Yes, but is it HR?

new economy and the era of knowledge workers have produced a new breed of
senior directors with dynamic job titles and roles. But is this the natural evolution
of HR or a threat to HR as we know it? Jane Lewis looks at six examples of the
new HR

If you laughed when you first heard job titles such as "talent
champion" or "transformation director" then the smile might end
up on the other side of your face. Many of these new titles are grounded in
modernity signalling a new-wave approach to management, a recognition that
structures are flatter and previously distinct boundaries between departments
are breaking down. Even the more far-fetched terms conceal a serious intent. By
focusing both the holder of the position and the wider company on the brass
tacks of what a position really entails, a real cultural shift is possible.

Some of the new roles are simply evolutionary, emerging as extra
responsibilities were gradually added to an existing role. Others mark the
culmination of a long and varied career, in which all past skills were brought
together under one umbrella. In some instances, it is impossible not to discern
a modern form of empire building.

The emergence of the new roles is no laughing matter for the traditional
HRpractitioner, not least because often the roles deliberately bypass the
HRfunction. So are these HRroles and can HRpeople do them? And how can they
equip themselves for the roles and gain the credibility with the board to get

Two distinct traits seem to unite many of these new-breed practitioners.
First, they seem to share a strong belief in the power that people can exert
over the success, or otherwise, of any organisation – several of those
interviewed had experienced a kind of epiphany on this score in a past project.
Second, they all look to the future. Many of these new roles were born of a
dissatisfaction, irritation or frustration with the way the existing HR model
was being run in their company.

So how much of a threat do these new roles pose for HR as a profession? You
need only look at the way Microsoft’s financial director Steve Parker stormed
the fortified castle of the company’s HR department, decimated it and
refashioned it his own way, to get the point. The message that many of these
combined "people roles" throw up – often taken up by professionals
from other disciplines – is that there’s no resting on your laurels these days.
With people seen as the most important asset in the service economy, there’s no
shortage of candidates from other disciplines queuing up for a slice of the
action. In the final analysis the message is clear – reform or prepare to be

1. The Transformation Director

At the height of the new economy
frenzy two years ago, the ability to change was seen as the single most
important characteristic that any company could possess, often even surpassing
the ability to run profitable product lines. Such was the perceived threat of the
new business models championed by the dotcoms, that any traditional company,
however powerful, could not be seen to be standing still. It sometimes seemed,
to the cynical at least, as though change for change’s sake was the order of
the day. "There is now an irresistible fashion for perpetual corporate
modernisation, however disastrous its consequences," wrote the columnist
Alexander Chancellor at the time.

This was the era that saw the birth of the transformation
director. The new role was a tangible sign that a company had recognised the
new paradigm of horizontally structured, customer-centric, project-led
organisations – and intended to do something about it. In recognition of the
pivotal role played by the Internet in this shift, the post was frequently
taken up by progressive IT directors. But when the e-revolution hit HR, a new
breed of eHR/transformation experts began to emerge.

At first the remit of most eHR managers was relatively narrow
in scope. The brief was to make maximum use of the new tools available to
upskill the capability of the HR function. The unofficial brief was often to
reduce costs – a feat that eHR 
accomplished in spades, producing dramatic savings and headcount
reductions among many of its early practitioners.

The arrival of eHR outsourcers such as e-peopleserve and Exult
offered the possibility of even bigger savings, converting a fixed cost
embedded in the business into a variable cost. Companies that outsourced found
they could increase or decrease the volume of activity according to business

Deployed wisely, it soon became clear that eHR was also a
powerful transformational agent for the HR function itself. By effectively
freeing HR professionals from the drudgery of business administration, it
opened the door to new roles at the heart of the business that had previously
been denied them.

But the full scope of what eHR could achieve on the wider
business only became apparent when it was linked with mainstream business
transformation. Indeed the success or otherwise of the new technologies hinged
on a revolution in business. You couldn’t expect to make radical changes with
e-enabling tools, without altering the systems and processes that underpinned
them. It was this recognition that propelled many eHR practitioners to the
forefront of their company’s drive to redefine and upskill the organisation as
a whole. If you want to get involved in strategy with a capital "S",
this is the role for you.

eHR/transformation roles call for a raft of skills that may be
unfamiliar to many HR professionals. Clearly a knowledge of what technology can
achieve is critical to the role, but even more important is a thorough
understanding of corporate structures and processes: how they work, how they
interact with each other and how they can be best optimised to drive the
business’ strategic aims. Moreover, if the outsourcing model is pursued, you
will need to acquire new skills in defining and managing third-party
relationships.  Finally, you will need
real drive and commitment. Business transformation is a tough process and you
will need a skin to match.

Case study: Martin Reddington
Director of eHR transformation at Cable & Wireless

In the crisis-ridden telecoms sector, Martin Reddington is the
kind of manager you want on your side. Clearly an individual imbued with
unusual drive and determination, Reddington believes the ability to move
forward is a discipline in its own right. During his comparatively brief tenure
as director of eHR/transformation at Cable & Wireless he has certainly made
his impact felt.

Appointed director of eHR transformation last year by C&W’s
group head of HR, Martin Hayton, Reddington’s immediate objective was to
achieve cost savings in the HR function. But his remit also included the wider
brief of creating the kind of internal structure that would help propel C&W
from its status as a traditional telco to that of a multinational data and
Internet services provider. An important part of Reddington’s job was to shore
up international practice – to spread uniform processes across C&W’s
offices in Japan, the US and Europe.

"When we began we were 80 per cent local and 20 per cent
global. The situation now is the inverse of that."

The sharp wind of change has also been felt within the HR
function itself, where both staff levels and the budget have been slashed by 40
per cent since Reddington arrived. "The original intention was to go for a
20 per cent budget reduction," he says. "We’ve been able to take a
more aggressive attitude to head count reduction."

Survivors in the department have also felt his impact.
"We’ve been putting them through a series of capabilities workshops,
change management, project management and consulting. Most are now business
partners or specialists." The change has created a much more positive
atmosphere in the department, he says. "Freed from the murky swamp of
administration, they can now practice HR as a higher level skill and can really
influence the performance of the management units they have responsibility for."

Underpinning this transformation is a fully integrated HR
service delivery model based on SAP software, with bespoke C&W tools
layered on top. As far as Reddington is concerned, "the jury’s still
out" on the question of outsourcing. But having studied the outsourcing
market for almost a year, C&W is now at the "detailed
solutioning" phase of negotiations with one supplier.

With a career that spans nuclear engineering, marketing, brand
specialism and project management, Reddington is the first to admit, "I’m
certainly not an HR man", though having designed a whole range of new
processes for the function he  says,
"I now understand a lot more about HR".

He sees himself primarily as a transformation specialist
leading programmes from "the point of view of what the business is
attempting to do". Having begun as an engineer with National Power, he
moved into telecoms with Nynex, which was later combined into C&W.
Reddington played an important role in launching the combined company’s new brand,
before moving to head up global communications in C&W’s millennium

Following his appointment to the new role, a timely three-day
conference on eHR helped Reddington get his bearings. "It became very
evident that eHR is not a journey dominated by technology. It should be seen as
transformational, but not driven by technology." He believes that the
failure to recognise this important distinction has led to many programmes
stalling in other companies.

"We produced a business case which took ages, but has been
worth its weight in gold. It covered a whole raft of intangible benefits of
what could be achieved if the business was e-enabled using systems." But
it also concentrated on the hard-stuff: costs saved, costs avoided and revenue

"I don’t think I am very popular in certain
quarters," he says. "But because I cannot be labelled an HR person,
I’m seen to be impartial – I came with a very fresh open mind."
Nonetheless, an important mainstay has been the "unswerving resolve"
of C&W’s general HR management to see the programme completed. "If
that hadn’t been demonstrated – if there’d been even a whiff of weakness or
squidgy-ness – this discipline of moving forward would have been severely

Is this a transitional role? Reddington firmly disagrees.
"The journey never stops – there are always refinements to be made."
And he now hopes to take the eHR processes and systems that have been developed
at C&W to market. "I would like to convert what we’ve done and offer
it to other customers." All things considered, the eHR transformation
programme "is one of the most interesting things I’ve done in my
career."This combined role personifies the belief that the way you treat
people as individuals not only defines the ethos of an organisation, but also
sends an important message to its target markets. Indeed, in some companies,
particularly those at the sharp end of the service sector, it is no
exaggeration to say that these values are the main marketing message,
inextricably caught up in the wider brand and service offering.

2. The head of organisational change

This combined role personifies the belief that the way you treat people as
individuals not only defines the ethos of an organisation, but also sends an
important message to its target markets. 
Indeed, in some companies, particularly those at the sharp end of the
service sector, it is no exaggeration to say that these values are the main
marketing message, inextricably caught up in the wider brand and service

The title director of people has been frequently ridiculed in some circles
as no more than a trendy new name for existing functions. What’s wrong with HR
director? they ask. Well, quite a lot. Exponents of the new role are the first
to point out that people and organisational development is in fact an entirely
different discipline from traditional HR with its emphasis on procedures,
processes and competencies. Indeed, in many companies it exists in parallel
with the HR function.

In others, however, the term has come into use as a reaction
against established HR practice – a desire to break free of the perceived
limitations of the past with its endless red tape and bureaucracy, and
concentrate on the talents and mindsets of individuals. The essence of the new
thinking is that each employee is much more than a cog in the corporate
machine. For better or for worse, it is the individuals who shape companies.
The best organisations, according to Gallup’s senior European vice-president,
Graeme Buckingham, are underpinned by "a very passionate belief
system" springing from the collective articulation of individual goals. In
the companies he studied, the main priority of the best managers was to find
"fulfilment for the individual". Writ large, this meant "a
strong belief in the importance of HR to the future of the organisation".

Traditionalists also miss the point when they consign
"development" to the old-style training category. Organisational
development is much more than training (though constant reskilling forms a
large part of its remit). Its most important function, however, lies in
translating an often unarticulated and sketchy set of values into the kind of
policies that can drive business growth. As such, it can be compared to a
conjuring – to magic a substance out of thin air.

What kind of skills do you need for the job? Certainly, the
ability to "think out of the box" is likely to be critical to any
process of translating intangible values into practical policies. And you will
also need an in-depth knowledge of the business, its aims and purposes. Above
all, you need to be able to understand the often complex relationship between
individuals and the structures they operate in. Many practitioners believe that
nothing less than a full degree in organisational psychology will cut the
mustard these days.

Case study: Chris Goscomb
Head of people and organisational development at easyJet

Despite its recent travails, easyJet remains the epitome of a
company whose success is interwoven with its corporate ethos. In the early
days, its value system seemed to mirror the personal characteristics of its
founder Stelios Haji-Ioannou: laid back in style, yet rigorous about detail.
And above all imbued with a certain kind of passion.

But as Chris Goscomb explains, the formulation of easyJet’s
now-famous employee brand was no casual evolution, but a deliberate strategic
plan. As with many other aspects of its operation, the company took much of its
inspiration from the pioneering no-frills US carrier, South West Airlines,
which had long had a strong "people policy" in place.

But when Goscomb joined the company four years ago as a service
standards manager (he says his current role just "grew" over the
years), many of the key elements of the easyJet’s ethos were as yet undefined.
Certainly, the company knew which direction it wanted to take – "that it
would have a flat structure and involve people" – but these were largely
unstated aims. The main challenge he faced was "to make it happen, to make
it real".

Goscomb, whose background includes stints as an operations
manager with Eurotunnel and London Underground and more latterly as a
management consultant specialising in leadership and crisis, learnt the value
of people early. "My initial post-university training was focused on
logistics. But I learnt that if you want to make a difference, you had to
involve people implicitly."

The basic tenet of the easyJet ethos he has evolved is
"that everyone makes a difference". He considers this particularly
critical in the current environment of turmoil in the airline industry, where a
strong employer brand and ethos can have a substantial impact on sales.

Goscomb, who also handles internal communications and
management development, works in parallel with easyJet’s acting head of HR,
Deborah Woodward, who presides over a department handling policies, practices,
procedures and deployment. "We do work incredibly closely together. But we
look at the world from a different perspective," he says. "If you
really want to wind him up, try calling his remit ‘soft’.

Much of what we do is subliminal, but I personally view it as
the harder stuff," he counters. "It’s the bits and pieces that sit
below what people see. It’s the bedrock". And while the HR department is certainly
involved in many "tough" areas, "it tends to be looking here and
backward – we’re looking here and forwards".

There are some tensions and conflicts to overcome. Goscomb
admits there can be a conflict between applying good business practice and maintaining
a strong people ethos. "It’s easy to do one or the other. The tricky part
is combining them." He has established what he calls a Paradox Model to
counter the problem.

Is organisational and people development a luxury likely to be
swept away if the hard times hit? Absolutely not, says Goscomb. "It’s so
key to what we are doing, it would be like cutting the heart out of the

3. The HR and IT consultant

Despite obvious appearances to the contrary, IT and HR have a lot in common.
Both are departments whose perceived value to most businesses has leapt from
being, at best marginal 30 years ago, to a current status in which they are
viewed as pivotal to future success. Both have had to struggle to achieve this
recognition. And both have come under constant criticism for being slow at
coming forward. If you think HR gets a bad press for not understanding the
business properly, you should see some of the criticism that’s been meted out
to IT over the years.

In many companies the first joint effort between IT and HR was
the payroll system. But as personnel applications became more pervasive and
ambitious in scope it became clear that the relationship wasn’t working –
largely as a result of ignorance on either side. While most HR practitioners
had little idea about how advances in technology could help improve their lot,
even fewer IT specialists possessed the kind of business knowledge necessary to
register the transforming impact that a well-designed system could have on HR.
All too often the resulting systems, while possibly excellent in terms of their
technical prowess, bore very little relevance to the kind of tools that HR
people actually needed. Out of this frustration the IT/HR hybrid was born.

The main role of the IT/HR hybrid, therefore, is to act as a
kind of bridge between pure business and pure IT. Not only do they understand
the business needs of the HR function, but their technical knowledge enables
them to interface with what one expert calls the "deeper" technical

This fusion of roles was certainly accelerated by changes in
technology. The move to distributed systems in the early 1990s helped create a
new breed of HR super-user, quite capable of specifying and occasionally
supervising, the creation of systems tailored to meet specific needs. In recent
years the level of IT literacy within HR has come on in leaps and bounds. As
Ray Leighton at IBM points out, "The 16-year-old computer whizzkid has
matured into a 25-year-old who works in HR."

More recently, a further change in approach has driven the need
for people who can straddle both disciplines. During the glory days of ERP
(enterprise resource planning) software, there was a fundamental assumption
that the processes specified by software giants such as Peoplesoft, SAP et al,
were best of breed. If a company’s existing processes didn’t fit those
specified by the software vendors, it was up to that company to re-engineer its
business to make the match.  But this
one-size-fits-all theory has been repeatedly called into question. Apart from
raising obvious questions about competitive advantage, it is now established
wisdom that really effective systems are made by matching software to processes
– not the other way round.

Thus the need for individuals who understand both the mechanics
of the business and the possibilities conferred by IT has never been higher and
IT/HR hybrids are in big demand.

study: Ray Leighton
Executive consultant at IBM’s eHR consulting practice

"If you’re going to combine HR
and IT, it helps to work for the world’s largest IT company," says Ray
Leighton. "There’s always someone expert around who can help you."

Leighton’s background is pure HR. He began his career as a
personnel graduate at Scottish & Newcastle Breweries before joining IBM’s
manufacturing plant at Greenock, where assignments included training,
communications and salary bench-marking work. Following a move down south to
IBM’s Portsmouth head office, he became a job evaluation expert, before moving
on to the company’s labs near Winchester to cut his teeth on more generalist HR
– managing both HR administration and operations.

Leighton is the kind of chap who likes to keep on the move, so
it wasn’t long before he made his first foray into systems strategy. In 1990 he
joined a team to develop an internal pan-European HR system and this soon led
onto another technical project defining a new HR product with another leading
UK software supplier. Although the resulting product never came to market, the
experience proved invaluable to Leighton personally. He spent a lot of time defining
requirements, modelling data and mapping processes. "It gave me an
in-depth understanding of what not just one, but a lot of other companies
wanted, out of an HR system."

It was time for a complete change. Leighton was chosen to run
IBM’s career transition programme, part of a mid-90s downsizing exercise that
saw Big Blue’s UK head count drop from 20,000 to 9,250. The broad breadth of
knowledge he had already amassed from his varied background with the company
stood him in good stead. He was breathtakingly efficient, reducing the time
between someone choosing to accept voluntary retirement and talking to an
outplacement consultant from three weeks to three days. Meanwhile, internal
surveys showed a dramatic increase in customer satisfaction with the process.
For Leighton, this was a salutary exercise, it showed him the very real impact
that good systems based on solid processes could  have on the welfare of individuals.

But the success of this project also highlighted Leighton’s
growing dissatisfaction with IBM’s HR function, which he increasingly viewed as
too administrative in outlook, too inefficient in service delivery, and
over-concerned with hierarchies. Frustrated with this state of affairs, he quit
HR and retrained as a salesman, taking up a position in general sales. Soon
after, however, a position that would enable him to make maximum use of both
his HR and newly acquired IT skills came along. When IBM announced it would
develop and sell a specific HR suite of applications, Leighton was clearly the
man for the project. He joined a team of five that spearheaded the company’s
push into HR and payroll applications.

After a long journey, Leighton appears to have found his real
metier as a supercharged IT/HR hybrid. He operates as a consultant advising organisations
on how they can transform their HR function to the new e-business model for HR
services. His remit covers everything from strategy, through business
modelling, to advice on outsourcing and self-service.

He sees the trend towards a greater marriage between HR and IT
as inevitable and predicts the rise of many more IT/HR specialists. A growing
number of HR professionals, he claims, have already become more than aware
"that IT is a tool that they can use to leverage their position within the
organisation". Those who either fail to see, or refuse to take this
opportunity could well find themselves consigned to oblivion, he warns.

4. The human capital director

According to one management thinker,
the very expression human capital encapsulates just how far the HR profession
has evolved over the past 40 years. During the 1960s and 70s, the main
challenge facing many HR departments lay in bringing together the warring sides
of management and the workforce.

Later, at the height of the Thatcher era, the key preoccupation
was rationalisation and downsizing. Within a few years the focus had moved on
to quality – TQM – and an obsession with process-driven activities. Human
capital, he argues, reflects the latest metamorphosis of the profession as a hard-nosed
business partner, responsible for nurturing, managing and extracting maximum
financial reward from a key corporate asset – intellectual capital.

The notion of the workforce as a capital asset is often thought
to derive from new economy thinking, which frequently sought to elevate many
other so-called intangibles on to the balance sheet – a company’s ability to
form customer relationships for example. This impression is quickly confirmed
if you conduct an online search. According to Brett Walsh, head of human
capital at Andersen UK, in 1998 there were no less than two million Internet
sites mentioning human capital – a figure that has undoubtedly grown
considerably in the intervening three years.

But as Walsh points out, the term was first used much earlier.
Indeed its originator, the US economist Theodore Schultz, the so-called
"father of human capital", won the Nobel Prize for Economics for his
pioneering work on the subject as far back as 1979.

Nonetheless, it took the bombshell of the new
economy to put human capital firmly on the corporate map. You could tell how
seriously the concept was being taken when even an outfit like Stern Stewart,
formulators of the EVA value assessment tool (as hard-nosed a financial
measurement tool as any) began attempting to factor human capital into its

The problem with the notion in its purest sense, however, is
that despite extensive attempts no credible means of measuring the financial
value of people has yet emerged. Indeed, there is a growing school of thought
that maintains the quest will remain forever fruitless on the simple grounds
that however much we may hope to the contrary, it will always be impossible to
evaluate "soft" assets in the same precise terms as their
"hard" equivalents.

It might be argued that this quest to put a financial value on
human capital misses the point anyway. The real value of the term lies in the
revolution of perceptions it has wrought. The human capital movement proved to
be the last nail in the coffin of the previously widely held belief that people
were a draining cost on companies. The fact that so many organisations now
claim, with varying degrees of credibility, that their "people are their
main asset" shows just how far-reaching the movement has become.

study: Brett Walsh
Partner and head of Andersen Human Capital UK

Brett Walsh believes the term human capital is highly symbolic
of the journey HR has taken from its role "as a policeman to personnel, to
a strategy function that talks the same language as the financial
director". He believes there has been a major shift in how the markets
view human capital. "The whole concept has taken on a much sharper focus.
More organisations are quoting a market value that’s higher than their book
value on the basis of people value, knowledge and networks – they are realising
that the people asset leads to profitability."

On this basis, Walsh maintains, the main remit of any director
of human capital is to invest as much as possible in the resource. For him, the
really compelling truism is that "people are the only asset in an
organisation that increases in value the more you invest in it".

Moreover, several macro-economic factors now combine to make
the argument even more pressing. In the teeth of an economic downturn, the
"war for talent" between companies is likely to become even more hard
fought. And the long-term picture of a declining birth rate and ageing
population should focus the minds of companies even more strongly. As Walsh
sees it, the main priority of HR function in the current climate should be
simple: to do as much as possible to attract people to the organisation, and
then work hard to retain them. He believes the greatest HR challenge at present
is global talent management.

Walsh’s own journey into people management took a circuitous
route. He began his career as a chartered civil engineer. After studying for an
MBA and a part-accountancy qualification, he became a manufacturing consultant.
His people epiphany took place while he was working on a project in Italy. He
was brought in to help a US organisation that had lost confidence in its
ability to turn round a failing southern Italian factory.

Walsh’s discovery was that the real problem lay "with the
people not the process". "There were enormous differences between the
shopfloor and management in Italian culture," he says, which were impeding
productivity. This realisation was the starting point of reform. "I went
in and turned it around in six months."

After stints at both Hay Consulting and Accenture, he joined
Andersen, where he now heads up the Human Capital practice. Walsh’s role is
both inward-looking and outward-facing. Although the practice frequently offers
its expertise to internal groups (human capital is a line function at
Andersens), the main focus of effort at present is in building up the external
practice.  In a nutshell, Andersen Human
Capital aims to provide all the services any HR director may need from advice
on strategy and outsourcing through to compensation, pensions and international
tax advice.

According to Walsh, this dual remit gives the practice real
edge. It allows it to draw on new ideas and best practice from a wide variety
of sources. "Both sides inform the work of the other," he says. As
for his own future plans, Walsh is determined to stay with human capital.
There’s no reason to move, he maintains. "This is a real growth area."

5. The head of knowledge

If you were asked to name the two
most powerful new forces in business over the past decade which would you choose?
Odds are that knowledge management and communication would rank highly on any
list. And many would argue that, as essentially people-centric activities, both
fall squarely under the banner of HR.

But surveys show that in practice very few HR directors have
managed to land direct control of either of these vital new forces. The problem
is clear, both knowledge and communication are considered so central to the
strategic heartbeat of the 21st century organisation that everyone wants a
piece of the action. In fact, the twin areas of knowledge and communication
could be described as the corporate equivalent of the war zone – an area of
territory fiercely contested by candidates from a variety of disciplines,
including finance, marketing and IT.

Some claim that HR’s failure to seize the initiative in these
areas is just another example of the profession’s lack of gumption when it
comes to seizing the main chance. If you take control of internal
communication, for example, "The opportunity was there for HR, but it
didn’t leap through it", says Owen Hargie, professor of communication at
the University of Ulster. "There’s not a tendency to be proactive in HR,
to identify the potential niches they might influence."

According to a survey of 235 internal communications experts
conducted by Collinson Grant, just eight per cent of those operating at a
senior level in this area hailed from an HR background, the majority had begun
their careers in either marketing or PR.

Yet the report’s author Tony Green claims these
findings go against the grain. "The implication from the research we did
was that HR was the preferred route for managing [internal] communications –
and my experience supports that.

It’s a similar story when it comes to knowledge. Studies show that
those companies which have acknowledged the crucial contribution of their
knowledge-base to the bottom line – by creating a new category of ‘knowledge
officers’ for example – rarely go recruiting in the HR department. Heads of
knowledge are far still far more likely to spring from the engine room, from IT
and finance, or from hybrid general management specialists than they are from
those with an expertise in people.

There are signs that this is beginning to change.
Responsibility for internal communication, in particular, is beginning to gain
a wider recognition as an specialism – particularly within companies whose HR
departments have actively championed new means of communication such as
intranets. Moreover, many HR professionals will argue that, contrary to what
the studies say, they are closely involved in both areas on a day-to-day basis.
If this is the case, it’s time to articulate it.

More HR people should follow the example of Dr Anil Kumar (see
below) and insist on the inclusion of these attributes in their titles if they
occupy an important chunk of their working lives. As he says, "My original
title was just people and knowledge. But I wanted communication to be explicit.
It’s symbolic of what we do."

Case study: Dr Anil Kumar
Head of people, knowledge and communications at the Chemical Industries

When Dr Anil Kumar saw his current job advertised at the
Chemical Industry Association, he knew it was made for him – combining elements
of his highly diverse past career in a unique integrated way.

The Chemical Industries Association represents the UK’s leading
chemicals and pharmaceuticals companies including GlaxoSmithkline, BP, Shell,
Exxon, as well as some small- to medium-sized companies. "Our overriding
mission is to help members sustain profitability, and improve recognition of
their contribution to society," says Kumar.

His own directorate has a gargantuan brief. In all, Kumar is
responsible for setting standards on education, training, science and
technology, as well as employment and and communications, to a total of 250,000
people in the industry. More immediately he is responsible for 30 people in his
own directorate.

The communication aspect of Kumar’s role is outward as well as
internal. "We are the interface between the industry and the Civil
Service", he says. And that means that strong lobbying skills are
required. But Kumar is also responsible for maintaining a dialogue with trade
unions and a raft of NGOs (non-government organisations). Indeed, he has spent
the past 18 months devising a communications strategy that encompasses all
these groups. "It’s a virtuous circle," he says. "Reputation
builds trust and that in turn builds business."

The developmental aspects of the job are equally far-reaching,
encompassing innovations in people management as well as technology and
training development opportunities. "People across the industry are not
just multi-skilling, but continually upskilling," he says.

Much the same could be said about the progress of Kumar’s own
career. After several years acquiring a raft of scientific degree and doctorate
qualifications, he joined Glaxo as a scientist and chemist. Within a year,
however, his people skills were recognised and he was poached by the HR
department to take responsibility for graduate recruitment. From there he rose
to join Glaxo’s senior management team with a brief covering training and
skills implementation, before switching his attention to science policy. At
some point in this hectic career, he also managed to fit in an MBA.

Between 1998 and 2000 Kumar got his first taste of public
policy when he was seconded to the DfEE under Baroness Blackstone, as head of
higher education policy and research. On returning to Glaxo he rounded out his
portfolio with a stint in corporate communications, as manager of scientific
policy and public awareness.

Despite this intensive career path, he concedes that his role
at the CIA "is a lot bigger and more demanding than I could have
guessed". But that suits him, he works better under pressure. Nonetheless
he has learnt the importance of delegation. "I’d have a nervous breakdown
if I didn’t." He says he enjoys the "people side" of the job
best, although he also "relishes" employment policy.

These very different roles don’t conflict, so much as balance
each other out. And a key benefit of being responsible for so many areas is
that you get a very good overview, he says, adding, "But when I’m
operating I don’t think in terms of putting different hats on – it’s all
amalgamated into my head." When it comes to juggling so many different
roles, he argues, MBA training was invaluable. "It keeps things simple. It
forces you to start thinking. I’m very good at questioning assumptions that are
taken for granted. I like asking ‘why?’"

6. The HR and finance brief

Any corporate historian will tell you that the relationship between finance
and HR has never been particularly easy. Indeed, in many organisations a strong
sense of mutual antagonism is taken for granted. As far as many financial
directors are concerned, HR, with its policies, procedures and bureaucracies,
frequently acts as a brake to imaginative deal-making and restructuring

From the point of view of HR, meanwhile, finance, with its
perennial obsession with bottom line values and cost-cutting, often appears
short-termist in outlook and gripped by the narrowest set of aims.

In recent years, however, it has become noticeable that many of
the rifts that previously divided these two highly disparate functions are
beginning to be breached. To a large extent, this can be attributed to
reforming voices within the HR profession itself.

Proponents of reform have long argued for a better
understanding of the wider strategic business aims of organisations and have
attempted to remodel the function as a viable business unit capable of adding
real value in its own right.

But there is also strong evidence of a softening of attitudes
within the finance department.

Pivotal to this has been the rise of the human capital
movement. From the moment that share prices began to be influenced by such
"soft" values as knowledge, relationships and the ability to attract
and retain talent, you can bet that most financial directors began to sit up.

The onslaught of harsher economic times, however, is likely to
test this frail truce to its limits.

How will HR with all its new values about employee stakeholders
and the importance of long-term human capital management, react to possible
pressure from the finance department for a renewed outbreak of slash and burn?

To some extent you can already see trouble ahead in the growing
adoption in the UK of US people management practices like forced grading, aka
"rank and yank". From the point of view of most financial directors,
any scheme that gets rid of the chaff while encouraging excellence in high
achievers is surely worth its weight in gold.

But seasoned HR practitioners may well point to some of the
troubling long term, decidedly "grey" implications of such a policy.
What effect, for example, would such a blunt instrument have on issues like
corporate loyalty, staff morale and perceptions of corporate fairness?

The solution may lie in the emergence of a new kind of manager,
capable of taking on the concerns of both groups and reaching a viable
compromise between the two. Step forward the hybrid HR/finance manager.

Case study: Steve Harvey
Director, people profits and loyalty, at Microsoft

The competitive spirit that defines Microsoft has been in
evidence ever since a teenage Bill Gates tried to sue the company’s co-founder
Paul Allen while they were both at high school. For evidence that it is a live
and kicking in the UK, you need look no further than the company’s director of
people, profits and loyalty, Steve Harvey – a man who left school with one

Harvey joined Microsoft as a financial manager in 1990, having
pulled himself up by his bootstraps, attending first college and then putting
in a 10-year stint at the Central Electricity Generating Board to compensate
for his disastrous education. Five years ago, he was made finance director –
and immediately found himself in conflict with the company’s UK HR department.
"I was a typical finance guy I used to get very frustrated with HR".
He loathed the invisible policies, the bureaucracy, the fact they never seemed
to know their numbers, and, worst of all in a company like Microsoft,
"they didn’t understand the technology".

The HR department, he adds, was stuck in its ways and
unresponsive to outside stimuli. "It had created little kingdoms for
itself and turned the UK into an island. There was great work going on in the
US, yet the UK was isolated. It was crazy."

Harvey’s solution for dealing with this intractable department
was simple – he would simply annex it. "I went to David Svenden (UK
managing director) and said, ‘I can do this’ and he agreed.

There followed a major purge. Harvey scrapped the department,
which then consisted of 12 people, and fired about half of them, incorporating
the rest within his own newly devised empire of people, profits and loyalty.

Harvey also took over responsibility for internal
communications, but decided against including it in the title on the grounds it
would "make it a bit long for every day use".

He then set about transforming the people function. The whole
thing was "really haphazard" with processes all over the place.
"We found 15 different offer letters," for example. "But what
really did my head in was that the department had been spending all its time
working on poor performers."

As far as Harvey was concerned this was completely the wrong
approach. "You need to concentrate on the winners," he said.

Much of the inspiration for his subsequent transformation of
Microsoft’s HR function came from a book published by Gallup entitled First
Break All the Rules.  Harvey found it
aligned with his own ideas so neatly that he called in Gallup to help formulate
the new policy, which he calls "A strength revolution". He translates
this as creating the kind of environment which "lets people do what they
do best every day".

The new order is based on another Microsoft HR totem – the
absolute pursuit of excellence.

Harvey endorses the company CEO Steve Ballmer’s remark that
"sometimes the best hire for Microsoft is no hire".

True to Harvey’s financial roots, performance management is
plays an important role in Microsoft’s new-look people management programme.
While steering clear of an outright rank and yank programme, the company grades
its employees on an annual basis through a programme called Strength Finder.
The top percentage group – "the stars" – are offered extra coaching
and mentoring, the bottom 10 per cent are left to their own devices.
"Non-performers tend to move on anyway."

Harvey denies the practice is divisive. "It’s not about
employee satisfaction, it’s about showing where we are going and what can be
achieved – and that’s what makes people want to stay." The link between
profits and loyalty, he believes, is clear-cut.

How does he combine these two very different roles? "It’s
a bit like talking to your left brain and your right brain at the same
time," he says, conceding that sometimes there can be conflict between the
people argument and issues like short-term revenues and profitability.
"But on the whole you can see the balance between the two."

Nonetheless, Harvey, who combines his many talents with an
exceptional sense of self-belief, is adamant that his "complete passion
for the people side" is a rarity among most of the financial profession.
He would never give the job "to 90 per cent of the accountants I

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