It seems the inclusion – or more specifically lack of inclusion – of the HR function in the strategic decisions of the boardroom is never off the radar in HR circles. The discussion has once more taken centre stage with the release of a new report by DDI showing that CEOs see HR as the ‘least strategically important function’ – instead HRDs are perceived to be bogged down by the administrative burden of the HR department. These are depressing findings indeed for HRDs keen to drive the talent management proposition internally. But what can be done to address the issue and prevent HR from becoming a broken brand?
It is true to say that the HR department provides a valuable – and totally essential – support function for any business. However, if HRDs are to gain the respect and ‘ear’ of their peers on the senior management team, then perhaps it’s time for them to stop acting like administrators and instead start living and breathing the business in which they’re operating. As any finance director will assert, cash is essentially the lifeblood of any organisation and the bottom line is ultimately the consideration that drives virtually every decision at the top. More than anyone else within a business, the finance director understands that presenting an argument in figures is one sure fire way to ensure the CEO sits up and listens. Could taking a lead from their colleagues in finance therefore be the key to HRDs being given a chair round the board room table?
In answering this question, a good example to hold up is that of the procurement function. Procurement specialists have arguably overtaken HRs on the ladder of CEO influence. Why is this? Simply stated, it’s because their very remit is to care about the bottom line. Their time is dedicated solely to purchasing goods and services that most effectively meet an organisation’s needs, while delivering value at every level of the business. Moreover, in the past decade, the procurement function has successfully moved from being perceived as an operational revenue absorbing department to becoming advisers, partners and solutions providers for other internal departments.
In order for HRDs to be regarded as advisors and solutions providers, they also need to recognise that business strategy and talent management needs a fluid and flexible approach, particularly given the ever-shifting quicksand that is the new world economy. Despite the economic recovery, markets are still uncertain environments. In this challenging landscape, those at the top need to be able to make informed decisions based on robust and insightful analysis. Unfortunately, many HRDs are still failing to provide the senior leadership team with useful metrics that measure the impact of HR initiatives on actual business results.
The bottom line is that HRDs need to truly understand their business’s customers, people and processes and the pivotal role that talent plays in the mix. Ultimately, talent is the only enduring competency that a business should focus on – and from which a business’s needs will benefit. It’s how you communicate this that dictates your place on the board.
