HR MATTERS JACK BUCALOCHIEF HR OFFICERS always desire to be an equal business partner to their line executive peers and they feel that their job title should entitle them to that status. Such status cannot, and should not, be handed to them. In most companies, they must EARN it. Recently, the use of HR analytics has been the means that some CHRO’s are using to try to achieve it. However, the use of HR analytics is found solely in large companies who can afford such an expensive venture. Meanwhile, there is a much quicker and effective way to EARN that status.

If H. R. leaders REALLY desire to have HR connect with the company’s business objectives and strategy, there is a way to do it. However, you must temporarily take off your HR hat and put on your business person’s hat.

The first step is to have a lengthy meeting with your CFO to understand the key numbers in: (a) the company’s latest Income and Cash Flow Statements, and Balance Sheet and (b) the company’s current financial priorities. Second, meet with the COO to understand the key operating priorities and business objectives of each major division or group. Thirdly, meet with the CEO to clarify the business strategy for the company and each of its major divisions or groups.

Now, you are ready to connect the company’s business objectives and strategy to your HR resources, recognizing that you may have to realign some staff to do it. The examples below illustrate how.

OBJECTIVE: Improve earnings per share from “X” to “Y” $/share and increase cash flow by “Z”$.

Human Resources

  1. With Finance, implement a Cost Control/Productivity Improvement Workshop to identify potential profit improvement opportunities.
  2. With Inventory and Manufacturing, implement an Inventory Reduction Workshop to identify items
    that can be eliminated, reduced or replaced by less expensive items.
  3. Train Sales personnel how to collect outstanding receivables to bring in more cash.
  4. With Engineering and Marketing, implement a Product Innovation Workshop that identifies product innovations which can gain market share, reduce product cost and use more efficient technology.
OBJECTIVE: Improve the market share of the company’s main product line from “X” to “Y” % by acquiring a business that utilizes a new technology that currently does not exist in the company.

Human Resources

  1. Develop a plan to support the new business regarding recruitment, salary and management incentive compensation, sales incentive compensation, technical skills development, performance appraisal, innovation recognition, etc.
  2. Develop the knowledge data base to evaluate the due diligence data uncovered on each potential acquisition candidate from an H. R. perspective.
OBJECTIVE: Develop about 50 business unit presidents to possess sound general management skills while operating a $50 million or larger business.

Human Resources

  1. With a top tier business school, develop an Executive Management Education seminar that covers Strategic Market/Product Planning, Financial Management, Product Development, Customer Retention, and Leadership Development.
  2. Enhance the Succession Planning program to ensure that all succession candidates have an annual Personalized Development plan that is approved by the CEO.
  3. Update the company’s executive compensation strategy for stock, incentive comp and salary.
OBJECTIVE: Improve the customer service image of the company to exceed future industry standards.

Human Resources

  1. With Customer Service, survey outside and company service experts to catalog the key service principles needed to drive the new image campaign.
  2. With CS management, survey appropriate top management executives to determine the industry CS requirements for the next two to four years.
  3. Develop the new service principles and requirement for top management review and approval.
  4. Assess the skill levels of all CS personnel in relation to the new service principles.
  5. Train appropriate CS personnel on the new service principles, including any shift to generating new sales revenue from each customer service interaction.
  6. Establish on-going workshops designed to continually improve CS innovation.
OBJECTIVE: Increase sales revenue for product “X” by 15% through the introduction of new technology.

Human Resources

  1. With Sales, update the product’s Sales Incentive Plan to recognize the technology and its profit impact.
  2. Assess the competency level of all Sales personnel in the new technology and retrain as needed.
  3. Assess existing recruiting sources and identify new ones.
OBJECTIVE: Reduce the time-to-market of product “Y” by 25% to exceed current industry standards.

Human Resources

  1. With Engineering and Marketing, implement several task forces to reengineer and streamline the entire design and launch cycle, while synchronizing with key quality and manufacturing checkpoints.
  2. Retrain management personnel on the key changes before implementation.
  3. Implement a Project Management Workshop to help ensure that the reengineering project and subsequent product development projects are achieved on time.

Each CHRO will have to determine if he/she wants to accept the difficult challenge of connecting with the company’s business objectives and strategic plan goals, and thereby bringing HR into its operational mainstream or just remaining as an administrative afterthought.


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Jack Bucalo
JACK has led the Global HR function for a Fortune 500 and 1000 international company and several other large international companies. With four years of line experience complementing his HR experience, he believes that the CHRO or HR Leader should play a more direct role in helping the CEO to achieve the company's business objectives and strategic goals, while effectively implementing its administrative duties. In doing so successfully, the CHRO or HR Leader can become an equal business partner with his/her line management peers while becoming more directly involved in the company's operational mainstream, rather than being just an administrative afterthought. As a pragmatic practitioner, Jack publishes detailed and actionable articles on a wide variety on critically-important HR issues on BIZCATALYST 360°. He is also on the advisory board for other web sites. Jack's over 20 years of executive-level HR experience for which he was responsible for company, executive and Board-related matters, form the basis for most of viewpoints.
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Adina Jaffee

Jack Bucalo’s pure business-oriented vision of Human Resources and his words are like a big glass of fresh iced-water for a thirsty profession. Now, more than before the crisis, HR contribution to the company’s profit became extremely visible in the strong lights of the business stage and cut-costs strategies. Now there is no place to hide anymore and yes, HR must bring money on the table like every other department. Of course we will hear that the people hired, trained and motivated by HR are bringing the money and that including top management had been hired, trained and motivated by HR, due to CEO’s directives. I agree that HR must be present in and understand all the other departments’ strategies in order to deliver business-relevant and in due time HR solutions. Some CEO have regular weekly business meetings with all top managers and talk business, that is it why MBA is a plus in a manager’s portfolio, not just as a diploma in a frame hanging from the office wall. Other companies value HR Partners contribution. In reality, HR solutions must be developed based only on present business needs and labor market condition for short-medium-long term. In my opinion, a HR Manager can become a business partner if he/she has great business diagnosis skills and if he/she knows what to do with the information he/she gets. I have seen HR Managers so business oriented, that they had became CEO themselves. I also have noticed this phenomenon in the last 8 years of appointing managers from other departments as HR Managers, at least for few years. Jack, the scenarios and the clear simple steps HR should take in every case are remarkable because of their complex simplicity and objectivity.

Jim Watson
Jim Watson

Jack, I like the pragmatic approach you recommend in this article. There’s nothing like “beginning with the end in mind” to more directly impact what ever it is you’re trying to accomplish. In this case, it’s building your HR initiatives around the business goals.
Thanks,
Jim

Anonymous
Anonymous

Jim, thanks for your kind words. Now, if we can just get CHROs to buy into the pragmatic side of their business, rather than staying exclusively on the administrative side. Jack