HR is probably the only function that talks about ‘the business’ as if it’s something separate. Indeed, the concept of an HR business partner doesn’t help as we are part of the business, not a partner. HR needs to be connected to the business, but I observe many people in HR are still disconnected, taking an HR centric view of the world rather than focusing on the business as a whole.
Spotting the signs of disconnection
- Uninterested in the business, especially the numbers and the commercial realities.
- Never meet end customers, so lack understanding of what the business is about.
- Physically separated from the business, sitting in an HR bunker with their colleagues, so they don’t know what’s going on in the business.
- Provides solutions to problems that no-one knows they have, driving an HR agenda (often picked up from consultants or at conferences) that does not deal with the real business issues.
- Speaking a jargon-filled HR language (my favorite is ‘coterminous stakeholder engagement,’ which I believe means ‘talking to people’) that no one understands and creates a barrier of confusion and misunderstanding.
The impact on HR and the business
If HR is not involved in the strategy process the danger is key people and organizational issues are not taken into account and come back to haunt the business.
Everyone in HR is busy doing lots of HR stuff that fails to make a difference to the business. They are busy, busy, busy rather than focused on value creation. This results in HR lacking credibility and being seen as disconnected. HR is side-lined when important decisions are made and relegated to doing ‘HR stuff’ – contracts, disciplinaries, T&Cs etc.
The issue isn’t just about HR being disconnected from the business but the business being disconnected from the people and organizational issues that underpin the strategy. If HR is not involved in the strategy process, the danger is key people and organizational issues are not taken into account and come back to haunt the business.
Real life examples
When I am running an HR development program for commercial organizations, I am often helping people understand how to value a business so they could use this to understand what HR should focus on to create value. One of the participants told me this was ‘irrelevant to her role as an HR professional as she didn’t do calculations.’ This is what being disconnected from the business means.
Compare this to the response from a participant on another programme who said, ‘I took a value-based approach to three recent conversations and it changed the whole dynamic’. When I explored this, she had been asked to implement three unplanned headcount requisitions. In the past, she would have executed them, but based on her understanding of the operational free cash challenge the business faced she asked how the headcount contributed to meeting this challenge. In all three cases the business leader removed the requests. This is what being connected to the business means.
HR professionals should think of themselves as business people first and HR people second.
HR professionals should think of themselves as business people first and HR people second. Loyalty should be to shareholders, or in the case of the public sector or charitable organizations, a wider group of stakeholders, and not to HR. Be fascinated not only by business but by your business, reading about the challenges you face and the key macro-economic and demographic trends, bringing the outside in.
Spend more time on the numbers; the language of business is the language of finance. HR needs to speak this language. HR needs to understand how value is created for your stakeholders and know the answers to some key questions:
- What are the key financial challenges?
- In one sentence, what is your strategy?
- Who are your key stakeholders, and how will you serve them?
- What are the key financial statements, what are they for, and what do they tell you?
- Where can you save money?
- How can you and HR support these issues?
If you can’t answer them, then work with your finance buddies to understand them. HR needs to use this not to ‘justify what we do,’ as one HRD said, but to define and prioritize what we do.
What are the HRTech implications?
The danger is we look in the light, where we have the data, rather than in the dark, where the business questions lie.
The language of the business is the language of data. Data analytics can help HR connect to the business, but there is a specific version of disconnection which HR suffers from – Data Disconnection.
We tend to start with the data we have rather than with the business issue. We are fascinated by the latest bright shiny thing, and Big Data is in danger of becoming one. We are so fascinated by the allure of big data we start with the data we have collected (sickness and absence, training days, attrition, employee engagement, etc.) rather than key business issues (profit, innovation speed to market, productivity, etc.).
It’s a bit like the guy searching under a streetlight at night who says he’s looking for his car keys, which he dropped ‘over there’ in the dark, but he’s looking for them in the light where he can see. The danger is we look in the light, where we have the data, rather than in the dark, where the business questions lie.
This disease is made even worse when not only do we not connect the data to the business issue, but we only look at the data we have rather than connecting our data to data held in finance, operations, sales, risk, etc. It is the connections between data where the cure for DDD sits.