The basic premise of my argument is that, in attempting to win credibility, HR has proposed and implemented copy-cat best practice as a low-risk route to delivering HR strategy. This low risk approach has back fired because what boards actually need are innovative approaches to supporting their people agendas in what is a complex, rapidly changing, people-centric, business environment. What they need are HR strategies that push the boundaries and truly reflect the needs of the business, now and in the unknown future. This latter approach naturally carries risk.
In observing the uniform nature of HR, as seen in its application in so many of our organisations, I’ve actually begun to speculate whether HR is so far along the risk averse spectrum that it has moved into risk avoidance. Rather than accept and mitigate risk as a natural consequence of developing innovative, best fit HR strategy, this risk avoidance is leading to a ever-narrowing list of ‘same as’ practices in the majority of our organisations. This is worrying given HR is a profession that should be focused on evolving, complex human systems.
I’m not alone in this thinking. The UK’s Chartered Institute of Personnel and Development recently called upon the profession to move away from a fixation with process and become more “insight driven”, combining the “three savvies” of “organisation, business and context” (CIPD, 2011).
My conversations with other OD professionals, FD’s, MD’s and CEO’s, also reveals a similar frustration with their HR partners. Those HRD’s I consider to be closer to the business than their contemporaries, express frustration at the profession continuing to bemoan a lack of credibility at the board room table, whilst continuing to create ‘same-as’ policy and practice.
The overall sentiment seems to be that HR is playing it safe. They are simply not bringing enough challenge and risk to the board room table.
It isn’t just the HR functions of our larger organisations that are stuck in this pattern of behaviour. Newly appointed HR managers in SME’s are very likely to emulate what they see or have experienced in larger organisations. This is where the innovation and creativity is possibly easier to nurture and is needed even more to keep growing costs under control and ensure the talent base is fit for purpose.
Often, ‘sophisticated’ HR practices are implemented in growing SME’s that simply miss the point. They fail to address the classic and well-documented issues seen in growing entrepreneurial businesses. Enthusiastic, but under-developed employees continue to be promoted beyond their capability. Growing bureaucracy stifles nimble decision-making, and process adherence replaces dialogue. All this still goes on despite, and sometimes because of, the presence of so-called, best practice HR interventions.
As stated in my opening paragraph, my thinking has led me to question whether there is a link between this unquestioning adoption of best practice and HR’s desire to be taken seriously in the board room. In an attempt to be seen as adding strategic value, the recommendation and implementation of “proven best practice”, with little (immediately apparent) associated risk, might seem a wise move. In practice, playing it safe leads to inappropriate solutions and a focus on process and behaviour control, at the expense of the bigger prize.
In my experience, being taken seriously in the board room has more to do with bringing commercial experience, innovation and creativity to the strategic conversation. It’s also about being involved in problem solving complex operational challenges, particularly in the area of senior talent and the difficult decisions this often throws up. It is also about holding up the spot light to cultural blind spots and helping keep the leadership team true to the organisation’s values. This reflects the CIPD’s call for HRD’s to become more “savvy” in the areas of business, organisation and context, as already mentioned.
For me, credibility in the board room is not commensurate with praise for the HR policies and practices seen in the business. It is commensurate with the degree to which the CEO and FD defer to and confer with the HRD on strategic and operational decisions. Hesketh and Hird (2009) refer to the “golden triangle” made up of CEO, FD and HRD working as a close-knit team. In this triangle of trust the HRD adds significant value to the development of business strategy and day to day operational decision-making.
In a reversal of what we see in many HR/board relationships, where best practice is rolled out in an attempt to gain credibility, the business-savvy HRD, first gains credibility through strategic, value-add dialogue. With trust earned and credibility bestowed, the HRD then gains access to the business insight and stakeholder support needed to create an HR strategy that is innovative, creative and truly best fit.
In future posts I’ll discuss other possible contributors to HR’s credibility gap. The first of these is the level of accountability for HR practice that has been taken off managers and into the HR function. The second is whether we are developing HR professionals too much through HR-related case study (the breeding ground for best practice) and not enough through the principles of systems thinking, human psychology and business economics.
These discussions will then lead me to speculate how OD (its practitioners and principles) can support HR in plugging the credibility gap, including a view on where the delivery of OD practice actually resides in our organisations.