Don't split HR

Do Not Split HR –At Least Not Ram Charan’s Way

by Dave Ulrich | 9:00 AM July 30, 2014

Ram Charan’s recent column ―It’s Time to Split HR‖ has created quite a stir. He argues that it’s the rare CHRO who can serve as a strategic leader for the CEO and also manage the internal concerns of the organization. Most CHROs, he says, can’t ―relate HR to real-world business needs. They don’t know how key decisions are made, and they have great dif ficulty analyzing why people—or whole parts of the organization—aren’t meeting the business’s performance goals.―

While I have enormous respect for Ram’s wisdom, I believe CHROs have much to offer CEOs and can be better prepared to do so without splitting HR.

Much of Charan’s recent work has tilted towards organization and people (books on strategy execution, leadership pipeline, talent and advice on intensity, change, leadership traits, performance management, governance). I believe that Charan’s perspecti ve reflects an increasing emphasis among business leaders on the organizational capabilities required to win. Charan has turned his attention to these organization dynamics in response to CEOs recognizing that technology, operations, access to financial capital, and even strategic positioning statements are less differentiating than their organization’s ability to respond to opportunities. As business leaders demand more of their organization, they look for counsel to create more competitive organizations, thus raising the bar on HR. Charan’s latest column actually affirms the value of HR to sustained competitiveness.

More is now expected of HR professionals. Charan (intentionally or not) lambasts the entire

HR profession (―It’s time to say good bye to the D epartment of Human Resources”). This is both unfair and simplistic. It ignores what I call the 20-60-20 rule. In HR (or finance or IT), 20% of the professionals are exceptional, adding value that helps organizations move forward, 20% of HR folks are locked into a fixed mindset and lack either competence or commitment to deliver real value, and 60% are in the middle. It is easy and fair to critique the bottom 20%, but it is not fair to paint the entire profession with this same brush. I tend not to focus on either 20%. The top 20% are e xceptional and don’t need help. They should be role models for others. Charan noted a few of these folks in his column. The bottom 20% won’t take help. But, the 60% seem, in my view, to be actively engaged in learning how to help their organizations improve. Sometimes they are stymied by their own lack of ability, but I find that often they are also limited by senior leaders who don’t appreciate the value they offer. I advocate teaching the 60% what they can do to deliver value even in difficult circumstances (working with non-supportive leaders or in difficult markets, for example).

As HR professionals engage with business leaders to deliver value, the conversation should

not just be about talent. The top 20% today (and I hope more of the 60% tomorrow) focus on three things: talent, leadership, and capability, along with their attributes: