Above-the-Line HR

"We are like books. Most people only see our cover, the minority read only the introduction, many people believe the critics. Few will know our content." - Emile Zola

Above-the-Line HR

Last week I had a great conversation with the founder of a small online B2C business that has been growing quickly over the past decade. The business started, literally, on his dining room table. He has grown it to about ￡25m in revenue with just under 100 employees. He has aspirations to double this over the coming 5 years and then probably sell. I have great admiration for what he has achieved so far and what he will no doubt achieve for the future.

The business currently has in place some administrative HR processes (unsurprisingly co-ordinated by his office manager: It so often starts here)

Our conversation was around what to do about HR as his business grows. The business currently has in place some administrative HR processes (unsurprisingly co-ordinated by his office manager: It so often starts here) with some outsourced specialist HR advice for when he has some tricky situations to manage. When I say tricky, this is mostly run-of-the-mill type ER stuff for larger businesses, but it is tricky for a smaller business. You know the thing – a maternity case, a request for flexible working, dealing with long-term absence etc.

?It was on this basis that he requested a chat. Going forward, how does he manage what he calls HR, and those of us in larger businesses or with an HR background consider to be just one part of HR?

these two very important aspects of HR only make up half of the picture

I always find it interesting when talking to the owners of small businesses about this topic. This is not a criticism, as they have no reason to know any different. But HR is usually considered by this size of organisation to be a combination of an administrative function and responding to employee relations matters. Broadly, these two very important aspects of HR only make up half of the picture. The bottom half, in fact, if you used Dave Ulrich’s model of HR as that picture.

First published back in 1996, Ulrich’s model split the role of the HR business partner into 4 fundamental areas, laid out on a 2 x 2 matrix. The two ‘below-the-line’ responsibilities of Administrative Expert and Employee Advocate (the two areas that my new friend and I were discussing) fill the bottom left and bottom right quadrants respectively. Together they form the Operational Focus for HR which, in the main, are reactive or responsive activities (this isn’t completely accurate but a simplified description for our purposes). For the majority of smaller organisations, this responsive or ‘below-the-line’ activity is exactly what is required.

as organisations and, in particular, headcount grows there is a need to start considering ‘above-the-line’ HR activity

However, as organisations and, in particular, headcount grows there is a need to start considering ‘above-the-line’ HR activity. And this is the direction that our conversation took.

Above-the-line HR activities, referred to as the Strategic Focus, pivot from reacting to immediate issues to proactively envisioning the future. The two HR partner quadrants above the line are the Strategic Partner (top left) and the Change Agent (top right).

The Strategic Partner collaborates closely with the leadership to align HR strategies with the broader business goals. In essence, they become the crucial link between HR and the organisation's strategic vision.

On the other hand, the Change Agent drives transformations within the company by initiating and managing change projects, ensuring that HR plays a pivotal role in facilitating the shift.

The crux of our conversation was about the need for this small, growing business to transition from the reactive, ‘below-the-line’ HR activities towards adopting a more proactive, ‘above-the-line’ approach. (Note that I say “more proactive” – there will always be a need for reactive capability, and it is important that the shift doesn’t go so far that it causes different challenges for the organisation).

It's the kind of shift that often marks the turning point for businesses on the fast track to growth

It's the kind of shift that often marks the turning point for businesses on the fast track to growth, as they evolve from managing HR as an operational necessity to strategically harnessing HR's potential as a driver of future success.

The question of how to become more ‘above-the-line’ was our next discussion point. This transition does take work, but more importantly, it takes good thinking. It is very likely, as was the case here, that the office manager turned HR administrator does not have this capability. And the outsourced HR support company are specialists at the important ‘below-the-line’ stuff – strategy is usually not their forte.

Often at this stage a small business will appoint its first HR leader. This new role will need to be budget-friendly, so they will typically attract high potential but low leadership experience. People who, with the right support around them, will have stunning HR careers but haven’t yet had their first leadership role. And this is great for both the organisation and the individual because of the runway and speed of growth ahead of them.

But it does come with one problem. Who helps the new HR leader develop their thinking? A good HR professional will have a positive attitude to self-development – they will read, take courses, build a network around them to tap into. But this won’t necessarily provide the focussed attention to create a roadmap that is truly fit for purpose for the organisation. And the founder and other members of the leadership team will likely be even more inexperienced in this topic.

The solution? A mentor. The founder and new HR lead should find a mentor who can independently steer both parties through this maze. They can help them focus in on what’s important and ignore unnecessary noise. They can simplify and ensure that the organisation as a whole can get on the same bus.

It’s inevitable that smaller, fast-growing organisations will, at some point, hit a significant bump in the road that will be related to its people capability

It’s inevitable that smaller, fast-growing organisations will, at some point, hit a significant bump in the road that will be related to its people capability. The ones that address this in the right way will accelerate their path through it and beyond. The ones that don’t with either stick at that point or, if they manage to keep going, face even more challenging times ahead – fixing people capability in a 100-headcount business isn’t easy, but it’s very doable. Fixing it once you’ve reached 2,000 people is a very sizable task.

Model of the Week - Group Decision-Making

There's a sweet spot between "many hands make light work" and "too many cooks spoil the broth". It's not the same for every situation, but how much consideration do you make for the right size of decision-making group in your organisation.

Do you have a group that is too small (or maybe not even a group) and miss out on the diversity of perspectives that will make the decision as good as it can be? For example, are decisions made around a meeting table without input from the people that will be affected by it?

Or do you seek input from everyone, and risk turning a horse into a camel to accomodate and appease all?

Top Tip: Before You Speak, T.H.I.N.K.

Before you speak use the acronym T.H.I.N.K.

T - is it TRUE?

H - is it HELPFUL?

I - is it INSPIRING?

N - is it NECESSARY?

K - is it KIND?

Other Stuff

• What a thrilling quarter-final weekend for the RWC. Only one northern hemisphere team remaining - will they still be there after the semi's? I'm so pleased that I have South African friends!
• There's still time to register for my FREE webinar on Thursday this week at 11am. The topic is How to Fast-Track Your Team to High Performance. You can register here.
• We've finally folded, and turned the heating on. Is anyone else still holding out?

Contemplative Cartoon