I’m always stunned when I hear a senior business leader say that their head of HR isn’t one of their key advisors; that the head of HR is often not at the senior executive table when major strategic or market initiatives are being discussed.
And yet, in most organizations, human resources are both the largest expense line in the profit and loss statement and the most mission-critical resource: it is only with good people that ANYTHING of business value gets done. For this reason alone, there should be a senior HR professional at the table for every strategic discussion.
So how can it be that in so many companies, the senior HR professionals get relegated to the kids’ table when the main meal is being prepared and served? Why are HR issues too frequently an afterthought? The reason for this comes from both sides; business line executives often feel HR professionals spend too much time on process and analysis and not enough on understanding and creating strategic impact; and HR professionals historically have not been trained or encouraged to find the necessary business skills to identify that impact and talk about it in language that excites and engages business leaders.
We have to earn our way to the table. Yes, it is critical for our own careers, but more importantly it is imperative for the business. Outlined here are five strategies that any HR professional can employ to make themselves so relevant to the business and so engaged in its success that senior executives will demand that they are invited to join the senior executive team.
1. Understand your customer’s customer
To connect our value to what is most important to our customers - the senior executive team in our organization – we need to deeply understand our customer’s customer. What is happening in their market? What pressures are they under to differentiate themselves from the competition in their customer’s eyes? What kind of skills will they need to achieve that differentiation? Dave Ulrich, in his excellent book HR From the Outside In: Six Competencies for the Future of Human Resources, talks about the need for HR professionals to reverse the way they view the world, to go outside and understand the motivations of customers, regulators, industry groups and competitors. (As a note, Ulrich’s book HR From the Outside In: Six Competencies for the Future of Human Resources forms the heart of the Queen’s IRC Advanced HR program.)
By going outside the business and looking back in from the customer’s point-of-view, we can directly connect to the challenges our business line executives are facing in forming and executing a winning strategy. With this knowledge we can then shape and focus the value we deliver to help our customers differentiate their offerings and capture and retain their customers. By doing this we earn the right to engage in the strategic discussions that take place at the senior table.
2. Learn how to “sell” your value
The challenge for any executive in today’s business environment – this applies to CIO’s, marketing directors, compliance and risk officers, product heads and CFO’s in addition to HR professionals – is that there are more good projects to consider for investment than there are budget dollars to fund them. To be relevant, we need to be able to show how any initiative we propose will directly improve the business. We need to “sell” our ideas, and to sell them we must connect them directly to one or more of three key business drivers.
- How can this investment help to grow revenue?
- How can this investment reduce or help to better manage our costs?
- How can this investment help to better manage our risks?
Revenue. Cost. Risk. To be relevant, to be invited to the senior table, we need to ensure that any idea we propose connects directly to one or more of these areas. To do this, we need to understand how money is generated, how it is spent and what risks are involved in creating a profitable, competitive company.
3. Answer First
In discussing or presenting an initiative, start by showing the answer. Get to the point – immediately! And then backfill information as it is needed or requested. There is a story that when Jamie Dimon, current CEO of JPMorgan Chase, went to Bank One to be their new CEO, the weekly management meetings went on for hours and hours (8 hours was the number I heard when the story was relayed to me). Mr. Dimon is a driver, confident in his own knowledge and comfortable making decisions; these meetings drove him crazy.
So he implemented a rule that was called “Answer First”. Any executive making a presentation had to summarize his or her presentation on one cover page, including the relevant numbers. If the one page story was enough, the executive team made their decision and moved on. If they needed more information, the presenting executive was asked to present more. The meetings went from 8 hours to 2 hours. The point is that senior executives can process information very quickly – they “get” it – without needing extensive details. Remember, they aren’t buying a 40 page PowerPoint deck or 100 pages of detailed research – they are buying a compelling business argument backed by realistic financials. Make the concise argument. Back up your argument with relevant research and realistic financial numbers. Do the research and analysis and have your backup material ready, but don’t turn the telling of the story into a painful, mind numbing experience.
4. How do we get from here to money?
In most HR change initiatives, we are asking senior executives to invest in a change that will bring strategic benefit to their business. To earn this investment, we must be able to show the key decision makers how the organization or department will get from here to the point in time when their investment reaps the predicted returns. How do we get from here to money? This is an act of imagination – and it is an act we can’t assume our executives will make or will make well enough to see the full benefits and green light our project. We have to show them – succinctly – how the change will take place, when the investment will be required, when they can expect a return on that investment and how the risks of implementation will be managed.
5. Change the Conversation
To look at HR value through a business lens requires a mindset shift. To achieve this shift we need to change the way we think and talk about our work - we need to change the conversation. And the first conversation we need to change is the one in our heads. We need to think about what we do in terms of ultimate value to the business and - wherever realistically possible - translate that value into hard dollar financial terms. This conversation must be the start of our approach to any problem or project: What is the business problem? What financial measure or risk mitigation practice am I working to improve? How can I plan and implement this change that gets us from here to money with the greatest speed and the least risk?
Secondly, we need to change the conversation with our teams. When we are discussing, researching, defining and preparing our arguments we need to challenge each other to define the business impact and to express it - Answer First! - in succinct business terms and financial numbers.
And finally, we need to change the conversation with our senior executives. Even if we don’t have strong numbers, we need to be willing to talk about the numbers, about business impact, about their stakeholders, about how their strategy can be strengthened and the implementation times shortened. We need to change the conversation – in our head, with our team, and with our customers.
Companies and organizations of all sizes and shapes need senior HR professionals at the senior executive table. With the coming shifts in demographics and the endlessly accelerating need for better technical and business acumen and skills, there is a chair waiting at that table to be filled. Take the challenge – make yourself relevant and engaging; execute these strategies to show the full impact that you and HR can have on your business.
About the Author
Jim Harrison is an international consultant focused on strategy, sales and talent management for mid-sized to large organizations. He started his career in financial services, working as a money trader for RBC/Dominion Securities. He has over 27 years’ experience in consulting, training, and executive coaching. Jim is a facilitator on the Queen’s IRC Linking HR Strategy to Business Strategy program. He also works with clients in North & South America, Europe, Australia, and Asia, and regularly facilitates strategy and training sessions for such well-known companies as IBM, Accenture, PwC, KPMG, Fuji, AGFA, the Toronto Dominion Bank, Deutsche Bank, and HSBC. He received his B.Sc. degree in Finance from Florida State University and a Master’s Degree in English from the University of California, Irvine.
Ulrich, D., Younger, J., Brockbank, W. & Ulrich, M. (2012). HR from the Outside In: Six Competencies for the Future of Human Resources. New York: McGraw-Hill