HR Grapevine
HR Grapevine | Executive Grapevine International Ltd

HR On Top

Markets, organisations, the economy – they’re all changing at a quick speed and in a massive way. Is HR ready to step-up and become a business-leading function?
HR On Top
 

Markets, organisations, the economy – they’re all changing at a quick speed and in a massive way. Is HR ready to step-up and become a business-leading function?

The business landscape, in both a domestic and global sense, is in flux. In a recent video for the CIPD, Peter Cheese, CEO of the UK’s largest HR body, noted this. Speaking after the Brexit referendum, he explained that these are “very uncertain times, politically and economically.”

Another HR leader spoke to HR Grapevine to note that the challenges of “automation, AI and continuous business change,” have created a volatile operating environment. This upheaval, explains Ryan Cheyne, People Director at Booking.com, has created multiple, novel demands on the people function including: the need to scramble for top talent; problems regarding technology implementation as well as issues around employee retention and needing to maintain operational relevance. “You have to…keep business relevant with times changing so quickly or you’ll become outdated,” he adds.

It’s during times like this that we (HR) really need to support our organisations,

 

Aside from grappling with these macro-sized problems – both internal to the business and external too, such as wider economic, societal and political shifts – as well as needing to show continued value, does such a moment present an opportunity to be grasped for the people function? 

From supporter to leader

“It’s during times like this that we [HR] really need to support our organisations,” Cheese says. The idea being that through better support, HR can become more business critical. A recent LACE Partners study, which polled HR leaders on the function’s capability, corroborates the CIPD boss’ words, taking the idea of being increasingly supportive one step further. According to its HR on the Offensive study, if the function overhauled itself – to become more business relevant, strategic, porous, ROI-driven and performance-minded – it could become critical to the organisation’s success because leaders increasingly see winning, in a commercial sense, as driven by facets which HR is close to. Talent management, the employee experience and diversity to name but a few. In many ways, making the function less supportive and more leading.

With the study concluding that, “HR needs to be a change leader, spikier and bolder in its approach,” there is a question to be asked about what the outcome of this potential evolution could mean for HR. If the function has, or could acquire, these ‘spikier’ and ‘bolder’ business attributes, at this described moment whereby everything is changing, could it become a central, if not leading, business function. 

To find out if HR was ready to rise to the top, HR Grapevine spoke to a roster of HR honchos and experts in order to assess where functions capabilities are, what stands in its way, and what needs to change if it is to come out on top. Read what they thought they key issues were below.

 

 

HR is evolving but it’s not there yet

Kevin Green, ex-CEO of the Recruitment and Employment Confederation (REC) and former HR Director at Royal Mail, was intimately involved in the HR on the Offensive study. His view is that although HR has evolved from beginnings of paper pushing and bureaucratic oversight, it’s not yet business leading. “HR is better than it was but it’s still not good enough,” he says. As Green sees it, whilst the leaders of the people function are increasingly business savvy, core HR activities haven’t changed to meet this understanding of where the function needs to go. “We need to do fewer things and better things. Whilst HR directors are much stronger [at understanding the business’ needs], the rest of the profession lags behind.”

A lot of the activity HR is lumped with could be because of how it is perceived. “Historically, HR has always been a support function and that is the essence of a lot of the activity that it does,” Cheese explains, though he believes it can change. “It has the capability to be a leadership function but we have to be honest and say there needs to be a step up.” With one description of HR as a, “jack of all trades but master of none,” a common perception of HR as an auxiliary function, reactive to operational need from other parts of the business, has largely stuck.

 

As a result, HR leaders describe the function’s workload as increasing, leaving less time for strategic thinking. “The really common description of HR as an organisational support function,” adds Janet Dalziell, Director of People and Culture at Greenpeace International, “means that a battle I have internally is to [make other functions realise] HR is a lot more than that. It can be an organisational capability function, too”.

With studies such as Deloitte’s 2019 Global Human Capital Trends, amongst others, noting the business benefit of strategic thinking around issues that HR usually owns – including the employee experience of work, wellbeing and productivity – there is clear opportunity to become an ‘organisational capability function’. In fact, when one HR leader applied design thinking to their company, resulting in an employee treatment aligning with that of customers, a global leadership role was created for them.

The really common description of HR is of an organisational support function...

Try and outline the benefits of why the function is there and what it can do for the business

 

Stop being compliant

“When HR is working well, as opposed to when it is not at all, it thinks well beyond HR systems, processes and legal context and into what, really deeply, the organisation and culture needs to be successful,” explains Dalziell. Green adds that HR can often be seen as, “the compliance police” and a business inhibiting function. “Whilst that will help keep employers out of employment tribunals, it’s not value adding,” he says. 

Instead, both Green and Dalziell believe that HR needs to question the value of some of the processes it handles. “It can be a constant battle against the demands of compliance,” Greenpeace’s People Director says. Zoe Walters, People Director, Condé Nast International suggests that as some parts of the business do see HR as a block, the function needs to show it offers operational value. “Try and outline the benefits of why the function is there and what it can do for the business,” she adds.

 

 
 

Is this HR’s tipping point?

According to recent LACE Partners study HR on the Offensive,
HR needs to improve its ‘mindset’ in these areas:

 

• Organisational design

• Leadership

• Change management

• Data management

• Marketing

• Digital and technological change

 

 
 

 

“In fact,” explains Ewen MacPherson, People Director at Havas Media Group, “HR’s biggest strength is that it is one of a very few functions – sometimes the only function – that has a truly lateral view of the business. This should allow HR to operate proactively. For example, if you know a big change is coming.”

Taking MacPherson’s statement a step further, one school of thought believes that HR, as a function, could split into two distinct operations: a business partnership function and a centre of excellence. The former would support day-to-day operation issues whilst the latter could provide strategic leadership. Yet, the general consensus from HR directors polled for HR on the Offensive study was that if the function was to split then the leadership part, the centre of excellence, would need to remove its historic predilection for risk management, emphasising consultative and diagnostic capabilities instead. However, this would require an entirely new set of people capabilities.

 

We don’t get the best business people in the HR function and that’s a disaster

 

HR needs less HR people

Whilst Green recognises that HR has, “lots of really nice people,” he thinks for HR to become leading it needs more business brains. He believes that, “we don’t get the best business people in the HR function and that,’s a disaster”; adding that if HR could attract more of the more of the most ambitious people it could end up being a leading business function. “If we get the brightest and best people into HR then we get more of an opportunity to develop people that want to be business leaders.”

 

Taking the lead with tech

One of the areas that most HR leaders believe the function has to get better at is attracting tech skills. Not only for the operational services it needs to provide for the business but also for the consultative and strategic roles it should play – such as understanding leading organisational transformation, long-term direction planning and change management.

Yet, Booking.com's Cheyne explains: “Trying to find people, particularly with technology skills, is difficult – and then you have to focus on retaining them. In the technology [area] plugging the skills gap seems like a huge thing, it’s a skills canyon.” However, Amrick Marahta, Global Director of HR Technology & Innovation at Colt Technology Services, believes if HR can get these skills it can take a leading role in the inarguable transformations it’s going through.

“For HR, our role is to innovate and support organisations with the digital transformation of people, processes, and systems, ensuring a supply of talent from evolving and complex talent markets,” he adds.

If HR can get a handle on the advent of tech, this leading role will be secure, explains Pascale Goy, Head of Learning & Development at CERN. “As we are going towards digitalisation, we will always need HR to be part of the leadership of an organisation. I sincerely believe we will always need HR. You may have lots of [technological-led] processes for [general HR processes] but at the end of the day people want to talk to people.”

And, the business will also need solutions. “Establishing integrated, best-fit solutions in this complex, rapidly evolving paradigm is the challenge which will determine the pace in which HR can grow and add value,” Marahta concludes.

 

To do this, the ex-Royal Mail HRD believes that HR needs to change how it attracts talent to the function. It might be about creating hard lines about how career paths to the top work – such as stipulating that you can only become a Chief Executive if you have spent some time in HR – but it could also be about the way the function advertises itself to new talent, ensuring that there’s not too much focus on the process and policy aspects of the role.

This means building a function that has core business understanding, adds Cheese. “Traditionally, HR is expert at people, behaviour, team dynamics and organisational but we need to…understanding how the numbers work, how to build business cases as well as understanding the values of outcomes.” The subtext being: it either needs to get this talent into the function or start developing people with these skills.

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Some of the big HR directors, is they’ll never be given a big leadership job because they’ve done nothing other than HR

 

Get out more and invite others in

One way in which HR can get better exposure within the organisation, Condé Nast International’s Walters adds, is by spending time in other functions of the business – looking at how even the most junior people carry out their roles. “That to me is a way to understand the business better, to understand needs better,” she adds. “It then allows me to go to the leader of that team or function and explain I’ve taken the time to do due diligence to understand things that might impact organisational design or talent strategy.”

Green agrees, adding that getting out could spark HR into becoming a business leader. “The problem with HR, if you look at some of the big HR directors, is they’ll never be given a big leadership job because they’ve done nothing other than HR. If they had spent two years in a sales function or some time in operations then it would be possible to say they’re a well-rounded business leader. We need a more open and porous talent pipeline in HR,” he concludes. 

This also correlates with the thinking of CIPD’s CEO. “There needs to be more fungibility between HR and the rest of the business. HR has often sat in a siloed manner and it needs to develop a stronger connection with the business itself,” Cheese says. “The strongest HR practitioners are the ones that have come from a non-traditional HR background, anyway," Macpherson adds.

 

 

Become business, speak business – and don’t get kicked out the party

If HR is to become a leading function then it can’t, “just speak in HR jargon,” says Walters. Cheese claims that a lot of business leaders struggle to figure out what HR does, especially when it comes to the strategic value it offers. “We need to educate leaders on why HR needs to be part of the leadership of the organisation. We need more of meeting in the middle,” he adds. 

Crucially, and perhaps because of HR’s past as a more servile function, Walters adds that it’s best to not overstep the mark too early. She says as HR hasn’t often been at “the party” - her metaphor for strategic business conversations - it can ensure it gets invited back by observing, ensuring it knows how to conduct itself at the top level, and then figuring out how to add value. “You’re observing them, you’re getting to know people, and then you’ll get a sense of whether you’ll be invited back. You don’t go to the party and get blazingly drunk or wind people up. You have to communicate in a way that gets the business interested in HR,” she says. Booking.com’s Cheyne agrees: “It’s all about relationships. If you’re an HR leader that is good at influencing the business and colleagues [elsewhere in the business] strong and effective links are essential.”

 

 

 

Strategy, strategy, strategy

For a whole host of reasons, HR is not, currently, considered a driver of business strategy and a key part of improving competitiveness. Yet, on this changeable landscape there is definite opportunity for this to change explains Marahta. “Establishing integrated, best-fit solutions in this complex, rapidly evolving paradigm is the challenge which will determine the pace in which HR can grow and add value,” he says.

Ann Pickering, CHRO and Chief of Staff at O2, adds: "For me it’s essential that HR people are business people first, demonstrating a strong understanding of their business. It’s also vital that HR drives direction, helping the business set the tone with the behaviours and mindsets its leaders need to demonstrate in order for the business to be successful."

There are clear examples where HR has stepped up and was considered to add value. At Apple, Deirdre O’Brien, Vice President of People recently expanded her role to Vice President of People and Retail. In keeping with contemporary executive-level understand around what drives business success, a press release at the time detailed how her role will work to improve partnership with the business. At the time of her early 2019 appointment Tim Cook, the technology giant’s CEO, noted that the business’ soul is its people, highlighting how important the £163billion firm believes HR is.

 

Establishing integrated, best-fit solutions in this complex, rapidly evolving paradigm is the challenge which will determine the pace in which HR can grow and add value

 

Does HR model leadership?

There are very few examples of HR leads who went on to become CEOs. “If we asked how many HR directors want to be CEOs,” says Green, “I think it would be a low percentage and I think that’s an issue in itself. We get loads of nice people, and lots of pleasant people but we don’t end up with the best business brains.”

In fact, there are very few examples where an HR lead has ended up sat in the most senior position in the company. A 2013 UK study, by Mullwood Partnership, found that almost two-thirds of HR directors harboured ambitions of becoming CEO yet only five per cent reach this heady level.

The risk to the HR function is that, because of this slim chance of becoming CEO, many of the most ambitious and business savvy jump into other business functions to fulfil their professional ambitions. A quarter of respondents said this.

For those that made it to the top, there were a few traits that, the study concludes, they all had: accountability; the desire to lead and business acumen. However, the perception of HR was also seen as a contributing factor to few HRDs getting the top job. It is perceived that they don’t have the desire or confidence for the role.

HR Directors who became CEOs

  • Mary Barra, CEO at General Motors

    Headed up the global HR function at the famous manufacturer before taking over product development and then taking the top seat.

  • Nigel Travis, CEO at Dunkin’ Brands & Papa Johns

    Spent 20 years working in HR before stepping up to become COO at Blockbuster and then CEO at two globally-renowned brands.

  • Anne Mulcahy, CEO at Xerox

    Started off in sales at the document services firm before working in HR and heading up staffing.

  • Bernard Fontana, CEO at Framatome

    With a truly global career, the French executive worked in HR at AreclorMittal before taking the top job at several firms.

  • Kevin Green, CEO at The REC

    Green founded his own business before taking a top HR role before he ended up as the highest-ranking executive at the well-known UK recruitment body.

 

If we don’t step up and show that we can do this stuff at the most strategic level of the business, someone else will come along and do it for us

However, not all businesses are at the same stage as Apple – in either HR capability or how the business views the importance of talent management by the people function. Elsewhere, Cheese explains there needs to be a, “strategic step-up.” Whether this means speaking the right language or obtaining the right strategic capabilities. He adds: “If we don’t step up and show that we can do this stuff at the most strategic level of the business, someone else will come along and do it for us because the reality is it needs to be done.” 

According to Cheese, with businesses now, “seeing the absolutely critical importance of their people,” and not just taking “the financial view” then HR can fill this strategic space as “we are the people profession and we understand that space”. However, Cheese is adamant that this strategic capability would have to be in the context of the business which would mean understanding the business and becoming more open to the changeable landscape they operate on. “None of the challenges that HR currently faces are HR challenges,” MacPherson adds: “They’re general business challenges. [What HR needs to do] is help lead the way to understanding how we balance operational needs of a business in a traditional world with the non-traditional outlook people are moving to.”

 

 

Is the people function ready to step-up?

Business thinking, as a result of macro-sized challenges, is changing. Key studies by Josh Bersin, MIT, McKinsey, Deloitte, PwC, LACE Partners and Harvard Business School all note how organisational success and market advantage are correlated with areas that HR has an advantage in, and ownership over, including: the employee experience; diversity and inclusion and communication.

However, unless it uses this advantage sagely – communicating how integral thinking around these issues is crucial to the business; as well as how HR can offer consultative and strategic guidance to the business leadership on these issues - then the HR leaders that HR Grapevine spoke to don’t believe the step up can be made.

Yet, the LACE Partners study concluded that if HR could communicate a clear purpose, split the function between consultative and service provision, hire a different profile of person into the function, be far less siloed and only engage in activities with a clear ROI, as well as offering top-notch people management, then it could get ahead.

We’ve (the HR function) never sat back. If it’s good times, bad times or indifferent times, we’ve always been a strong function in our brand

 

Thank goodness for HR

HR can often be a side dish to the inevitable main course of any organisation: the business strategy. However, at TGI Friday’s UK the people team plays a central role in strategising. Jacqui McManus, Culture and People Development Director at the 60-branch restaurant chain, describes that “as everything in the business is developed through our people, HR is entwined in business strategy.”

McManus, who has been in the business since 2008, describes Friday’s ‘people agenda’ as always being first or second on the organisation’s business menu. “We’ve [the HR function] never sat back. If it’s good times, bad times or indifferent times, we’ve always been a strong function in our brand.”

In practise, this means McManus, as HR’s representative on the executive team, is part of annual strategy discussions; in order to ensure she understands what direction the business wants to go in and how the people strategy aligns to it.

It is up to McManus, as HR lead, alongside the Chief Strategy Officer, to plan how the US-founded business can develop their brand and “engage the team so that is delivered on.”

At a recent industry awards, the panel lauded this “people-led strategy”. With Friday’s staff retention standing at almost double current levels for hospitality businesses, including a 95% retention rate for managers in training, as well a modest growth in turnover – in what is undeniably a difficult sector to operate in – it appears the close alignment between HR and business is paying dividends.

McManus adds it has helped that the most senior leader at TGI Friday’s, Karen Forrester, the incumbent CEO who joined as Managing Director in 2007, is the business’ biggest advocate for an approach where HR takes is a key ingredient of the business strategy. “It was her belief at the start. [At Friday’s] the CEO is the voice behind the culture and she delivers everyday what we stand for.”

 

You wouldn’t expect me to say anything else in my role, but, of course, HR can lead

Whilst there is no one-size-fits-all approach to HR ‘getting ahead’, there are some things it could start off doing – including showcasing what it does for the business – which are crucial at this volatile business moment. “At this moment [of change], HR can really be the lynchpin to stabilise and give assurance,” Walters explains.

That's not the only advice out there. The HR leaders that HR Grapevine spoke to had a range of ideas about how HR can come out on top: “Be forward-looking and long-term looking,” adds Dalziell. “Mediate well,” says Walters.  For Green, it’s about only engaging in activities if they offer greater business and customer value, or better efficiencies. For Marahta, it’s about being the best function for solutions provision. And, for Cheese it’s about being able to showcase its business worth.

However, even if HR did get a handle on all of the above, due to the change of pace, the political, technological and economic turbulence, it wouldn’t guarantee anything. As Greenpeace’s Director of People pointed out: all other functions are out to get ahead too; are grappling with these issues and are attempting to show leadership. Yet, according to CIPD’s honcho, this shouldn’t discount HR from the race to the top. At the very least, by attempting to improve on its core services and add other activities to its roster, the service HR provides would, surely, improve. “You wouldn’t expect me to say anything else in my role,” adds Cheese, “but, of course, HR can lead.”

 

The business landscape, in both a domestic and global sense, is in flux. In a recent video for the CIPD, Peter Cheese, CEO of the UK’s largest HR body, explains that these are “very uncertain times, politically and economically.”

Another HR leader spoke to HR Grapevine to note that the challenges of “automation, AI and continuous business change,” have created a volatile operating environment. This upheaval, explains Ryan Cheyne, People Director at Booking.com, has created multiple, novel demands on the people function including: the need to scramble for top talent; problems regarding technology implementation as well as issues around employee retention and needing to maintain operational relevance. “You have to…keep business relevant with times changing so quickly or you’ll become outdated,” Cheyne adds.

Aside from grappling with this apparent perfect storm of problems – both internal to the business and external too, such as wider economic, societal and political shifts – as well as needing to show continued value, does such a moment present an opportunity to be grasped for the people function? 

“It’s during times like this that we [HR] really need to support our organisations,” Cheese says. A recent LACE Partners study, which polled HR leaders on the function’s capability, corroborates the CIPD boss’ words, taking the idea of being increasingly supportive one step further. According to its HR on the Offensive study, if the function overhauled itself – to become more business relevant, strategic, porous, ROI-driven and performance-minded – it could become critical to the organisation’s success because leaders increasingly see winning, in a commercial sense, as driven by facets which HR is close to. Talent management, the employee experience and diversity to name but a few.

With the study concluding that, “HR needs to be a change leader, spikier and bolder in its approach,” there is a question to be asked about what the outcome of this potential evolution could mean for HR. If the function has, or could acquire, these ‘spikier’ and ‘bolder’ business attributes, at this described moment whereby everything is changing, could it become a central, if not leading, business function.

To find out if HR was ready to rise to the top, HR Grapevine spoke to a roster of HR honchos and experts in order to assess where functions capabilities are, what stands in its way, and what needs to change if it is to come out on top. Read what they thought they key issues were below.

HR is evolving but it’s not there yet

Kevin Green, ex-CEO of the Recruitment and Employment Confederation (REC) and former HR Director at Royal Mail, was intimately involved in the HR on the Offensive study. His view is that although HR has evolved from beginnings of paper pushing and bureaucratic oversight, it’s not yet business leading. “HR is better than it was but it’s still not good enough,” he says. As Green sees it, whilst the leaders of the people function are increasingly business savvy, core HR activities haven’t changed to meet this understanding of where the function needs to go. “We need to do fewer things and better things. Whilst HR directors are much stronger [at understanding the business’ needs], the rest of the profession lags behind.”

A lot of the activity HR is lumped with could be because of how it is perceived. “Historically, HR has always been a support function and that is the essence of a lot of the activity that it does,” Cheese explains, though he believes it can change. “It has the capability to be a leadership function but we have to be honest and say there needs to be a step up.” With one description of HR as a, “jack of all trades but master of none,” a common perception of HR as an auxiliary function, reactive to operational need from other parts of the business, has largely stuck.

As a result, HR leaders describe the function’s workload as increasing, leaving less time for strategic thinking. “The really common description of HR as an organisational support function,” adds Janet Dalziell, Director of People and Culture at Greenpeace International, “means that a battle I have internally is to [make other functions realise] HR is a lot more than that. It can be an organisational capability function, too”.

With studies such as Deloitte’s 2019 Global Human Capital Trends, amongst others, noting the business benefit of strategic thinking around issues that HR usually owns – including the employee experience of work, wellbeing and productivity – there is clear opportunity to become an ‘organisational capability function’. In fact, when one HR leader applied design thinking to their company, resulting in an employee treatment aligning with that of customers, a global leadership role was created for them.

Stop being compliant

“When HR is working well, as opposed to when it is not at all, is when it thinks well beyond HR systems, processes and legal context and into what, really deeply, the organisation and culture needs to be successful,” explains Dalziell. Green adds that HR can often be seen as, “the compliance police” and a business inhibiting function. “Whilst that will help keep employers out of employment tribunals, it’s not value adding,” he says. 

Instead, both Green and Dalziell believe that HR needs to question the value of some of the processes it handles. “It can be a constant battle against the demands of compliance,” Greenpeace’s People Director says. Zoe Walters, People Director, Condé Nast International suggests that as some parts of the business do see HR as a block, the function needs to show it offers operational value. “Try and outline the benefits of why the function is there and what it can do for the business,” she adds.

Is this HR’s tipping point?

According to recent LACE Partners study HR on the Offensive,
HR needs to improve its ‘mindset’ in these areas:

• Organisational design

• Leadership

• Change management

• Data management

• Marketing

• Digital and technological change

“In fact,” explains Ewen MacPherson, People Director at Havas Media Group, “HR’s biggest strength is that it is one of a very few functions – sometimes the only function – that has a truly lateral view of the business. This should allow HR to operate proactively. For example, if you know a big change is coming.”

Taking MacPherson’s statement a step further, one school of thought believes that HR, as a function, could split into two distinct operations: a business partnership function and a centre of excellence. The former would support day-to-day operation issues whilst the latter could provide strategic leadership. Yet, the general consensus from HR directors polled for HR on the Offensive study was that if the function was to split then the leadership part, the centre of excellence, would need to remove its historic predilection for risk management, emphasising consultative and diagnostic capabilities instead. However, this would require an entirely new set of people capabilities.

HR needs less HR people

Whilst Green recognises that HR has, “lots of really nice people,” he thinks for HR to become leading it needs more business brains. He believes that, “we don’t get the best business people in the HR function and that,’s a disaster”; adding that if HR could attract more of the more of the most ambitious people it could end up being a leading business function. “If we get the brightest and best people into HR then we get more of an opportunity to develop people that want to be business leaders.”

To do this, the ex-Royal Mail HRD believes that HR needs to change how it attracts talent to the function. It might be about creating hard lines about career paths to the top – such as stipulating that you can only become a Chief Executive if you have spent some time in HR – but it could also be about the way the function advertises itself to new talent, ensuring that there’s not too much focus on the process and policy aspects of the role.

This means building a function that has core business understanding, adds Cheese. “Traditionally, HR is expert at people, behaviour, team dynamics and organisational but we need to…understanding how the numbers work, how to build business cases as well as understanding the values of outcomes.” The subtext being: it either needs to get these people in or start developing, or giving exposure to, the skills these functions has.

Taking the lead with tech

One of the areas that most HR leaders believe the function has to get better at is attracting tech skills. Not only for the operational service it needs to be able to help the business but also for consultative and strategic roles it should play – such as understanding leading organisational transformation, long-term direction planning and change management.

“Yet,” explains Booking.com’s Cheyne. “Trying to find people, particularly with technology skills, is difficult – and then you have to focus on retaining them. In the technology [area] plugging the skills gap seems like a huge thing, it’s a skills canyon.” However, Amrick Marahta, Global Director of HR Technology & Innovation at Colt Technology Services, believes if HR can get these skills it can take a leading role in the inarguable transformations it’s going through.

“For HR, our role is to innovate and support organisations with the digital transformation of people, processes, and systems, ensuring a supply of talent from evolving and complex talent markets,” he adds.

If HR can get a handle on the advent of tech, this leading role will be secure, explains Pascale Goy, Head of Learning & Development at CERN. “As we are going towards digitalisation, we will always need HR to be part of the leadership of an organisation. I sincerely believe we will always need HR. You may have lots of [technological-led] processes for [general HR processes] but at the end of the day people want to talk to people.”

And, the business will also need solutions. “Establishing integrated, best-fit solutions in this complex, rapidly evolving paradigm is the challenge which will determine the pace in which HR can grow and add value,” Marahta concludes.

Get out more and invite others in

One way in which HR can get better exposure within the organisation, Condé Nast International’s Walters adds, is by spending time in other functions of the business – looking at how even the most junior people carry out their roles. “That to me is a way to understand the business better, to understand needs better,” she adds. “It then allows me to go to the leader of that team or function and explain I’ve taken the time to do due diligence to understand things that might impact organisational design or talent strategy.” Walters is adamant HR needs to do this. “If you haven’t got time to learn about your business you haven’t got time for people.”

Green agrees, adding that getting out could spark HR into becoming a business leader. “The problem with HR, if you look at some of the big HR directors, is they’ll never be given a big leadership job because they’ve done nothing other than HR. If they had spent two years in a sales function or some time in operations then it would be possible to say they’re a well-rounded business leader. We need a more open and porous talent pipeline in HR,” he concludes. 

This also correlates with the thinking of CIPD’s CEO. “There needs to be more fungibility between HR and the rest of the business. HR has often sat in a siloed manner and it needs to develop a stronger connection with the business itself,” Cheese says. Macpherson reveals: “The strongest HR practitioners are the ones that have come from a non-traditional HR background, anyway.”

Become business, speak business – and don’t get kicked out the party

If HR is to become a leading function then it can’t, “just speak in HR jargon,” says Walters. Cheese claims that a lot of business leaders struggle to figure out what HR does, especially when it comes to the strategic value it offers. “We need to educate leaders on why HR needs to be part of the leadership of the organisation. We need more of meeting in the middle,” he adds. 

Crucially, and perhaps because of HR’s past as a more servile function, Walters adds that it’s best to not overstep the mark too early. She says as HR hasn’t often been at “the party”, for example part of the top business discussions, it can ensure it gets invited back by observing, ensuring it knows how to conduct itself at the top level and then figuring out how to add value. “You’re observing them, you’re getting to know people, and then you’ll get a sense of whether you’ll be invited back. You don’t go to the party and get blazingly drunk or wind people up. You have to communicate in a way that gets the business interested in HR,” she says. Booking.com’s Cheyne agrees: “It’s all about relationships. If you’re an HR leader that is good at influencing the business and colleagues [elsewhere in the business] strong and effective links are essential.”

Strategy, strategy, strategy

For a whole host of reasons, HR is not, currently, considered a driver of business strategy and a key part of improving competitiveness. Yet, on this changeable landscape there is definite opportunity for this to change explains Marahta. “Establishing integrated, best-fit solutions in this complex, rapidly evolving paradigm is the challenge which will determine the pace in which HR can grow and add value,” he says. Ann Pickering, CHRO and Chief of Staff at O2, adds: "For me it’s essential that HR people are business people first, demonstrating a strong understanding of their business. It’s also vital that HR drives direction, helping the business set the tone with the behaviours and mindsets its leaders need to demonstrate in order for the business to be successful."

There are clear examples where HR has stepped up and was considered to add value. At Apple, Deirdre O’Brien, Vice President of People recently expanded her role to Vice President of People and Retail. A key part of her new remit will be aligning the business, the customer and Apple’s interal talent. A press release at the time detailed how her role will work to improve partnership with the business. At the time of her early 2019 appointment Tim Cook, the technology giant’s CEO, noted that the business’ soul is its people, highlighting how important the £163billion firm believes HR is.

 

Does HR model leadership?

There are very few examples of HR leads who went on to become CEOs. “If we asked how many HR directors want to be CEOs,” says Green, “I think it would be a low percentage and I think that’s an issue in itself. We get loads of nice people, and lots of pleasant people but we don’t end up with the best business brains.”

In fact, there are very few examples where an HR lead has ended up sat in the most senior position in the company. A 2013 UK study, by Mullwood Partnership, found that almost two-thirds of HR directors harboured ambitions of becoming CEO yet only five per cent reach this heady level.

The risk to the HR function is that, because of this slim chance of becoming CEO, many of the most ambitious and business savvy jump into other business functions to fulfil their professional ambitions. A quarter of respondents to the Mullwood Partnership survey said this.

For those that made it to the top, there were a few traits that, the study concludes, they all had: accountability; the desire to lead and business acumen. However, the perception of HR was also seen as a contributing factor to few HRDs getting the top job. It is perceived that they don’t have the desire or confidence for the role.

HR Directors who became CEOs

  • Mary Barra, CEO at General Motors

    Headed up the global HR function at the famous manufacturer before taking over product development and then obtaining the top seat.

  • Nigel Travis, CEO at Dunkin’ Brands & Papa Johns

    Spent 20 years working in HR before stepping up to become COO at Blockbuster and then CEO at two other globally-renowned brands.

  • Anne Mulcahy, CEO at Xerox

    Started off in sales at the document services firm before working in HR and heading up staffing.

  • Bernard Fontana, CEO at Framatome

    With a truly global career, the French executive worked in HR at AreclorMittal before taking the top job at several firms.

  • Kevin Green, CEO at The REC

    Green founded his own business before taking a top HR role before he ended up as the highest-ranking executive at the well-known UK recruitment body.

 

However, not all businesses are at the same stage as Apple – in either HR capability or how the business views the importance of talent management by the people function. Elsewhere, Cheese explains there needs to be a, “strategic step-up.” Whether this means speaking the right language or obtaining the right strategic capabilities. He adds: “If we don’t step up and show that we can do this stuff at the most strategic level of the business, someone else will come along and do it for us because the reality is it needs to be done.” 

According to Cheese, with businesses now, “seeing the absolutely critical importance of their people,” and not just taking “the financial view” then HR can fill this strategic space as “we are the people profession and we understand that space”. However, Cheese is adamant that this strategic capability would have to be in the context of the business which would mean understanding the business and becoming more open to the changeable landscape they operate on. “None of the challenges that HR currently faces are HR challenges,” MacPhersons adds:“They’re general business challenges. [What HR needs to do] is help lead the way to understanding how we balance operational needs of a business in a traditional world with the non-traditional outlook people are moving to.”

Is the people function ready to step-up?

Business thinking, as a result of macro-sized challenges, is changing. Key studies by Josh Bersin, MIT, McKinsey, Deloitte, PwC, LACE Partners and Harvard Business School all note how organisational success and market advantage are correlated with areas that HR has an advantage in, and ownership over, including: the employee experience; diversity and inclusion and communication.

However, unless it uses this advantage sagely – communicating how integral thinking around these issues is crucial to the business; as well as how HR can offer consultative and strategic guidance to the business leadership on these issues - then the HR leaders that HR Grapevine spoke to don’t believe the step up can be made.

Yet, the LACE Partners study, that Green was so intimately involved in, concluded that if HR could communicate a clear purpose, split the function between consultative and service provision, hire a different profile of person into the function, be far less siloed and only engage in activities with a clear ROI, as well as offering top-notch people management, then it could get ahead.

 

Thank goodness for HR

HR can often be a side dish to the inevitable main course of any organisation: the business strategy. However, at TGI Friday’s UK the people team plays a central role in strategising. Jacqui McManus, Culture and People Development Director at the 60-branch restaurant chain, describes that “as everything in the business is developed through our people, HR is entwined in business strategy.”

McManus, who has been in the business since 2008, describes Friday’s ‘people agenda’ as always being first or second on the organisation’s business menu. “We’ve [the HR function] never sat back. If it’s good times, bad times or indifferent times, we’ve always been a strong function in our brand.”

In practise, this means McManus, as HR’s representative on the executive team, is part of annual strategy discussions; in order to ensure she understands what direction the business wants to go in and how the people strategy aligns to it.

It is up to McManus, as HR lead, alongside the Chief Strategy Officer, to plan how the US-founded business can develop their brand and “engage the team so that is delivered on.”

At a recent industry awards, the panel lauded this “people-led strategy”. With Friday’s staff retention standing at almost double current levels for hospitality businesses, including a 95% retention rate for managers in training, as well a modest growth in turnover – in what is undeniably a difficult sector to operate in – it appears the close alignment between HR and business is paying dividends.

McManus adds it has helped that the most senior leader at TGI Friday’s, Karen Forrester, the incumbent CEO who joined as Managing Director in 2007, is the business’ biggest advocate for an approach where HR takes is a key ingredient of the business strategy. “It was her belief at the start. [At Friday’s] the CEO is the voice behind the culture and she delivers everyday what we stand for.”

 

Whilst there is no one-size-fits-all approach to HR ‘getting ahead’, there are some things it could start off doing – including showcasing what it does for the business – which are crucial at this volatile business moment. “At this moment [of change], HR can really be the lynchpin to stabilise and give assurance,” Walters explains.

That’s not all: “Be forward-looking and long-term looking,” continues Dalziell. “Mediate well,” adds Walters.  For Green, it’s about only engaging in activities if they offer greater business and customer value, or better efficiencies. For Marahta, it’s about being the best function for solutions provision. And, for Cheese it’s about being able to showcase its business worth.

Even if HR did get a handle on all of the above, due to the change of pace, the political, technological and economic turbulence, it wouldn’t guarantee anything. As Greenpeace’s Director of People pointed out: all othe


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