Comments on: December 2005 Insight Newsletter

By: Dave Crisp

Dave Crisp — Tue, 18 Aug 2009 21:47:12 +0000

Thanks again, JR.
I agree. Most large (as well as quite a few small) companies don’t have the culture to support a lot of creative program implementation via internal people and so it is easier to bring in ‘weighty’ consultants. A company like Toyota has a history of constantly innovating from inside and proves it can be done very effectively, but such companies are rare. Part of highly effective HR strategy is to help establish a leadership climate in which that sort of constant evolution is the norm rather than a one-time, politically difficult ‘who invented this’ exercise. Your view of why HR is so constrained or ineffective in many companies poses an interesting question that bears further thinking. Its positioning of having to act as a ‘neutral’ in many administrative situations may well contribute to the perception that it can’t be effective at driving a particular strategy – too ‘wishy-washy.’

By: JR

JR — Tue, 18 Aug 2009 20:07:20 +0000

David, part of what you’re echoing is the difference between consulting and let’s say administration. An HR dept in a strategic consulting role, in many ways, isn’t a whole lot different than what some strategy firms like Mercer, Cap Gemini, McKinsey, etc provide to the Fortune 1000. The reason why executives go to outside MC firms, then to some experienced internal program chief, is that it doesn’t rock-the-boat politically. In a sense, some of the failed Total Quality Management initiatives of the 80s was due to the fact that it was a leadership role, outsourced to a consulting firm, than incorporated into the actual administration of the company itself. I don’t believe TQM, in itself, was a failure, just the way it was wrongly implemented.

All and all, perhaps the real issue is that authentic leadership is easier to garner in an startup/entreprenuerial enterprise than a mid-cap to large company where political alliances play a greater role in one’s career advancement. And given the essence of hierarchies, the HR dept would most likely have the least affect of the major cost centers in the corporate spectrum since being the most neutral while administratively constrained unit, maintains the balance of power.

By: Dave Crisp

Dave Crisp — Mon, 17 Aug 2009 22:08:21 +0000

Thanks JR. Your thinking echoes a lot of observers who see the administrative need (and it isn’t all outsourced, but that’s purely a cost decision as to whether it’s cheaper inside or out). Yet there are a good many who also see a strategic function for HR as in finance where accounting can be outsourced, but there’s still a role for a strategic CFO who balances the needs and objectives of the financial aspects of the business. Engaging employees, getting the best from them and so on is a leadership function. Unfortunately a large number of people appointed to leadership positions aren’t given the training nor do they often have the experience to make them good at these. HR, if it’s operating well and designing correctly, can help ensure the organization’s culture or habitual behaviour (what’s tolerated, what’s encouraged) sets the tone that makes it easier for managers to do the right things to achieve engagement and commitment from staff. That’s a set of strategic decisions – what should that culture look like to fit the specific business it’s guiding? That’s considerably more important and complex than the admin parts.

By: JR

JR — Mon, 17 Aug 2009 21:20:22 +0000

–Clearly the value people in organizations can add is higher than the value-add of any other component. And virtually every company maintains an HR department to assist. Why?

There’s an implicit linkage here between contributing employees and the value added to them, via HR. This is yet to seen, as a causality. In many companies, there is a need for an administrative unit which tracts the now, outsourced activities of recruiting, payroll, heath care admin, 401K management, and an educational cost ctr. Since these aforementioned activities are handled by other 3rd party vendors and perhaps a few internal depts (like training/educ), the function of HR is to mainly be an overseer and perhaps at best, an auditor for the sake of CFO tracking.