At big corporations, HR organisations frequently conjure up images of bureaucratic weight and paper pushing. As a matter of fact, even in today’s era, other functions speak differently about the so-called ‘non-technical department’ of Human Resources which historically has been tagged as a support function for long. Yet, many leaders still do not make the needed efforts and stand up for removing this tag which evidently creates hindrance amidst a progressive HR world of today.
Peter L. Allen, McKinsey alumnus, has been trying, with some success, to minimize the need for many traditional HR processes while transferring others to business leaders. Although it is easier to see how some of human-resource initiatives apply to startups, Allen’s experience shows that it is also possible to keep the right balance in large organisations without going too far. Getting more strategic and operating with an edge often are two keys to success.
One reason large organisations end up with a supersized HR infrastructure is that the business rationale for HR processes has been lost. But there is an antidote to massive HR systems, questionnaire overload, and multi page templates: stimulating a dialog about the underlying strategic purpose of those tools, a dialog that often helps management realize that they can be controlled and applied more effectively.
A global healthcare company, for example, realized that its performance review process gave it only a superficial understanding of who its high performers were and what feedback helped them to develop. It decided to deemphasize a time-honored nine-box calibration grid in its evaluation procedures and radically simplified employee reviews.
In the latter case, strategic leadership, who can come from outside HR, can also accomplish HR responsibilities. As an instance, an executive in a financial-services company with personally directing talent-review procedures for top professionals across the firm can achieve a strategic rational HR system, helping fill talent gaps and improve returns. This implies that HR might have had a difficult time, on its own, committing the company to new performance criteria and gaining the resources to update its systems, but collaboration with a major leader gave the effort teeth.
It is easy to say, “HR needs to let go and get out of the way,” but the pendulum can easily swing too far in the other direction: granting managers unlimited freedom in making HR decisions can generate too much variability, potential liability exposure, and cost creep. Moreover, when HR pulls back too far, it misses opportunities for using rigor and facts to gain predictive insights, whose potential is growing with big data and advanced analytics.
High-quality, timely information about talent pools and gaps represents a competitive advantage that HR is uniquely positioned to provide. HR should ensure that these critical connections get made and then help line managers seize opportunities. The best HR organisations also offer a perspective on emerging gaps.
Compliance efforts in areas such as labour and antidiscrimination obligations can easily make forms and layers of bureaucracy proliferate. But while an overly assertive HR department can constrain a smooth functioning of a business, companies are no better served by a “wallflower” department that misses red flags or neglects to enforce discipline. A rigorous HR function should track and interpret data and assert a point of view: “yes, we are doing well realizing internal goals or meeting industry benchmarks” or “no, we might begin to run off the rails.”
Many leadership development efforts do not achieve their goals, because they ignore the business context and offer insufficient opportunities for personal reflection and individualization. While it would be easy to conclude that corporate HR can add little value to leadership development, the reality is more complicated. An assertive HR department clarifies expectations for leadership development across a company, provides a baseline backbone of proven tools and methodologies, and flags priorities to adapt them to the needs of businesses and individuals. HR and business unit leaders then collaborate to fine-tune programs.
Managers must lead, and HR must help them to do so. But the well-founded inclination to swing the HR process pendulum away from bureaucracy and toward a freer hand for management should not lead organisations to veer from “ditch to ditch.” At all events, HR has opportunities to assert its expertise and strategic thinking in a low-profile, non intrusive way. That requires both rigor and restraint.