Leadership Matters
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By Philip Wilson, CHRP, SHRP.

Earlier this year, Ram Charan, business thinker and author (and 2008 HRPA Annual Conference keynote speaker), provoked controversy in a Harvard Business Review opinion piece by suggesting that the chief human resources officer (CHRO) position should be scuttled.




In its place, he recommends splitting the HR function in two – an “HR-A” administrative role overseeing payroll and benefits and reporting to the CFO, and an “HR-LO” leadership and organization role that would focus on improving the people capabilities of the business and reporting to the CEO.

His comments really raised some hackles in the HR community when he suggests that the HR-LO function should 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. In Charan’s estimation, too few CHROs can “relate HR to real-world business needs” because they’re too process-oriented and too “focused on internal matters such as engagement, empowerment and managing cultural issues.” The few CHROs who have succeeded, Charan says, have all come from line operations or finance.

Dissenting opinions

Of course, rebuttals to Charan’s column were many, including replies from influential HR thinkers like John Boudreau and David Ulrich.

In It’s Time to Retool HR, Not Split It, University of Southern California management professor Boudreau says that rather than splitting HR, the function could be “retooled” by adapting financial and other management frameworks to HR decisions, like retooling “talent development using a supply-chain framework to optimize talent flows,” or “total rewards using product design and market segmentation.”

“Retooling HR makes organization leaders smarter by applying their existing sophistication about finance, engineering, operations and marketing to HR and talent decisions,” said Boudreau. “It does require that leaders reach across functional boundaries, but that’s different than simply placing compensation and benefits under the CFO.”

In Do Not Split HR – At Least Not Ram Charan’s Way, Ulrich argues Charan ignores the 20-60-20 rule (where the top 20 per cent of HR executives are exceptional; the bottom 20 per cent are underperformers; and the middle 60 per cent are actively engaged in helping their organizations but are often limited by senior leaders who don’t appreciate the value they provide).

To raise the profile of this middle 60 per cent (and gain more respect for HR’s value among senior leaders), Ulrich suggests a holistic approach that redefines HR’s focus to talent, leadership and capability; he reframes this focus through an “outside-in” lens – that is, through the eyes of the customer. (For example, he wrote, “Capability becomes defined as the identity of the firm in the mind of key customers.”)

Implicit in both Boudreau’s and Ulrich’s rejoinders is that there is no reason why HR professionals cannot become HR-LO leaders.

A new HR competency framework

Ulrich also suggests upgrading the competencies of HR executives, which I think would do much to both elevate HR’s capability around aligning HR strategy to business needs and boost the function’s profile among senior leaders. Indeed, a valid criticism is that we might have waited a bit too long to update the competency framework for the HR profession – the “snapshot” of what it takes to perform as a HR professional.

The current competency model – the Required Professional Capabilities (RPCs) – dates back to 1998 (with a minor refresh in 2007). Considering how dramatically the world of work and the role of HR professionals have changed since then, it is clear the competency framework was due for a thorough update.

Recently, the Human Resources Professionals Association (HRPA) has taken on the work of updating its competency framework; importantly, this new competency framework recognizes the spectrum of HR practice.

As in all professions, individuals at different levels in organizations are assumed to have varying competencies and this work will be a critical foundation on which to build the description of those capabilities as well as the future credibility of the HR profession.

It is definitely not time to “split HR,” but as many HR observers have pointed out, it could do with a rethink. HRPA’s new competency framework provides the foundation for this rethink.

Philip Wilson, CHRP, SHRP, is chair of the Human Resources Professionals Association (HRPA).

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