Monday, August 27, 2012

Like Every Function, To Be Strategic, HR Must Bring Expertise to the Table

This week I’ve been thinking about a Harvard Business Review article by J. Craig Mundy entitled “Why HR Still Isn’t a Strategic Partner.” Human Resources professionals have been debating this issue for over 20 years, which Mundy says must mean that HR has been unsuccessful in many organizations in proving our strategic worth.

The article and the hundreds of comments posted in response give a good overview of the debate about whether HR should be a strategic function, and how to get there, from both HR and line management perspectives. Many people have weighed in on what’s good about HR and what’s wrong with HR. Every HR professional, and everyone in business who cares about the effectiveness of HR, should read Mundy’s article and a good sampling of the comments.

Mundy argues that HR professionals should evaluate every action they take based on whether their act creates flow or causes friction in the organization.  He defines “friction” and “flow” as follows:
“Friction is anything that makes it more difficult for people in critical roles to win with the customer. Flow, on the other hand, is doing everything possible to remove barriers and promote better performance.”

In my experience, these definitions – and this focus for HR – are insufficient, because they are too subjective. Who decides what is difficult? Who decides what removes barriers?

HR has the reputation of only being interested in compliance and transactional work and therefore thwarting what the business needs to get done.  Many times this is true, but what happens when non-compliance brings on litigation that threatens the profitability – or even the existence – of the company? Isn’t it “strategic” to recommend compliance that is necessary to keep the organization in business?

People in organizations tend to think of friction as anything that makes it more difficult for them to do what they want, rather than whether it fosters the creation of a good relationship with a valuable customer.  Similarly, they view flow as anything that removes barriers for them, and not necessarily whether it promotes the overall performance of the organization.

Given the parochial interest of most corporate managers, what is HR to do? To be a truly strategic partner, HR must make its own assessment of the best long-term needs of the organization.  Obviously, this cannot be done in a vacuum, and requires consultation with – and even obedience to – the leaders of the organization.

But for HR professionals to be strategic, they cannot allow others to determine the right course of action without bringing their own experience, expertise and influence to bear.

By arguing that HR must bring an independent expertise to the table, I am not disagreeing with Mundy’s point that HR needs to have a business perspective.  To the contrary.  I am saying that HR is no more and no less likely to be taking the business perspective than any other function.  All divisions within the company need to avoid taking parochial positions, and all are prone to it.  All groups need to work together for the benefit of the whole.

The true debate isn’t whether HR is strategic or not, but whether HR brings a valid and valuable perspective on what direction the organization should take, and whether HR has the expertise and capacity to move the organization in the desired direction. It’s the same debate that is needed about every other function in the organization.

In your experience, when has HR been a hindrance, and when has it been a help?


  1. HR will always be a hindrance when it refers to people who work for their company as "resources" or "human capital" as if they were items on a balance sheet. Southwest Airlines, no slouch in a bankrupt-ridden industry, has no human resources department; they have a people department. Just a difference in terminology? Hardly. A difference in strategy.

    1. Good point. You're right -- language matters.