Wednesday 1 July 2015

"HR has to demonstrate to the senior decision makers in an organization that it speaks their language"

Lance Wright 
A series of interviews with experienced players and experts in human resources and organizational development. Here we ask the questions to Lance Wright a seasoned HR professional who has just published a new book – “HR In The Boardroom” packed with advice on how HR can get themselves invited to the top table.  

MCE : In your new book, you talk about HR’s desire to be “IN” the boardroom. How close do you think they are to realizing their dream for being a real, accepted part of the decision–making process?

Lance Wright (LW) : This  actually gets at something that has concerned me for years that I address in the book. Frankly, despite the increased number of executives that have the title chief human resources officer, or CHRO, who may in fact sit in the executive suite, I think we are still a long way from most HR professionals being a real accepted part of the business decision-making process. Let me explain. 

I believe a large part of the problem is many HR professionals and senior executives operate within a bifurcated paradigm -whether they consciously realize it or not - where there is “the business” on one hand and then there is HR on the other. I refer to this as an economic and business inefficiency that has been around for a very long time.  This, in many respects, is at the root of the complaints we hear from many HR people about not having a seat at the table. Granted, many businesses and other organizations have gotten a lot smarter about the importance of HR. However, those HR people who made it to the executive suite and the boardroom that have a seat at the table are often not fully involved in developing business strategy or in making decisions that will impact the course of the business. This is reflected in the surveys and studies that are conducted on a regular basis about HR and the relationship it has with CEOs and other senior executives. In a nutshell, the surveys and studies show that HR often believes it has a greater impact on the business than the CEO, and other senior executives, may believe.  
There are certainly occasions when HR is asked for advice on what may be considered “people issues.”  Even then, it is possible that the opinion of other senior executives who may or may not have any real HR experience is given more weight than that of the so-called CHRO.  HR people who are considered savvy business professionals who are given the opportunity to express an opinion on the nuts and bolts aspects of running the business are in the definite minority. 

Unfortunately, the odds are stacked against HR having the ability to be intimately involved in business decision making. In the book I reference a comment by David Ulrich who is a recognized HR guru. He has made the observation that HR’s involvement as a strategic business partner could be plotted as a 20-60-20 bell shaped distribution. According to Ulrich, 20% of the curve at the front end represents HR people who are very much involved as a strategic business partner with the CEO and senior management. The 20% at the other end of the curve, for lack of a better description, don’t have a prayer of the influencing the CEO or other members of the executive suite, or the board.   The 60% bulge in the middle represents companies who have not yet made full use of HR as a strategic business partner but may or may not do so.
Anyway you cut it, there is a long way to go before HR is real accepted part of the decision making process in most companies.

MCE : What is it that HR need to demonstrate to get the “ear “of top management (the CEO)?

LW : To get the ear of the CEO and the top management team, they must first “hear” HR.  In order to be heard, HR has to demonstrate to the senior decision makers in an organization that it speaks their language.  And to be able to speak their language fluently, HR must understand the business from front to back, as well as the numbers and the other concepts that represent the language of business.  Bluntly, HR has to demonstrate it has something worth listening to before it will be able to get the ear of the CEO and the top management team. 
The best way to get the ear of a CEO, or another senior executive, is to have that person think of you as a peer and a trusted advisor. The HR professional should demonstrate the sort of business understanding and savvy that would prompt the CEO to say, “…this is a person who thinks like me, understands what I am attempting to accomplish, and what I am up against. HR has to know the business strategy and be able to poke holes in it based on a thorough knowledge of the business, the competitive environment, and the capability of the organization and its talent to get of the ear of the CEO and other senior executives.  In a sense, HR needs to be able to perform a classic SWOT (strengths, weaknesses, opportunities and threats) analysis as well as any highly paid management consultant that may be brought in from the outside. There are many, well intentioned HR professionals who will describe themselves as a “people person.”  Some of these HR professionals may not have, or be able to demonstrate, the business skills needed to get the ear of the CEO so they don’t.  The HR function does not operate in a vacuum but in the context of the business. While almost every CEO mouths the words that people are the most important asset of a business or any organization, most senior leaders are hoping to have at their side a business person who understands the people part. An HR professional who hopes to get the ear of the senior management team has to demonstrate business acumen and ability.
I point out in the book that, in a general sense, to get the ear of the CEO and other members of the executive team HR has to be viewed as credible and knowledgeable. HR has to demonstrate the ability to give consistently sound business advice over time. The CEO and senior team members will also appreciate an HR professional who demonstrate the courage to give advice that may not be pleasant or welcomed. An HR professional has to be viewed by the CEO and other members of the executive team as an impartial and independent arbiter to get their ear. Unfortunately, as we discussed earlier in the other question, there are some CEOs and senior management teams whose “ear” HR will never be able to get. 

MCE :If you were advising an ambitious young HR professional, what would you tell him or her to study and get experience in what areas of business?

LW : Operating as a senior executive in a business is similar to being an airline pilot. There are certain skills and capabilities that should be developed by any young person who hopes to make it to the top of an organization, not only a young HR professional. All pilots understand the physical aspects of lift and drag and are able to land and take-off safely whether they are piloting a Piper Cub or an Airbus 380.  Any young professional who wants to eventually be a senior executive in the C-Suite, and the boardroom, has to understand how businesses work, financial concepts and theories, and the ins and outs of financial statements. Many young professionals who have math, or science, or engineering, or finance backgrounds often have the computational and numbers crunching skills needed to operate at the senior levels of an organization which, in the past, has given them a leg up on most young HR professionals. In my book, I give the advice that a young HR professional needs to know what an MBA knows. This doesn’t mean every young HR professional needs to obtain an MBA degree. Many young HR professionals may pursue the degree – increased numbers are doing just that.
Along the way, young professionals should develop the other skills and capabilities needed to be a senior executive. The ambitious young HR person should concentrate on developing the qualities that are looked for by most organizations. There isn’t a lot of magic to the list.  So in addition to the hard skills we just discussed, young HR professionals should also pay attention to developing these other qualities:
·         Vision creation - Do you have the ability to help others see what the future will be if certain actions are or are not taken. 
·         Leadership -Work on what it takes for people to be willing to follow you. 
·         Business acumen - Learn all you can about business in general, not just the company or industry in which you work. 
·         Strategic thinking - Concentrate on learning to “connect the dots,” and challenge the conventional wisdom. 
·         Decision making – And learn to be decisive. Decisiveness is one of the qualities that virtually every senior executive has to develop – and display – to be successful.

MCE : You’ve spent your entire professional career in HR, out of that long career, what would you say was the most rewarding, experience?

LW : My stint in financial services early in my career gave me the foundational number-crunching and financial skills needed to make it the senior level of an organization.

All in all, the most rewarding experience of my career has been serving as a trusted advisor and confidant to various organization leaders who have sought my counsel on a range of business issues and not just those that were people related. The really rewarding part is I have been able to play that role in a number of different countries around the globe. My last position as a member of the executive committee of a publicly traded company was certainly a highlight of my career.

.... and the one, you would most like to forget ?!!

Oh, for sure there have been some experiences I would like to forget that were not at all rewarding. During one of my assignments in Europe many years ago, I reported to the head of an affiliate who acted as if I was his personal butler. It made for some tense situations when I had to stand up for myself.
However, this was trivial compared to the very difficult experience of dealing with the unexpected death of an employee. Because of the length of my career there have been a few times when I have had to deal with this. The first time I had to deal with this was in the first year of my career. I was 22 years of age at the time. One of the librarians at the university had committed suicide and her parents were eligible for payment from our self-insured program as her beneficiaries. My boss and I personally delivered the check to express our condolences. I remember the sorrow of those parents and how heartbroken they were. That has stayed with me over the years and has been very hard to forget.

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