who argues that HR should be split into an administrative function reporting to finance, and a strategic talent function reporting to the CEO.

David Ulrich addresses that argument by calling for a more “holistic” approach, where HR generalists working with business leaders, centers of expertise offering HR knowledge and insights, and HR service centers operate under a single umbrella.

Lastly, John Boudreau suggests that, instead of any of the above, HR should be “retooled” using analytics and financial, engineering and supply chain frameworks to optimize talent decisions.

The point that each seems to be missing, however, is what is needed to give HR the status it craves inside the organization. A key part of the answer lies in the fact that most senior HR leaders have never run a part of the business and been accountable for P&L.

Additionally, while many of their peers have held jobs in different functions such as marketing, operations, and finance, most HR leaders have not done so. For HR executives to have a bigger impact on the organization, they must have the credibility of their peers in the C-suite, regardless of how the HR function is organized or the metrics used to manage it.

So what is the answer? It’s not putting an unprepared but determined line manager into the top HR slot to “shake things up” or maintaining the senior HR role as something less than a full business partner.

In the short term, it is upskilling HR people in operations and finance so they have an appreciation of how the business works and how to discuss business decisions with insight. In the long term, it’s putting HR people into jobs in other functions early in their careers, and seeking out people in line management who are strongly inclined toward talent management and see this as how they can make their best contribution.

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