Its Time to Split HR

Prof. Ram Charan

Harvard Business Review July August, 2014

CEOs expectations from CHROs:

1. Skills in linking people and numbers to diagnose
weaknesses and strengths in the organization,
2. Find the right fit between employees and jobs, and advise
on the talent implications of the companys strategy.

What is wrong with CHROs:

1. Most of them are process-oriented generalists
2.

Expertise in personnel benefits, compensation, and labor relations.

3. Focused on internal matters such as engagement,

empowerment, and managing cultural issues

4. What they cant do very well is relate HR to real-world

business needs.
5. They dont know how key decisions are made,
6. They have great difficulty analyzing why peopleor

whole parts of the organizationarent meeting the

businesss performance goals.

Examples of Strategic CHROs:

CHRO of GE, Bill Conaty, was a plant manager. Conaty
weighed in on key promotions and succession planning,
working hand in glove with Welch in a sweeping overhaul
of the company.
Mary Anne Elliott, the CHRO of Marsh, had several
managerial roles outside HR. She is overhauling the HR
pipeline to bring in other people with business experience.
Santrupt Misra, who left HUL to join Aditya Birla Group
in 1996, became a close partner of the chairman, Kumar
Mangalam Birla, working on organization and
restructuring and developing P&L managers. He runs a $2
billion business as well as heading HR at the $45 billion
conglomerate.

My proposal is to eliminate the position of CHRO and split HR into two

strands.
Onewe might call it HR-A (for administration)would primarily

manage compensation and benefits. Report to the CFO, who would have to
see compensation as a talent magnet, not just a major cost.
The other, HR-LO (for leadership and organization), would focus on

improving the people capabilities of the business and would report to the
CEO.
HR-LO would be led by high potentials from operations or finance whose
business expertise and people skills give them a strong chance of attaining
the top two layers of the organization.

Dave Ulrich: Top HR leaders focus on

Talent: delivering competence; commitment and contribution

of employees throughout the organization.

Leadership: ensuring leaders at all levels.
Capability: identifying the organization capabilities that
enable organizations to win over time. These capabilities
include service, information , innovation, collaboration, risk,

efficiency, change, culture change, learning, strategic focus.

Holistic approach to helping the middle 60%.

Redefining the strategy (outside-in) and outcomes (talent, leadership,
and capability) for HR,
Redesigning the organization (department structure), Innovating HR
practices (people, performance, information, and work),
Upgrading the competencies for HR professionals

Focusing HR analytics on decisions more than data. It is not easy to

move a profession forward.
The top 20% : dont always share their lessons in ways that teach
others.

The bottom 20% get too much attention.

Vast middle 60% gets discouraged when respected
colleagues belittle them and their efforts.

Reasons:

Failing to state CEO as a career goal.

Failing to build a well-recognized internal HR brand

Failing to prove impact
Failing to anticipate and forecast

Failing to build a competitive advantage

 Dwelling on equal treatment instead of differentiating

and focusing on performance
Failing to take the lead with technology
Failing to think and act globally
Failing to demonstrate responsiveness and effectiveness
within HR
Failing to build a performance culture

HR Value Creation

HR must understand the external world in which it

operates.

Technology

Economic and Regulatory issues

Effects of Globalization

Workforce demographics

 Recognizing your stakeholders

Employees

Line Managers
Customers
Investors

 HR Practices that make this happen

The way you hire, train, and pay people and the way

you organize work sends messages to employees about

what matters most.

 Treat the HR function as a business

Do you have a strategy and a structure that will deliver value?

The strategy will help you focus attention on key factors and respond
appropriately to business realities.
The structure will organise HR resources in ways that govern how HR
work is done.

 Whether HR professionals have the right skills ?

Clear roles and distinct competencies
Ability to instill changes quickly and link the results
to customer outcomes.
Ability to build relationships and trust

Source: Mckinsey 2013

Course Outline
Course Title

: Business Strategy

Total credit hours

: 15

Course Teacher
Course Objectives

: D. K. Srivastava
:

The main aim of this course is to develop a shared understanding

among the students about conceptual, empirical and policy
orientation of the study of Strategic Management . The focus is on
interface of HRM with Business Strategy in the context of emerging
global business scenario.

The course aims at covering the following topics:

Understanding criticality of Business Strategy

Strategic Management Changing Role in Global scenario

Strategies in Action Models and types of strategies

Context and Challenges of Strategic HRM

Aligning HRM strategy and Business strategy

Diversity for strategic competitive advantage

contd

At the end of the course, students should have an

understanding of:

Broad overview of business strategy and its criticality in

emerging business scenario.

Basic concepts, principles, functions and models of strategic

management

Application of Business Strategy models in developing

strategic business advantage.

Evaluation Scheme:
Group Project - Weightage (40%) End Term Exam - Weightage (60%)

Reference Books:
1. Boxall, Peter & John Purcell (2003), Strategy and Human Resource
Management, Palgrave Macmillan: New York
2. Torrington, Derek and Laura Hall (1999) Human Resource
Management, Prentice Hall, London.

3. Schuler, Randall S. and Susan E. Jackson (eds.) (1999), Strategic

Human Management, Blackwell; Oxford.
4. Linda, Holbeche,(2001), Aligning Human Resources and Business
Strategy, Elsevier Publishing Company.

5. Fred R. David, (1999), Strategic Management : Concepts and Cases,

Prentice Hall.
6. Michael E. Porter, (1985), Competitive Advantage, The Free Press.