About twenty years ago, I was uncomfortably proceeding ahead with my MBA studies at the AGSM in Sydney. It was uncomfortable because I was balancing a busy executive role, young family and postgraduate studies. The pressure at the time prevents too much reflection and appreciation of the opportunity.
A few decades hence, the fog has lifted, and I recall two major predictions canvassed by the wonderful AGSM Professors. The first was very early ideas around the future of work. The concept of a “portfolio career” was raised. This related to the fact that workers would not be limited to one role but be in a position to hold several roles at any one time, usually across several businesses. Now it is rapidly becoming the norm as the rise of contract employment takes centre stage and the emerging career option for many.
The second was the inevitable repositioning of the “human resource” function as an integral part of the company strategy. My observations around the APAC region, USA and Europe are that the degree to which the human resource function has become strategic is closely aligned with the relative development of the labour market.
In rapidly developing markets such as Vietnam and India, I have seen some benchmark talent acquisition and engagement programs but there is still a way to go. The short-term focus is the seemingly endless battle to secure adequate skilled talent so that the company strategy can be realized.
In traditional and slower moving markets like Japan, the human resource function is well developed but in a very different direction compared with the west. The Japanese are masters at developing a senior leadership team with strong generalist skills because as a key part of their development they have each held a significant position in every major division in the company. However, the process for reward and recognition is still linear and male-dominated.
In July 2015 the business thought leader, Harvard Business Review, published an excellent piece “People Before Strategy: A New Role for the CHRO”. The premise from the (Ram Charan et al.) piece was that the CEO, CFO/COO and the CHRO should be the three key executives setting the company strategy. At the time, I thought this elevation of the human resource lead enlightened. Too many times, I have seen the human resource lead report into a CFO or COO role, buried under a organisational layers. “Our people are important but…”
I have been fortunate to try this model discussed by by Charan a few times since the article was published, directly and indirectly. It can take a bit of selling to stakeholders, but I have always seen the elevation of the human resource lead to a top leadership role as something that quickly returns the investment.
Of course, much has changed in twenty years, and in many developed markets, the human resource function goes by new and more accurate names. A quick search of job and executive search sites in Australia points to “People and Culture” as the most popular at the moment.
The name is important because it reflects the purpose and the mission for the people and culture leader and his/her team. At the same time, the scope for the role has become more complex. Being responsible for all things people and culture can mean having to facilitate across such important functions like company culture, talent acquisition, onboarding, learning and development, talent development, career planning, succession planning, workforce planning, performance management, engagement and prevention of employee harassment.
Overlaying this will be the executive role and the ability for the team to be a true partner with the business line managers.
What about small businesses? How soon can people and culture resource be introduced?
In the outstanding “High Growth Handbook” by Elad Ghil, it is suggested that somewhere between 50 and 150 employees justify having full-time people and culture lead.
Some clients I have worked with have just 20 people and put in place a people and culture function. With the above mentioned “portfolio career” culture, this has become easier. Many human resource professionals can work for 2 or 3 days per week. A lot of the work can be done remotely. This enables small businesses to put in place a people and culture lead earlier than normal and to start positioning the organisation more professionally.
In my experience hiring people and culture resources into a business, I have never been disappointed at the value added to the organization’s strategy. The value a competent professional can bring is enormous.
As a small business owner with a growing business, your priority is probably going to be hiring, training and retaining the best talent. A competent people and culture lead can put in place the necessary agreements and talent acquisition process which can help to differentiate your organization from the competition. Gradually, as the business builds a reputation, more emphasis can be placed on some of the other people and culture capabilities.
Once you have decided who is responsible for People and Culture in your organisation, this lead must be a part of the leadership team and supported in becoming a respected business partner.
References:
Harvard Business Review, “People Before Strategy: A New Role for the CHRO” Ram Charan et.al. July 2015
“High Growth Handbook”Elad Ghil 2018