Is HR on the OUTER in your business? If so, here are 3 ways to fix it

Over the course of my consulting career I’ve walked into organizations where HR was seen as integral to business success and a key member of the leadership team. However, I’ve also stepped into companies where HR was on the outer – brought in late to crucial conversations and left out of critical business decisions. In these firms I heard examples of HR being defined as outside or separate from “the business” including:

• In a Succession Planning meeting at a bank, the executive team discussed moving a talented individual out of HR and "into the business”.
• In an induction program at a professional services firm, the presenter spoke about how “HR people” worked with “business leaders” in the organization.
• At an infrastructure company a HR professional described himself as the “fixer-upper” when things went wrong “in the business”.  

I’m now working within HR and I see that, despite all the good work to progress the function, some HR folk are still receiving a message that they sit outside the boundary of the business. If you feel you are on the outer in your business right now how might you bring about a change? Here is a story from one of the firms I've consulted to that illustrates how you can move from an “outsider” to a business “insider”.

Kelly Austin, you need to add more value!

“Pete Fernandez”, the Head of HR at the consumer goods company “DreamBrands”, was worried about one of his HR managers. “Kelly Austin” had heaps of potential – she was super smart, energetic, and willing to learn. However, at every performance appraisal Pete seemed to get the same feedback from line managers “We love Kelly, but she is not really adding as much value as we would like to see.”

Pete knew that Kelly was in the role of “order taker” where she was often left out of key business meetings and got handed the instructions afterwards. He mulled over how he could help to change this situation and finally decided to send Kelly on an intensive training course for HR professionals.

The day before the program Pete encouraged Kelly “You’re ready to take a step up and add more value to the business! Now’s the time!”

The week after the training Kelly bounded into Pete’s office brimming with ideas, “Thanks so much for sending me on the training program Pete! It was terrific! I now have so many best practice tools, frameworks, and templates that I’m sure I will be able to add more value.”

Kelly's big value-adding idea

A few weeks later Pete called Amanda, the leader of the BrandZ business unit where Kelly worked. “How is Kelly going now that she’s completed the HR training course we talked about?” Amanda sighed and there was a long pause on the line before she finally said “Sorry Pete, but it doesn’t seem to have made much difference. For instance, just this week Kelly emailed the leadership team a competency framework with a long list of skills to tick off. I really didn’t see the relevance and most of my team have ignored it.”

Kelly’s reframe as a business leader

Pete was perplexed. Despite the best HR training, Kelly was still not adding the value that he knew she was capable of delivering. Pete decided to take a different approach at their weekly catch up and asked, “How do you see your role in BrandZ?” Kelly’s face lit up as she responded, “I’m part of the HR team bringing best practice HR tools and thinking to the business.”

Pete nodded slowly and leaned forward in his chair with a follow-up question “Can you tell me about BrandZ’s key financial targets for this year – you know the revenue, NPAT, and EBIT targets and how you are tracking in meeting those?” Kelly glanced down at her notepad, and admitted in a low, unsteady voice “I don’t have that information.”

During the meeting it suddenly struck Pete that Kelly was framing her role as a HR specialist who was sitting on the sidelines of the business.

Pete realised that he would need to help Kelly change how she was framing her role in order to deliver more business value. He explained “You are a business leader as well as an HR specialist. You have a seat at the BrandZ leadership table and your role is to help solve the complex, adaptive challenges the business faces in delivering to customers and in creating the next wave of growth.” Kelly’s eyes widened as she listened, “Oh I get it” she said, “I need to reframe my role!”

The BrandZ change plan

Kelly met with the BrandZ finance analyst to learn more about the financials and organized a meeting with her boss Amanda for later that week. She kicked off the conversation, “Amanda, I understand that we are aiming to grow the BrandZ business by 10%+ this year and that we are currently tracking at a 5% growth rate. If we are to meet the double-digit growth aspiration and deliver great products to our customers what people challenges do you see ahead?”

Amanda raised her eyebrows “Great question Kelly! Well let me tell you what’s worrying me right now! I need more capability in the marketing team to move from insights to powerful, eye-ball grabbing campaigns. I want us to better manage the culture issues in the factory that are impacting on product quality. And longer term, I need to ensure that we have a pipeline of great talent coming through from the middle ranks. Those are the things that are keeping me awake at night!”

Kelly went away from the meeting with Amanda with a clear picture of the business issues and needs. Within a fortnight she had prepared and presented a BrandZ Change Plan to the leadership team with her recommendations for dealing with the people challenges ahead.

Amanda called Pete to say “I don’t know what you’ve done but it’s working! Kelly has come up with a brilliant plan to help reach BrandZ’s business goals for the year. And you know what, I think we can get there!”

Are you on the outer? Here are 3 ways to begin to fix it

Are you working in a company or team where you are positioned on the sidelines of “the business” (maybe along with other enabling functions such as IT, Finance, Procurement, Safety)? Do you feel like you’ve been excluded from important meetings or perhaps you're in role of “order taker”, given the list of things to do after the decisions have been made? Do you wish things were different? The change from “outsider” to “insider” can begin with the following 3 steps: 

1. Take up your commercial role

Change must invariably begin with you. The most successful HR professionals see themselves as part of the business and take up their commercial role. Kelly shifted from seeing herself as a HR specialist to stepping into her role as a business leader who brought HR expertise to the table to solve real business problems.

Three months later Amanda caught up with Pete for a coffee and told him “Kelly has taken another step up! She is now helping us to deal with the rapid changes we are seeing in the external environment and to navigate change faster, especially our move to digital.”

Kelly had brought adaptive skills to the leadership table to help the team navigate in a time of unprecedented change for BrandZ.

In your role how can you find ways to get closer to the commercial side of the business – for instance, asking to join the regular leadership team meeting, researching how the business is tracking in terms of its financial targets or sharing your improvement ideas? Remember, HR’s expertise can help drive more business value in a VUCA (Volatile, Uncertain, Complex, Ambiguous) world and move you from an “outsider” to an “insider”.

2. Frame HR as part of “the business”

Change begins with refusing to collude with this pattern of separation and in not allowing HR to be defined as sitting outside "the business". Tune into how you and others are describing HR's role within your company. For instance, I recently heard a HR colleague comment “We’ve developed a training solution that I think will add value to the business.” Instead of accepting this statement I responded “We are all part of the business. Do you mean that you’ve built a solution that will add value to that particular business unit or function?” The opportunity for change exists in each conversation and in how we choose to frame the role of HR.

3. Move from partnering to leading

I had been explaining to Pat Houlihan, my boss and CEO at DuluxGroup, my bugbear about how HR (and other enabling functions) were positioned as separate from “the business” in some companies. Pat had always seen the importance of the HR function but as I spoke he nodded his head, tapped his fingers together and said “You know, we need to take the next step here at DuluxGroup. We don’t define Manufacturing, or Sales, or Marketing as ‘Partners to the business’, so why should HR or other support functions be labelled in this way? They are part of the business and contribute just as much to the success of the company as others.”

Later that month, at the DuluxGroup leadership conference, Houlihan stood in front of the company’s 180 executives and declared “You are all business leaders, no matter where in the company you come from – Supply Chain, R&D, Marketing, Sales, HR, Finance, or IT. There are no ‘Partners’ in this room and from today I am banning the use of the word ‘Partner’ from all job titles!”

The CEO had sent a clear message to the company’s leaders that we all had a business leadership role to play in the success of DuluxGroup.

The more we see ourselves as business leaders (rather than framing our roles as HR specialists or partners to the business) the more likely it is that we will move to an “insider” position. How we frame the role is important because it influences the mental map that HR professionals hold and how they take up the role – so we might, for instance, consider descriptions that position HR as part of the business (e.g. HR Business Manager, HR Lead etc).

In summary

The shift from business “outsider” to “insider” is depicted in the diagram below. It begins with HR taking up its commercial role to bring solutions to the table to solve adaptive and people challenges. This is how the most effective HR practitioners see and take up their role.

Next steps

Do you sit more on the “inside” or the “outside” of your business? Are you seen more as a partner TO the business or as equal member of your business leadership team? What small steps might you take to more fully take up your commercial role? Imagine the impact that this move might have on you and your business.

I would love to hear your views about whether you think HR is perceived more as an "insider" or an "outsider" in the business world. If you believe that HR (and other support functions) should be seen more as "insiders" then please like, comment or share this post.