Reprinted from the Hotel Business Review with permission from www.hotelexecutive.com
In my years as a retained search firm partner, I’ve heard many times the ‘complaint’ from human resources executives that they don’t have – but want – a seat at the ‘table.’ The ‘table,’ of course, is a metaphor for being part of the inner circle, the Executive Committee or C-suite. While I believe this is not only important, but critical to successful enterprises, there is a bigger picture to consider.
But first, some basics: A company’s approach to human resources (HR) is, in my opinion, philosophically based, whether by design or default. While there are various shades of importance placed on HR by top management, the bottom line is that a company either cares about its people or it doesn’t. It either deeply understands the connection between people, performance and profit or it doesn’t.
Anyone who pauses for an instant to think about it knows that every business – no matter what its product (unless we’re talking about Bitcoin) – is comprised of people. It is people who make the company successful, and many of them are far removed from the ‘table.’ They are on the frontline in hotels, factories, and technology companies, to name a few. And, speaking of a “few,” very few of the people at the table are making money for the company – revenue is being driven by those frontline employees who serve the customers, and by the sales force, etc. None of this is intended to infer in the slightest that those occupying the C-suite aren’t valuable, nor is it my intent to get off track defending their roles. Rather, this commentary is focused on how the top HR executive can add real value.
In her article, Why Every CEO Should Give HR a Seat at the Table , Char Newell, sHRBP, CCLC, CRC and a member of Forbes’ Human Resources Council, recounts spending the majority of her career setting up HR departments for companies that didn’t have one, and points out that many companies operating without an HR department see personnel matters only as an administrative function (payroll, employee records, compliance, etc.) and don’t see the value in HR. She goes on to state the following:
Organizations stand to gain a lot of value from having HR at the table. Our job is to care, nurture and discipline. We build trust while setting the tone of the organization. How we welcome and train each new hire determines the course and the direction of the company. Having a seat at the table allows us insight into the minds of the leadership team and expectations of the department.
At the end of the day, the most typical complaint HR receives is “there’s no communication.” This is why understanding the thought process of each leader is so important. I’ve been through a few mergers and acquisitions, and I’ve found that employees are not updated nearly as often as they should be, especially with all of the planning that the process involves. Often times, messages get tied up at the highest level and never make it down the line to managers.
When it’s viewed as a strategic partner of the business, HR can ensure the lines of communication remain open.
Clearly, I agree with Char’s points, which are common sense and rock solid, and let’s add the fact that HR can be key to the company culture, the recruitment/retention process, training, compensation structure, employee communication, etc.
But we still haven’t reached the key point, the most critical one of all…
You see, it isn’t really about whether or not the top HR person has a seat at the table. It’s about the top HR person understanding that their role is to make the people at the table better leaders.
But be warned: Courage is required. Real courage. And, too often, it’s missing, as political ramifications and job security trump courage.
Before amplifying on my key point, let’s pause and look at an actual example where courage from HR would have had a tremendous, positive impact. I was conducting a Chief Operating Officer assignment for a Fortune 500 hospitality client. When the final candidate had been identified, serious internal maneuvering commenced that challenged the organizational structure. Certain senior executives felt threatened and began scrambling to protect their turf and direct reports.
In the end, the org chart submitted to the candidate showed zero direct reports! (It’s the truth – I can’t make this up!) The executive who had to deal with all of the structural debate was a highly-compensated, highly-experienced Chief Human Resources Officer. This CHRO disagreed with the result, but didn’t push back. Instead of telling those trying to manipulate the structure for their own interests that they are dead wrong, and that what they’re suggesting makes no sense and will thwart the new executive’s ability to perform in the role, this individual simply revised the org chart and sent it to the candidate.
The result was that the company lost out on one of the finest leaders in its industry, who was simply too smart to accept a key position where all of the tools he’d need for success had been removed.
So, keeping this example in mind and reading further, the Holy Grail for HR is influence and impact, versus whether or not one has a seat at the table. Constantly pining for a seat at the table subordinates HR, undermines credibility and is no match for action. Contrast that with influencing and impacting key leadership decisions and actions, and advocating for processes that unlock people’s performance and enthusiasm.
Let’s pause one last time to set up the next key point. I led with an observation, and I have another one to share now: Too many HR executives are about their HR agenda and not about the business overall. This kills their chances for a seat at the table. Even if they have a seat, it kills their credibility.
The table is where the C-suite concentrates on the business. In order to be influential and impactful, the top HR executive must first be credible. This means he/she is perceived as genuinely focused on how HR can be leveraged for the good of the business, rather than how the business can better support HR.
So, how does one achieve such credibility? By being a business executive who happens to specialize in HR. In other words, HR can’t exist in a silo. The top HR executive must understand the business model and how money is made. This includes a clear understanding of the overall strategic objectives being pursued, and measuring performance against said objectives. They must demonstrate solid business acumen and an aptitude for reading and gaining meaningful information from financial statements and budgets, projecting full awareness that the business exists to make a profit; that results mean more than a lot of activity.
In addition, this executive must be mindful of competitive and other challenges facing the company and conversant as to how these issues are being addressed, as well as how the C-suite has prioritized these matters.
Given that level of knowledge and credibility, the top HR executive must be a proactive, willing communicator who is not uncomfortable dealing with challenging issues, questioning established procedures, or being questioned. In this era of Big Data, they must provide relevant data and key insights, and interpret this information for those at the table so they can better understand a given issue or validate a needed initiative. This helps them make smarter, informed choices about investing in initiatives that truly support human performance.
In addition to a high level of business intelligence, all of this requires real emotional intelligence, a sense for timing and solid presentation skills. This can’t be about emotion or egos – it must be about purpose. With these attributes, the top HR executive – whether at the table or not – will be influential and impactful, able to draw out issues and facilitate honest, transparent discussion for the good of the organization.
This executive is the prime source of employee feedback and must be willing to point out the pros and cons of any decisions the C-suite is considering that can impact the Company’s primary bloodstream – its people – and aid them in staying relevant. For example, most employers are experiencing a multi-generational workforce, one that includes millennials, a group that doesn’t respond well to rigid organizational policy and structure, or antiquated thinking. HR can add great value by tapping into these diverse generations and continuously training the C-suite to be better leaders and to stay relevant. The top HR executive must be willing to call it out when the company can improve.
Unfortunately, a high compensation package does wonders for failing to remember what it was like coming up, and often dilutes any thought about rocking the boat. That said, the top HR executive can help the C-suite to become a force that leads the company, rather than just running it. A force with a profound sense of the true impact on people and, thus, performance.
Keep in mind that we have to be pragmatic – HR executives aren’t magicians. Influence and impact also require an accountability mechanism within the system. In discussing this with Patricia Smith, Senior Vice President, Organization Development & HR for The Leading Hotels of the World, she adds:
“Fellow C-suite colleagues can only be coached and developed so much by the top HR executive. There has to be consequences that the HR leader can rely on – the CEO, the board, a process, etc. – for when those colleagues are uncoachable and negatively impacting company results. They cannot be protected or the company won’t be able to maximize what’s possible and live the values, which often includes something around integrity, authenticity, responsibility or accountability”.
I couldn’t agree more.
Finally, it’s always a good practice to review each year’s 100 Best Companies to Work For list published by Fortune to see what elements stand out, and what is consistent among these companies. Too many of us in leadership are doing things according to habit, or “the conventional system,” without questioning ourselves or imagining something different or better. Imagining is the key to much of the successes in life and business, and it can be applied to this topic as well.
Imagine a different leadership style or more relevant communication structure from the one that exists in your organization today. HR can – and should – lead this conversation, especially if no one else is stepping up.