Business People in HR Have Something To Say

I was talking with a good friend yesterday about another good friend. All three of us have worked in the business world a long time (some longer than others). Friend number 3 (let’s call him Bob) is a topic of concern these days, because Bob doesn’t seem happy in his job. In fact he seems very, very unhappy with his job.

So I asked “Why is Bob unhappy with his job?” and my other friend said “I think he is finally coming to understand that just because someone is a business leader doesn’t mean that they know much about ‘business.’ In fact, I think he is coming to realize that most people in business don’t know anything about business. And so he is working with a bunch of people who know how to do their individual jobs, but that don’t know how to be a business person. And this means that he gets frustrated a lot because he thinks about business first and function second.”

I thought that was an interesting comment, and I started to think about recruiting and HR in light of this.

Let’s assume for a second that “C” level officers inside of companies know “business”, as in how to make a profit and / or return more value to the investors than they put in. This actually is a bad assumption, as numerous company failures show, but go with me here for a minute.

If you look at the executive suite in most companies it is made up of people who rose through the ranks in finance, marketing, sales or manufacturing / engineering. You rarely see someone from HR in the top spot.

The rationale behind this is clear: the language of business is finance, so it is logical that someone who speaks that language well will be on a career track to the top. And when execs talk finance, what they are really talking about is how to make more (or spend less) money, so it is logical that people who talk the language of marketing (“this is what people will spend money on and why”) and sales (“this is how I get people to cough up their dough better than my competitors”) have the next shot at the executive washroom. Then the manufacturing / engineering people come in and say “Nuts to all of that, you have to have something to sell in the first place, and you aren’t going to make any money if you don’t have something to sell,” so they have a track to the golden handcuffs, especially if they get the first two areas (finance and marketing).

And this is where I start to hear people cry, like Charleton Heston in Soylent Green, “It’s people! It’s all people!” You can’t count money, market or sell or even design without people. People are the core of everything in business. So if business = people and people = HR, then business must = HR (also known as the transitive property of equality in math lingo). But it almost never does. Why?

It's not that finance or marketing or sales or engineering people are more competent. Most finance people are accountants and just want to count change and have no pretensions to running the show. They don’t think about business, they think about AP, or AR, or GL. And if the way they think about that and do their job make it harder for the business to make a profit, or return value to investors, then big deal. That’s not their problem. They just make sure that the expense is journaled to the right account.

And so it is with HR. Most HR people don’t care about profit and loss or “business” – they care about their transaction and responsibility. The execs take care of business and the transaction agent takes care of “their stuff” and everybody is happy. So if most functions are filled with people who aren’t business people, why do more business people rise to the top in finance, marketing, sales and engineering than HR?

All functional areas have business people (again, people who understand how to make a profit and / or return more to the investors than they put in). Yes, even in HR. But the business people in the other functions typically spend their day talking about exciting stuff that will lead to more money, whereas the HR person typically spends their day talking about how to spend money, or spend less money, or how not to get sued. It’s partly a language problem, but it’s mostly a leadership problem. If every time the HR-business person stands up and says “Hey, I think this would be a great way to make millions more” the executives reply “That’s nice, but I have a board member up my rear about headcount reports, so go handle that first” it gets a little difficult to keep your eye on the business ball.

Frankly, execs are not looking for HR to deliver “business opportunities.” They are looking for risk and cost mitigation strategies. When a “C” level exec talks to sales and marketing they are looking for cool ways to make more money. When they talk with finance they are looking for ways to count money better, and when they talk with engineering they are asking about ways to make things that make them more money. These are all business discussions, and because you are more likely to have those discussions in the marketing, sales, finance and engineering departments, the people who want to have those conversations (the business people) get more of a chance to show what they are about in those departments than in the typical HR function.

In short, if HR wants to be “strategic” they first have to figure out how to have more discussions that the business people inside their organization can feel good about.

Comments

[Performance Management Software]

Thanks for providing a great resource for HR employees. I found a good option for employee performance managment software at GroteApproach. What are you thoughts on using 360 degree reviews through an online system or software?