Your HR Strategy Needs a Strategy orWhy We Still Hate HR

Its been 10 years since Keith Hammond wrote, Why We Hate HR. The human resources profession, led
by their representative advocacy organizations, like the Society of Human Resource Management
(SHRM) have spent a great deal of time and money to move the needle on HRs image amongst
employee populations and in boardrooms across America. The result --- its 10 years later and many still
hate HR but the reasons that Hammond put forward have begun to change.

In 2005 Fast Companys deputy editor Keith Hammond reduced every HR division to an obsolete
company appendage consisting of the least educated, talented, and business minded people in the
corporate world. In his famous article, Why We Hate HR Hammond summarily writes that, The
human-resources trade long ago proved itself, at best, a necessary evil -- and at worst, a dark
bureaucratic force that blindly enforces nonsensical rules, resists creativity, and impedes constructive
change.

Hammond had survey power on his side. According to the Hay Group, for example, only 40% of workers
valued their companys ability to retain talent, only 41% believed their performance evaluations were
impartial and only 58% considered their job training valuable. In todays view, from two recent PwC CEO
surveys, 66% of HR teams are not prepared to manage talent and 63% of CEOs are concerned with HR
not having the right skills and talent to lead their company in to the future, all that with 40% of major
projects having no ROI calculations performed as a part of decision making process.

Hammond also had other writers and additional data on his side. For example, David Sirota (Wharton
School Publishing at UPenn) says that IT and HR are repeatedly rated the lowest, on surveys trying to
rank the best and worst company departments.

So in virtue of these deficiencies, under-trained and under-talented HR departments lack both business
acumen and the experience and ability to argue strategic issues. Its been 10 years since Hammonds
article, and HR still isnt any closer, a bit more vocal perhaps, especially if you like reading self serving
snippets or promotional fodder on LinkedIn.

And thats the thing. Its 10 years later and while some of the reasons why employees still hate HR have
changed---not much has changed.

Some of the reasons in 2015 include--Complaining about not having a seat at the big table
Look at the best CEOs and best companies, especially financially profitable ones, 9 times out of 10, the
human resources executive is a C-level peer. HR should, in every company have their own seat at the big
table, certainly not reporting to the CFO, COO, Chief Legal Officer or anywhere else. So HRs complaint is
well founded but poorly positioned to make change happen.

The result is, frankly, everyone is sick and tired of this HR complaint and it creates its fair share of
animosity and counterproductive behaviors, and just some of that can be annoying, agitating, and stir up
some hate.
The answer lies in the problem. HR managers and CEOs fundamentally approach business from different
and disparate angles. The two arent speaking the same language. Take the difference between how they
both talk about value. For CEOs the formula is simple: companies make money the way toasters make
toast. If a toaster doesnt make toast, lots of toast, its not a very good toaster. If a company doesnt
make money, lots of money, then its not a very good company.

But HR gets caught up in the semantics of terms like value added, transformative, best practices and
engagement and cant connect with what they think is this mysterious CEO fascination with the bottom
line. HR people fixate on what they want value to mean, and try to impose their definition by showing
how they cut benefit costs, save recruiting dollars and validate training as an investment that they dont
know how to quantify.
Of course, social and financial goals are not mutually exclusive, as IBM and General Electric show, but
setting priorities for how to properly combine the two is fundamentality different between the big table
and HR. Take this passage from Bernard Marr explaining this difficulty:

HR departments are trying to serve two masters which, in most cases, is not very successful. On the
one hand, they are there to provide support for the employees and, on the other hand, they are there
for the company and the senior management to help manage (and monitor, discipline, appraise, etc.)
employees. This conflict of interest can cause friction and in many instances HR departments swing to
the support the company side, rather than the support the employees side.

The opposite is just as true.

Because the fact of the matter is that HR works for and in the interests of its superiors and its superiors
have a profit-based mentality. When HR fails to understand what that means to how they should attack
things, the big table can see it as a hindrance to the bottom line.

Thats the thing: talking up the latest trends does not, by itself, improve the bottom line. You cant tweet
your way to the big table. Big data, evidence based HR, social media, engagement surveys, best
practices, change management, dont get you a seat at the big table, either. New compensation plan
designs or cutting costs doesnt set you in the right direction. These arent the creative and innovative
solutions and initiatives that constitute real strategy and leading the organization forward.

Having the vision and the ability to execute on the CEOs strategic mission to advance the bottom line
and the long term health of the company and its employees; thats what the big table needs from the HR
function.
They arent strategic no matter how many times they say so

Lets start at the top; CEOs are tasked with running companies that focus as much on the companys long
term viability and growth of the business as on the maximization of shareholder value. In a free market
economy, there can be pressures in the short term but over long periods of corporate history we have all
seen that innovation, sustained results and talent partnered end to end, achieve the greatest results for
all.

HR cannot simply become strategic by using the word in its latest set of PowerPoints. The typical HR
strategy or strategic plan talks about engagement, succession, diversity, human capital analytics,
executive compensation, performance and talent management, all of which are huge blankets that are
certainly needed and certainly contribute to a basic conversation on managing the business but often
serve to fill the weighty category of strategic buzz words pushed by consultants to CEOs whereby HR
managers need to look tuned in to the critical issues of leading the workforce.

Lets examine one slice of strategy, talent.

Before the turn of the millennium (1998) studies showed that companies who coveted and sought out
the best talent were the ones most likely to succeed (see The War for Talent). With all things being equal

in a globalized economycapital, strategy, and R&Dthe one thing that ensures a companys rise over
the rest is the recruitment of the best and brightest to make its creative and tactical decisions.

But its not a matter of simply finding any talent. Its a matter of finding those talented individuals who
meet the particular needs of the company at a given time, andto give more concrete criteriawho can
add flow instead of friction to the business. In order to add flow, add value, accelerate results; HR has to
identify those, critical points of the business where the strategy succeeds or fails, and provide relevant
talent solutions.

Asking whether this or that action adds friction or flow to the business is a good start. Why on earth HR
hasnt, is nothing short of baffling.

When asked what keeps them up at night, everything you need to understand about why HR needs
major help reveals itself. When asked you get answers like Obama Care, retention, skill gaps, inclusion,
engagement, communications, a whole laundry list of HR centric speak.

What keeps the best HR leader awake at night, the one that can beloved and revered is easy to identify
--- whatever keeps the CEO and business leadership awake is the answer.

So if HR wants to be a strategic partner they need to think like a strategic partner and take on the same
issues as the CEO and the organization. Its time that the HR strategy finds a new strategy.

The overuse of business partners and other spurious phraseology

Its 10 years later, and HR departments, led by the consulting community have realized that they have run
out of paradigm shifts to leech onto, so theyre either renaming old ones or recycling a few for their
newer greener version.

Lets look at a huge effort that adds no value the title game and word magic.

Why do companies have HR Business Partners titles? Did you ever notice its the only function in the
company that uses the business partner moniker? What about my marketing business partner, or sales
business partner or my administrative, finance or janitorial business partner. Arent we all partners
already? Why does HR get this extra special tag line? It got this special tag not through effort but
through convenience in most cases. Business line executives want a business partner; they want
someone who knows the business, its drivers, its levers, its competitors, its needs, wants and people. So
to meet that need, HR departments added the term Business Partner to their titles, no actual business
knowledge was added in the process, just the title. The HR business partner is mostly aspirational and
should be dropped immediately.

Another title, amongst many, is talent acquisition directors. Didnt they used to be called, simply
enough, recruiters? Recruiter is great for two reasons: its not ridiculous to say out loud and they used to
actually recruit talent. Everyone should know better by now, including human resource executives.

What is all a symptom of? HR is insecureand rightly so about its position that it uses inflated jargon
to pawn itself as owners of much need intellectual capital, without which the corporation could never
survive.
Whats needed is commercial knowledge and business impact, not spurious phraseology. Then and only
then can HR personnel demand a seat at the big table.

Failing to understand human capital management

Andrew Carnegie said, The only irreplaceable capital an organization possesses is the knowledge and
ability of its people. The productivity of that capital depends on how effectively people share their
competence with those who can use it."

Managing human capital is managing knowledge and the creating of new knowledge; making it available
to those who can use it most effectively and for the highest return. The capital is not the body its the
mind. Look at human capital management in terms of diversity initiatives. The key measures are often
measured in expressions of ethnicity, gender, age or cultural profiles. Human capital managers measure
the color of skin when they should be managing the color of thought and ideas. A perfectly diverse
corporate profile, whatever that would be, would be claimed by the human capital manager as a success
if there were a nice mix of different colored marbles in the bucket. Rather real success is the promotion
of knowledge, creativity, innovation, inclusion and customer journey that creates shareholder and

stakeholder wealth. Human capital success comes from the diversity of thought and experiences
purposefully combined and directly applied to our most promising opportunities.

Human capital management speaks of itself in terms of best practices. Using the term best practices is
like, try the veal, its the best in the city and we know how that conversation ended. Whose best? My
best? Your best? Best practices are something cooked up by someone else to fit their strategy, not yours.
But since the average human capital manager/human resources executive/ business partner/talent
manager/chief people office really doesnt know how to deconstruct a strategy in to its fundamental
parts, someone elses best practices are the path of least resistance. The best HR teams reframe
situations such that the business leads are encouraged to put their highest value resources on the
companys biggest opportunities rather than using someone elses best practice hoping for the right
outcome. Human resources should see their competence and other best practices as departure points
for improvement rather than replication.

Business people
We still hate HR because they dont have the skills or desire to become business people first. They
havent had the experiences they need to create value. They arent ROI driven and not only from a
business sense but in terms of their own function as well. Companies invest a ton into the HR function
and the function cant articulate what it delivers to the bottom line let alone even trying to have a top
line contribution argument.
And thats why we have some hate still because the truth of the matter is that we have the least
sophisticated business people looking for and trying to develop the most talented business people.
Even the bachelors degree in HR amounts to little else besides sibling rivalry to a general studies B.A.
Communications classes take up the bulk of major-sensitive credits while electives get divvied out to
classes like, 18th Century Shakespearian Culture in Northeastern Scotland. Finance and business
classes scarcely make the cut. Mathematics, statistics and economics are almost nowhere to be found
save in the minimum requirements which can be satisfied by an online community college course, if
required at all.

There are several well known liberal arts colleges where you can earn a Human Resources management
degree without taking a single business course.

What about a Masters in something like HR management? Is there at least some of hope at the graduate
level? Well, according to Forbes the answer is no. Forbes ranks a Masters in HR management as one of
the top 10 worst educational choices in America.

The most glaring example that demonstrates the human resources capability as a business catalyst
comes directly from the one organization who should be leading this charge and thats, the Society for
Human Resources Management (SHRM).

SHRM has been pushing for legislation that requires public companies to report on a set of human
resources metrics in their annual reporting and accounting disclosures: i.e. SHRM proposes to codify
standards that measure workforce diversity, turnover, job training, etc. But the proposal has been met
with backlash from CEOs, investors and other HR organizations. Looking at SHRMs efforts, its not even
clear that the measuring standards they propose could be applied company by company to produce
objective results. What a classic blunder, trying to create a tool from a functional perspective that the
end user, the CEO doesnt want and doesnt support. If the leading organization for HR professionals
doesnt understand how to position itself to add value to the business, how can we expect that it can
advise and lead its members in the same effort?
So after 10 years we still hate HR, maybe a little less for old reasons, maybe a little more for new reasons.
Is that so wrong? In their biggest attempt for relevance they missed the mark wildly and in a hugely
public fashion they proved one thing and left no doubt remaining--- they dont understand how to
deliver value to their key customers.

Will we love HR 10 years from now?

Will love and salvation shed our hatred of HR departments through things like best practices, workforce
analytics, evidenced based HR, engagement consultants, diversity initiatives and social media recruiting
of millenials?

Nope.

No doubt, these are more sophisticated tools than what personnel departments possessed in the past,
but you cant give the keys of a Ferrari to a 17 year old. And fancy tools, like fancy cars mean nothing--its all about the driver and thats where human resources executives need to focus. Driving results
through the language and lens of business, by taking their functional expertise and in conjunction with
business leadership, develop an integrated approach to leading people, managing process and delivering

the best custom tailored solutions aimed at commercial success, looking at the top line for once instead
of $1,000 in cost savings amortized over 3 years.

The only hope is for HR leaders and human resources personnel to become a learning function--- to
learn business---- to learn what approaches and efforts are needed in their organization to drive value
creation and long term corporate wealth. HR departments need to take on the fundamentals of
leadership and competition and the technical perfection of process and execution. They need to
understand the economic levers of their businesses from the front line as drivers of mission and to
stop seeking self worth through buzz words and strategic consultant speak. Again, its time that the HR
strategists finds a new strategy.

While we may still hate HR ten years after Hammonds article, there is a clear first step to finding love.
That is taking up the challenge of changing HRs behaviors and viewpoints and embracing the
fundamentals of business. To never hire a person on the HR team who hasnt served in a business role or
another function first. To decide that the best practices of others should be the bottom, not the top. To
strip away the artificial phraseology and esoteric regalia. In that challenge is accepting fault, wherever it
lies; then looking forward and tackling it with conviction, commitment and courage.

For more information, simply visit: https://www.linkedin.com/pub/john-j-falcetta/32/6b2/a15

John J. Falcetta
610-372-2460
johnfalcetta@yahoo.com
Website: https://www.linkedin.com/pub/john-j-falcetta/32/6b2/a15
New York
United States

John J. Falcetta, HR Strategy, Why We Hate HR