Q: Why is HR still not a strategic partner?

There’s an article in Harvard Business Review this week, “Why HR Still Isn’t a Strategic Partner.” In it, the author laments that most corporations are asking themselves why they even have an HR department and as a solution, encourages HR leaders to ask a simple question: “do my actions cause friction in the business or do they create flow?” Then act accordingly. It’s trite advice and it misses the core issue entirely. In fact, there are really two major reasons HR is marching towards irrelevancy and it has nothing to do with intentions…

The two major reasons HR is marching towards irrelevancy:

#1. HR is a loaded word that lacks a clear cultural definition. (If you do read Craig’s article, make sure to read the comments from other HR professionals to get a sense of the confusion). Is the function of HR to perform recruiting? Career development? Hiring and firing? Prevent the company from getting sued? team performance improvements? It’s like arguing about capitalism versus socialism without understanding what each word really means. Yes, a lot of opinions get thrown about but no real progress gets made until there’s clear and mutually understood definitions.

#2. Because of a clear lack of definition, HR is usually structurally misplaced in an organization and therefore doesn’t deserve a seat at the table with functions that are driving the business forward. Why would functions like sales or marketing or strategy ever want those lowly HR peons, well-versed in arcane employment law and specializing in telling the company what not to do, mucking up their meetings? Can’t blame them.

Here’s how to solve the HR problem:

Within your organization, NEVER, EVER co-join the short range efficiency and liability prevention functions of HR (things like following employment law, dotting i’s and crossing t’s, and handling the actual process of hiring and firing and benefits administration, etc..) with the long range effectiveness functions of HR (things like recruiting, skills development, career development, etc.) as one function. Period. Stop. If you do this, I’d personally track you down and shoot you but your organization is already so messed up that I won’t have to.

Instead, place the short range efficiency and liability functions (I’ll call them Admin HR) under the Admin function of your organization and place the long range effectiveness functions (I’ll call them People Dev HR) under the Strategy function of your organization.

(BTW: You can outsource the Admin HR function entirely but the People Dev HR function must be overseen by the CEO directly with the support of other senior leaders and can be supported by third-party specialists in people development and team performance.)

This is a rich topic of discussion and if you’d like to learn more, read Chapter 18 in Organizational Physics – The Science of Growing a Business, but I’ll try to capture the pre-and-post impact of structuring HR in this way (not that anyone is still reading this far:

When Admin HR and People Dev HR are wrongly co-joined into one function, ain’t nobody happy. The HR team isn’t happy because the drive to make things controllable and efficient prevents the them from investing as much time and energy as they’d like into people development. (Ironically, most HR professionals entered the profession because they have an innate need to help people grow and develop in their careers. But they’re burned out because most of their time and energy is spent on liability prevention.) Senior leadership isn’t happy because HR is just an obstacle to getting things accomplished, not a partner in success. Staff isn’t happy because HR is someone you see when you get fired, not someone you trust with your career aspirations and personal growth.

But when they are separated as different functions as I’ve described, led by different people (note: you want the style of a good Admin HR to have high Producer/Stabilizer traits and the style of a good People Dev HR to have high Innovator/Unifier traits as described in the free 15 Second Style Indicator), then, all other things being equal, everybody is much more happy.

The Admin HR team is happy because they can focus on their role of keeping the company out of legal and financial trouble. They can be good “bad” cops and not be expected to be more than that. The People Dev HR team is happy because they can focus on recruiting people who are an outstanding cultural fit and authentically help them to develop their careers because they don’t have to worry about liability prevention. Senior leadership is happy because the people recruiting and development function is instrumental to strategy and a partner in success. And the staff is happier because they have one source to go to for career development and one source to go to for benefits and firing and never the two shall meet.

TL;DR: be clear on your definitions and expectations of Admin HR versus People Dev HR and structure them accordingly in the organization.

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About Lex Sisney

Lex Sisney is an expert at creating breakthroughs in individuals and organizations. He's grown from co-founder and CEO of the world's largest affiliate marketing company to follow his passion as CEO Coach to the world's next generation of expansion-stage companies.