CIPD must take the 10-year view

The 2000 National Conference at Harrogate this week heralds a milestone for the Chartered Institute of Personnel and Development. The Royal Charter gives official recognition to a profession with an inferiority complex.

Historically, conference after conference has seen HR professionals examine their navels, forever feeling that their role is not sufficiently recognised or valued.

Yet chief executive officers internationally are regularly quoted as saying, "People are the only source of competitive advantage."

Academics pile on the evidence, with decrees that 70 per cent of company assets are in the brains of employees, and people management practices can lead to 20 per cent productivity and profit improvement. The Financial Times pronounces that 71 per cent of company assets today are intangibles compared with 20 per cent in 1980.

Merger and acquisition activity grows exponentially in the US and Europe, and analysis after analysis shows that 80 per cent fail to improve shareholder value and that failure is due to people issues and cultural incompatibility.

It seems that even with all this activity and the CIPD Royal Charter recognition, few personnel professionals are influencing the mergers and acquisitions table and less than 18 per cent of FTSE 100 companies have an HR director on the main board.

The trend among blue-chip companies does not look promising: in one fell swoop, M&S loses Peter Salsbury, a CEO with an HR background, and HR director Clara Freeman.

Stockbrokers reportedly said Clara Freeman had been "unpopular among investors because of her personnel background". Nick Bubb of broker SG Securities was reported as going further, "What had she done? She was a personnel officer and all of a sudden she was store operations director."

So now we have it: HR has convinced CEOs, some of their colleagues, academics, the Privy Council and the Financial Times that the future is with people and the competitive edge that they bring.

But not with boards directly and the City indirectly. Is it that they are participating in a dialogue of the deaf, or have we got it wrong?

It will help for the CIPD to take a 10-year view that goes beyond the current strategy of piling up the evidence of contribution and bolstering professional standing. The challenge for the CIPD is to embrace partnership, initiate collaboration with other like-minded institutions and join in the debate on the strategic contribution of HR to board development and corporate governance.

Only then will boards and the City see that HR must be a player in strategy for both the short and long-term.

By Professor Clive Morton, Independent HR consultant, chairman of Whitwell Learning, author and former vice-president of the CIPD

Comments are closed.