HR must take a risk to be a business partner

Everyone wants to be a business partner these days. Yet very few HR people
are prepared to share the risks that are inevitably part and parcel of
"partnering" senior management.

While HR’s aversion to risk is legendary, it has not stopped many
practitioners falling in love with the title in much the same way as the
"reps" have their egos massaged by the title of area sales manager.

Being a business partner also fits in with the current mantra of the CIPD
that effective HR practices have an impact on the bottom line. To back up this
claim the CIPD lined up a group of academics and researchers to unearth a
correlation between best practice in HR and successful businesses.

But research such as this fails to question the role of HR in failing
businesses. Just as HR can have a positive impact on the bottom line, can it
damage it?

The HR team at Marconi probably likes to think that it makes a business
contribution – but does it take a share of the blame for the failed business
strategy? It must share some of the responsibility if it aligned its HR
strategy with Marconi’s business strategy.

A reasonable defence might be to claim it was using best HR practices. What
value can we place on "best practice" in such circumstances? The only
HR practices that can be called best practice are the ones that help an
organisation achieve its own strategic objectives. What works for one
organisation may not work for another. This means best practice can only be
judged within its own particular context, not as an "industry standard".

If HR practices do correlate with business results, in Marconi’s case, its
HR practices must be about as far from any notion of best practice as it is
possible to be.

I haven’t got a problem with HR wanting to act as business partner. Indeed,
I have actively promoted the idea for years. However, to really earn the title,
HR people have to accept they, too, have direct responsibility for all the key
performance indicators of sales volume, profits, ROCE/RONA (if you need to look
these up you have failed the first test as a business partner), p/e ratio and
EBIT (or even EBITDA).

Even more importantly, HR business partners should also spot when their CEO
and finance director are sending the business down the tubes and be in a
position to actually do something about it.

So we should ask the CIPD whether this changes the conclusions of its
research. Either this supposed correlation is just too simplistic an
explanation of HR’s contribution, or HR has to accept that its contribution is
bound to change in line with a normal cycle of market changes. It cannot claim
credit without taking a risk.

By Paul Kearns, Senior partner, Personnel Works

Comments are closed.