Why is It Time to Turn Human Resources Into Profit Centers?
“HR is not a match for sexual harassment. It pits male sexual aggression against a system of paperwork and broken promises, and women don’t trust it. For 30 years we have invested responsibility in HR, and it hasn’t worked out. We have to find a better way.”
Caitlin Flanagan – The Problem with HR – The Atlantic – July 2019
In the early 90s, the graduates of our programs quickly became our greatest business development team. In just a few months after our launch, we were introduced to a human resource group at one of the largest companies in Los Angeles.
They were going through difficult times. A faulty business plan had badly damaged the organization. They were laying-off people by the thousands. We had the privilege of taking them through our program. Many of these employees made dramatic life changes and the high volume gave us a big opportunity to learn and improve the program.
An HR executive from the troubled company became our internal partner. Before sending employees, she asked to experience the program herself. Even though this example was published before, we are making slight changes to avoid identifying the organization.
At one point, she told us of her professional experiences from the past 2 years. There had been an industrial accident at their headquarters. She was put in charge of dealing with injured workers and moving about 3,000 people to another location. The experience was deeply stressful for her. But, just as that situation was resolved, she received an order to lay off about 800 workers. This was quickly followed by a much bigger layoff. At the company holiday party, everyone was asked to bring a gift. They were all given lottery numbers. Her gift turned out to be a cheese wheel and a hatchet.
Someone at the table said, “Isn’t that appropriate.”
I asked her, “Did anyone once ask how you were doing?”
She responded, “No. Most people felt I should be happy to have a job.” Throughout that first day, she kept coming back to all that she was asked to deliver without meaningful support.
76% of our country’s human resources managers are women. They step into roles that have been characterized as “below the line.” They are an expense. There is a tremendous difference in organizational behavior towards employees who generate revenue and those who don’t.
A human resources professional’s primary responsibility is to solve problems. As they become more skilled the quantity and quality of the problems grow. It is rare for the organization to grow the support team accordingly. Eventually, many are losing their life to competency.
This is because they are treated as an expense.
Based on the numbers, 3 out of 4 human resource executives are women who have had to protect the company from women who have been victimized by sexual predators. While more and more cases are resulting in the exit of a predator, it isn’t because human resource executives wield more power, it is an outcome from the revolution in transparency. The explosive sexual harassment claims of the past few years have been an outcome of social media-fueled by millions of electronic journalists. Many of the brightest and best women that I know are chief human resource officers and labor attorneys who have had to sit through hours of disturbing narratives, sitting in hotel rooms reviewing porn sites, and gathering all the information they can to protect the company rather than the victim.
This is because HR continues to be an expense. The pervasive internal fear of losing one’s job has insulted the values of quite a few people that I know and care about.
Time and time again, organizations looked at short-term profits and systematically worked to smother the problem rather than pull it into the light. In hindsight, how willing would NBC be today in having a do-over on the Matt Lauer case? But, human resources has not been given the power to make that decision. In a profit-centric world, they ought to have the power to analyze how much damage keeping him for one more day could represent in stock value, the ability to attract premium talent, and the loss goodwill with their viewers. Instead, they were directed to make one payout after another.
I have a fairly large cadre of clients, chief human resource officers who came to one of our programs and decided to make big changes.
I often tell them, “If the CEO asks you to take charge of employee engagement, keep your bags packed.”
The only sustainably great cultures are ones that are led by the CEO. If you are not given the power to tell the CEO that, you could become collateral damage. Unfortunately, too many CEOs don’t want to be bothered by people. They are busy satisfying shareholders and revenue generation. Many of these not so enlightened executives walk into human resources with the message, “Fix the employee engagement problem.” By the time the CEOs have hit the door, they are disengaged from the engagement program!
Next, the human resource executive announces a new engagement initiative. The employees look past her shoulder to the CEO. They see business as usual and they shrug.
An employee engagement survey is sent out. The results only make management feel more inadequate. They are sent through a leadership program. They return enthused to their teams who respond, “So what.” The human resource executive is shown the door for not fixing the problem.
Human resource professionals, like virtually every profession in the world, are undergoing the biggest restructuring of work since the printing revolution. HR began as police and paperwork units centered on keeping workstations filled and liability at a minimum. Over the years, the profession has become far more sophisticated. But, at its core, by treating human resources as overhead, we are not giving the function the freedom to reach its highest good.
The human capital profession bears equal responsibility in reinventing its professional mindset. I cannot count the number of people who tell me they want to become strategic leaders who addictively describe their value in terms of activity rather than results. I cannot count the number of human resource professionals who refuse to develop presentation and consultative sales skills, or routinely build solid professional support systems to fuel their career aspirations. Accelerating change is turning these vital skills into the real change skills of the modern workplace. We call them courage skills. As activity is taken over by cheap outsourcing and technology, the need for a transformed mindset becomes more urgent every day.
I believe one of the shortest paths to the reinvention of human resources into strategic human capital leadership is to change the model to one based on profits.
I believe the shortest path towards a change in mindset can happen when someone comes to a program such as ours where each participant experiences the beliefs and behaviors that no longer work. Then, they redesign their professional life around what they truly want. Sure, some will pack their bags and leave. But, it is far better to have someone recognize what they want to do with their lives rather than hanging out because they are afraid to take action. In truth, technology is offering all of us freedom.
Freedom requires that all of us raise the standards of how we work. For example, loving our work seems to be the most reliable fuel to change ourselves and develop the courage to grow.
- How much does an 8 or 36% improvement in employee engagement contribute to the bottom line?
- If highly motivated talent joins the organization because its green initiative or philanthropic involvement is real, what is that worth?
- How much is it worth to fly half-way around the world and bring back a scientist who will bring in 1.5 billion dollars in investment capital?
We work with several high-flying organizations that raise money to cure disease or bring innovation into the world that changes the way we live, communicate and view our lives. Their biggest challenge isn’t raising money. It is finding game-changing talent. It is no longer enough to throw cash and prizes towards the recruits. If they have the talent, they want a breathtakingly good employer culture, they want more than a boss, they want mentors. These organizations need the kind of human capital leaders with the power and mindset to convince the leaders to become Engagement CEOs. We need the kind of human capital power to walk into a room and tell the venture capitalists if they don’t manage human capital during a merger, they will not meet the targets in their new business plan.
Until we shift the vision from keeping human resources cheap to making more money, I don’t believe much will change at all.
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