Principles of Talentism: Part 7 - Finance before HR

I have ripped into this so many times in this blog (here and here and here   and even here - yes that was me - thanks Jason) that I will try to make this short and sweet:

When talent is more valuable than capital (i.e. when the perceived potential return from people is greater than the perceived potential return from money) then HR is more important than finance.

As I said here, finance should be business through the lens of money, while HR should be business through the lens of talent.

The fact that HR is a distant second to finance in the boardroom and the executive suite is due to the following factors:

1. The finance person is the only one who can crack "The Wall Street Code."
2. HR keeps talking about entitlements, liabilities and regulations. In other words, HR keeps telling the CEO how they are going to fail, while finance keeps track of how the CEO is succeeding.
3. Since the sin non qua of business is profit, and profit is money, finance talks business.
4. Since the HR can never seem to talk business about anything, the side-by-side comparison becomes glaring: money versus people means business versus social work, which translates into success vs. failure.
5. Therefore HR versus finance is no contest, no matter how bad finance is at their job.

The strategic advice offered here is a way to get HR to a point where it can be an equal to the finance function. When Wall Street starts evaluating the risk of future return against the execution of the talent function inside a company, the coup will be complete.

Next: Markets, not Managers (my favorite!)