I had the good fortune to hear Ram Charan give the opening keynote address at our national convention in Melbourne last month. Charan is a widely respected international adviser to boards and chief executives, and in recent times he has turned his mind to HR, in particular to the role of chief human resource officer.
In association with McKinsey’s Dominic Barton and Korn Ferry’s Dennis Carey, Charan wrote an article in the July-August Harvard Business Review, entitled “People before strategy: a new role for the CHRO.”
The authors start with the premise that CEOs understand the proposition that “businesses don’t create value; people do”, and for that reason they depend on HR. In their next breath, the authors cite research by McKinsey and the Conference Board showing that CEOs rank HR as “only the eighth or ninth most important function in a company”, a verdict that appears to fly in the face of a consistent finding, which they also cite, that CEOs from around the world “see human capital as a top challenge”.
I take a couple of things from those apparent contradictions. The first is that these findings from observers outside HR are sending a message about the opportunity that is being presented to the profession. The CEOs are saying they need HR to perform well and to be effective. The second take has to be that CEOs are disappointed. It is hard to avoid concluding that the reliance they want to place on HR to achieve results is not being met by a commensurate HR performance.
As it so happens, AHRI has been doing its own Australian research in the same area. During the first half of this year, we began working with our survey partner Insync on measuring ‘inside HR’ data – that we took from our 2014 research – against some ‘outside HR’ data derived from the views of Australian CEOs and public sector senior executives.
The ‘inside HR’ data resulted in 10 attributes that HR practitioners believe to be fundamental HR skills and behaviours. In no particular order, they are as follows: influencer, credible, collaborative, courageous, resolver of issues, solutions driven, professional, critical and enquiring thinker, and the capacity to understand and care.
Around half of the survey respondents were CEOs and executives, and the other half HR practitioners. The responses reveal two interesting results: One is that on seven of the 10 attributes, the CEOs and executives gave ratings of six or higher on ‘importance’. On all 10 attributes, they rated ‘performance of HR’ lower in the 5s and 4s.
While that might sound somewhat dispiriting, it has an upside: the corresponding HR practitioner view on ‘importance’ rated nine of the 10 attributes at 6 or higher. However, all the HR practitioner ratings on ‘performance of HR’ were likewise appreciably lower.
What that tells me is that Australian HR practitioners do not lack insight with respect to their own performance, and are largely on the same wavelength as their CEOs on the potential importance of what they do. The gap, then, is not what the HR practitioners ‘know’ about their role; it turns on what they actually ‘do’.
And that is the central reason why AHRI has set in motion the certification initiative I have been writing about this year. The primary aim of that initiative is to enable HR practitioners to objectively demonstrate what they can ‘do’, so as to enable AHRI to confidently inform the leaders of business how they can find those practitioners.
HR certification is a long road and this is not the last you will hear of it. I invite you to keep listening and to join us on the journey.
This article is an edited version. The full article was first published in the September 2015 issue of HRMonthly magazine as ‘Bridging the gap. AHRI members receive HRMonthly 11 times per year as part of their membership. Find out more about AHRI membership here.