7 Lessons Learned From The HR Business Partner Model

Part 1 of 2 articles on state of the HR Business Partner model. For Part 2, click here.

(Written with Wayne Brockbank of the Ross School of Business at the University of Michigan.)

We have observed, studied, and shaped the business partner model through rigorous empirical research and extensive work within specific organizations. We have done 7 rounds of the HR Competency study which study the competencies of HR professionals and the capabilities of HR departments. The most recent (2016) data collection was a collaboration with 22 HR associations around the world and 32,000 respondents (see forthcoming book Victory Through Organization).  We have personally been involved in over 100 HR Transformations where we assess and advise how to be a better business partner. Based on these data, this essay reflects on what we have learned about the relevance of the business partner model.

Looking back: Seven lessons learned about business partner model

First, the business partner model is not unique to HR

All staff functions are trying to find ways to deliver more value to either top line growth and to bottom line profitability. Information systems, finance, legal, marketing, R&D, and HR are all under scrutiny and pressure to create greater value for their companies. This is especially true of transaction and administrative work that can be standardized, automated, re-engineered or outsourced. 

Second, the intent of the business partner model is focus more on deliverables (what the business requires to win) than doables (what HR activities occur).  

We have seen four phases of deliverables, moving from administrative efficiency to functional excellence to strategic HR to HR outside in (see book HR Outside In). Instead of measuring process (e.g. how many leaders received 40 hours of training), business partners move to measure results (e.g. the impact of the training on business performance), then move to how training build external value with customers and investors. For example, when HR builds better leadership capital, investors have more favorable images of the firm which shows up in market value (see Leadership Capital).  

Third, being a business partner may be achieved in many HR job categories.  

As business partners, corporate HR professionals define corporate wide initiatives, represent the company to external stakeholders, meet the unique demands of senior (and visible) leaders, leverage cross unit synergy, and govern the HR function. Embedded HR professionals work as HR generalists within organization units (business, function, or geographic). They collaborate with line leaders to help shape the business strategy, conduct organizational diagnoses to determine which capabilities are most critical, design and deliver HR practices to accomplish strategy. HR specialists work in centers of expertise where they provide insights on HR issues such as staffing, leadership development, rewards, communication, organization development, benefits, and so forth and they advise business leaders and HR professionals on how to turn insights into impact. HR professionals who work in service centers add value by building or managing technology-based e-HR systems, processing benefit claims and payrolls and answering employee queries. These individuals may work inside or outside the company. 

Fourth, HR professionals as business partners have unique information, insights, and recommendations to deliver competitive advantage. 

In formal and informal business discussions, each staff group brings unique insights to drive business results: finance talks about economic performance with information about revenues, costs, and financial returns; marketing discusses customers with recommendations on targeting key customers, customer response (e.g., net promoter score), and customer connection; operations makes recommendations and systems, quality, and supply chain. When HR partners in these strategy discussions, we propose that they provide insight, information, and recommendations on:

• Talent. HR professionals are centrally involved in providing the right people with the right skills in the right job at the right time. Talent insights capture future competence as well as commitment and contribution. Upgrading the employee experience has been a long term important part of being a business partner (see Why of Work)
• Leadership: HR professionals help prepare not just key individual leaders, but the collective leadership throughout the organization. They ensure that leaders have the knowledge, skills, and abilities to meet future demands and align with customer expectations (see Leadership Brand).
• Organization capabilities. HR professionals partner with line managers to identify and create organization capabilities such as speed/agility, innovation, , risk, collaboration, information leverage, culture/shared mindset, accountability, and efficiency. These capabilities become the identity and personality of the organization.  

As business partners, HR professionals provide analytics, insights, and recommendations on talent, leadership, and capability to deliver business results and to serve all stakeholders. 

Fifth, as talent, leadership, and capability issues increase in business relevance, HR professionals may help respond by being both architects and anthropologists. 

As architects, HR professionals design, blueprint, and facilitate investments in talent, leadership, and capability. As architects, HR brings what is called structured information where the information is in a spread sheet which allows for traditional quantitative statistical analyses to find trends. As anthropologists , HR professionals increasingly look beyond the borders of the organization to identify what external stakeholders (customers, investors, communities, regulators) and what business trends (social, technological, economic, political, environmental, and demographic) will shape future business success.  In this case, HR often sources unstructured data where they use qualitative insights to anticipate trends.  

Sixth, as with almost any change, we have seen an inevitable 20-60-20 pattern for HR professionals to fully adopt the business partner opportunities. 

Twenty percent of HR professionals get it, do it, and act as business partners. Twenty percent will unlikely ever get there for a host of reasons (e.g., personal inability, lack of desire or organizational lack of support) and 60% are learning and moving in the right direction.  While we see the HR profession moving in the right direction, some may never make it. Sometimes, critics of HR like to focus on the lingering 20% laggards and claim that HR professionals have not improved. This is as inaccurate as focusing on the 20% innovators and claiming HR has fully arrived. The business partner model is empirically supported and more of the 60% are making positive progress. A decade ago there was a clamor to “get to the table” and to become part of the business. Today, most effective HR professionals are already at the table and they need to be clear about how their insights on talent, leadership, and capability will deliver business results.

Seventh, being a business partner requires HR professionals to have new knowledge and skills. 

There are many efforts to determine the competencies for effective HR professionals. Through the University of Michigan, the RBL Group, and partners throughout the world, we have spent 30 years studying (theory, research and practice) how competencies for effective HR professionals drive personal effectiveness, stakeholder results, and business performance (which will be reported in books, articles, and posts).  

In Summary

HR professionals must evolve into being the best thinkers in the company about the human and organization side of the business. The nature of business is dramatically changing. Changes are occurring in virtually every element of the social, political, and economic environments that impact business. Under such conditions, the human side of the business emerges as a key source of competitive advantage. Therefore, HR specialists in the logic, research, and processes of human and organization optimization become central to business success.

Many HR professionals are doing exceptional HR work. From ING in Hong Kong, to ICICI and TATA in India, to ADIA in the United Arab Emirates, to MTN in South Africa, to DHL and BAE Systems in the UK, to Arcos Dorados and América Movil in Latin America, and to Walgreens, Intel, and GE in the United States and in thousands of other companies around the world, HR professionals are making enormous progress towards delivering value as business partners. In the next article post, we will look at the future of the HR business partner model.