leadership matters
By Philip Wilson, CHRP, SHRP
Rethinking
the CHRO
Earlier this year, Ram Charan, business thinker and author
(and 2008 HRPA Annual Conference keynote speaker),
provoked controversy in a Harvard Business Review opin-ion
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 organiza-tion
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 commu-nity
when he suggests that the HR-LO function should be led by
high potentials from operations or finance whose business exper-tise
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 re-plies
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 finan-cial
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, opera-tions
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 bene-fits
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 lead-ers
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,
IT IS DEFINITELY NOT TIME TO
“SPLIT HR,” BUT AS MANY HR
OBSERVERS HAVE POINTED OUT,
IT COULD DO WITH A RETHINK.
TackTack/Shutterstock
HRPATODAY.CA ❚ NOVEMBER/DECEMBER 2014 ❚ 7
