About ‘Leadership Weekly Digest’ (LWD): The goal of this weekly newsletter is to highlight quality articles from the past week –in a condensed format– that discuss leadership, with a focus on employee engagement. Much of the content comes from those we follow on Twitter, and members of the Employee Engagement Network.

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Human Resources: To Hate, Not to Hate or To Have? Articles by Nick Corcodilos, Bill Taylor & Keith Hammonds

A valuable debate on the value and role of human resources (HR) was expanded this week in Fast Company. This included Nick Corcodilos disagreeing with Bill Taylor’s most recent article on “Why We (Shouldn’t) Hate HR“. It all started with an article published back in 2005 in Fast Company Magazine called “Why We Hate HR” by Keith Hammonds, prompting Mr. Taylor’s recent rebuttal, and Mr. Corcodilos rebuttal-rebuttal. While this will make for a long LWD article, keep in mind this is covering 3 separate articles!

The original article criticized the sorry state that many HR organizations found themselves in:

The human-resources trade long ago proved itself, at best, a necessary evil — and at worst, a dark bureaucratic force that blindly enforces nonsensical rules, resists creativity, and impedes constructive change. HR is the corporate function with the greatest potential… and also the one that most consistently underdelivers. – Keith Hammonds

Ouch! That article went on to discuss Hammonds’ view on the reasons for this consistent underperformance:

1. HR people aren’t the sharpest tacks in the box: To sum up his sweeping generalization, Hammonds indicates that “the best and brightest don’t go into HR” and many of the roles they are trained for are being outsourced. What is left is more of a business-oriented strategic role that most HR professionals aren’t particularly adept at. [I must have been particularly lucky in my experiences with HR, I have found many to be very sharp, strategic thinkers. -ed.]
2. HR pursues efficiency in lieu of value: Instead of focusing on activities that would add value, many HR departments focus on metrics that are easy to measure, like number of people hired, % of people satisfied with benefits, or how much of the employee population has completed performance reviews; failing to evaluate their real impact to the business.
3. HR isn’t working for you: “Human resources… forfeits long-term value for short-term cost efficiency… Who does your company’s vice president of human resources report to? If it’s the CFO — and chances are good it is — then HR is headed in the wrong direction… A financial person is concerned with taking money out of the organization. HR should be concerned with putting investments in.”
4. The corner office doesn’t get HR (and vice versa): By the time a manager makes his or her way up the ladder to a C-level position, they have developed an impression of HR that is not consistent with the role that senior HR needs to play in the organization, resulting in this typical result: “The chairman wanted someone to plan company picnics and manage the union, and every time [the head of HR] tried to be strategic, he got shot down.”

Taylor’s rebuttal begins by lauding the original article for the debate it stimulated, and how often it was reference by HR professionals (gee, I wonder why), but criticizes its conclusion by suggesting another explanation for HR’s failings:

The real problem, I’d submit, isn’t that HR executives aren’t financially savvy enough, or too focused on delivering programs rather than enhancing value, or unable to conduct themselves as the equals of the traditional power players in the organization… The real problem is that too many organizations aren’t as demanding, as rigorous, as creative about the human element in business as they are about finance, marketing, and R&D. — Bill Taylor

This statement rings very true with my personal experience, certainly for environments where the HR talent has a strong strategic focus and aptitude. Taylor sites the success of several companies (Cirque du Soleil, Pixar, DaVita) and suggests they “understand that the most important business decisions they make are not what new products they launch or what new markets they enter. What really matters is what new people… they hire and how they create an environment in which everyone in the organization can share ideas, solve problems, and develop a psychological and emotional stake in the enterprise.” He suggests success will result when HR executives:

Start asking the big questions*: Why would great people want to be part of your organization in the first place? Do you know a great person when you see one? Are you great at teaching people how your organizations works and wins? Does your organization work as distinctively as it competes? If your company and its leaders can answer those questions, then you’ll have an organization that is capable of winning–and an HR organization that everyone can love. – Bill Taylor

Sounds good to me, but Taylor’s assertions put Nick Corcodilos into attack mode in his ‘rebuttal-rebuttal’:

I don’t agree. I think successful organizations are very rigorous and creative about getting profitable work from their employees, their managers, and their business units. The problem is, those organizations don’t expect as much from HR, hence HR is usually not overseen, not measured, and not judged for its performance… Anything goes. And we know it does. That’s why we hate HR — though we shouldn’t. After all, HR does what the board of directors permits it to do. The best HR people I know find ways to embed themselves into business units. They become part of a business team. They don’t hide behind “company overhead.” More than anything else, it’s the success of those precious few “HR folks” that makes me ask, Why HR? – Nick Corcodilos

Corcodilos dissects the various roles of HR and suggests how a separate HR function is unnecessary, with HR’s roles better performed by by HR skills embedded in other business functions:

1. Handle regulatory matters: “Let the legal folks grow an implementation and compliance team for human resources matters.”
2. Employee training and development: This role “belongs in each business unit or company department. Create a position that enables managers to decide how to educate, train, and develop their workers… Let the business units decide how to invest the funds for a return the business units are accountable for. “
3. Organization design: “Any business unit’s management team is responsible for structuring its operations, and it should hire the experts it needs to help it do the job. I’ve seen one disastrous organizational design after another created by people who are not expert in the business being designed.”
4. Workforce analysis and data management: “Show me a company where HR is measured and judged based on the actual performance of all employees, and I’ll eat this column. This is a perfect role for oversight by the finance department… But make each business unit accountable for its own analysis and planning.”
5. Employee relations, social programs, and events: “Rather than pay big bucks for big programs, big mission statements, and big public relations initiatives, spend a few dollars to hire a specialist for each business unit who is responsible for monitoring and coordinating employee programs.”
6. Compensation and benefits management: “Don’t waste that great finance department you have. Those people are really good at numbers. Invest in some further training and develop some specialists to handle competitive compensation and effective benefits programs… get your department managers involved.”
7. Recruiting, processing and hiring: “Last year one of the biggest online job board’s revenues were around $1.3 billion. Your HR department is the source of most of that revenue. But your company made only about 4% of its hires from that job board… your HR execs are telling the world there’s a “talent shortage” while we’re experiencing the greatest glut of unemployed, highly-educated and skilled workers in history.”

Now I will do my best impression of a spineless jellyfish and agree with many of Corcodilo’s points as well; but are these conclusive reasons not to have any form of centralized HR? In the case of a fully decentralized model, who takes the leadership to task if they aren’t following through on developing good methods to address functions 1-7 listed above? Having seen organizations that brought in ‘strategic’ HR professionals late in their development (from startup stage), those HR professionals illustrated some really egregious examples of where basic elements of 1-7 were completely ignored, either in large pockets of the organization, or organization-wide.

Other functions also have challenges with measurable AND valid metrics (legal comes to mind), but for some reason these don’t come into question. Even all those ‘easily outsourced’ functions that HR performs may need a second look, as competing for talent becomes much more difficult if your HR interface (recruiting, development, rewards, etc.) looks the same as all of your competitors.

In the end, I think the decision will come down to the composition and leadership style of the executive suite. If the CEO has a strong strategic tendency, asks the ‘big questions’ that Taylor identifies*, and regularly visits Fast Company and HBR to read Hammonds’, Taylor’s & Corcodilo’s articles, this one super-human may be enough to drive this ‘HR-accountability culture’ downwards. In other –more realistic (?)– cases the leader may have to look to someone else to address the implementation of this human resources strategy; if so, why not an expert in strategic human resources?

A Blueprint for a Creative Workplace by Kate Rutter

What is better than a pretty info graphic to summarize a long –but valuable– article? Not much. Kate Rutter did a wonderful job of summarizing the key points from Dr. Theresa Amabile’s “How to Kill Creativity“, in the form of a one-page ‘blueprint’.

The article was originally published in the Harvard Business Review in September 1998, but don’t be fooled. The article is as relevant today as when it was written, perhaps even more so. — K . Rutter

I really have to agree vehemently here, while technology and business practices have since ’98, the basics of creating a culture haven’t.

The graphic –available as a high resolution download via the image above– illustrates three elements to creating a ‘creative culture’, namely:

• What creates the creative culture (expertise, creative thinking skills & motivation)
• What feeds it (challenge, freedom & resources)
• What supports it (workgroup features, supervisory encouragement & leadership support)

As the article and the graphic illustrate, a key element to fostering creativity and innovation in the workplace is motivation. The only major departure from our own philosophy would be to focus more on the intrinsic motivators for creating a creative culture (passion, interest & challenge), than the extrinsic motivators listed (particularly money). Make the graphic your screen saver for a while, and enjoy!