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A recent survey carried out by HRD Connect asked “What are your thoughts on Ram Charan’s radical proposal to split HR into two strands (HR-A for administration and HR-LO for leadership and organisation)? Respondents were divided and so, Tom Brown, VP HR International at Ebay joined us to share his thoughts.
A survey respondent said:
“I would respectfully disagree. Leadership and organisation can be found in most business functions (usually in managerial level) as well as administration. It wouldn’t make any sense to split all of the functions in these categories.”
Tom Brown was also critical of the proposal, here are his thoughts along with more comments from the survey:
HR has to evolve but Ram Charan’s proposal is stark in its delineations seeking solid definitions where ambiguity is so often to be found. Too many people in HR are not aligned with their businesses and worse often don’t understand even the basic mechanics of how the businesses they work in make money (assuming they are for-profit ventures). The lack of business, financial and strategic acumen is something we as a function must worry about and be tougher on throughout the recruitment cycle, but that doesn’t mean the prognosis leads to an effective functional vivisection.
A survey respondent commented:
“… I agree that it is very helpful, if not essential, for HR to have business experience, but I fail to see how splitting up the functions will raise the level of the CHRO. When all is said and done, compensation and benefits are what people come to work for so we are not talking about a trivial administrative matter.”
Tom Brown added:
HR must become integral to the business and use the opportunity of its vertical strength and expertise in Talent, OD and Change Management as well as its horizontal access to people and information to act in the function of a strategist not an organisational cheerleader and/or policeperson. HR is just starting to break into the vault of data science and analytics and as this information becomes more readily accessible the function will, and will have to, change. Using both functional and organisational data including the reward levers that Ram Charan seems so keen to pass to Finance will give our CEOS and leaders the ability to make better, more objective decisions around how to use the structure, capabilities, skills and people to deliver the optimal business outcomes in the short, mid and long term. It will also allow the function to help engage and develop every individual in the business using better, more intuitive tools and personalization.
A survey respondent who agreed with Tom Brown said:
“I split it out that way within my organisation now. There is no reason one head cannot oversee both, but I agree that the work needs separate teams focus.”
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Tom Brown added:
So, much like the some of the models before, the fundamental architecture has some soundness. However, as Le Courbusier saw the house as ‘a machine for living in’ when in reality it had to be so much more, defining HR as a machine is also too simplistic. HR must slough off (in whatever way is appropriate) the administration and administrivia that has for so long been the fallback of the function and embrace new data driven strategy, but in doing so HR should not allow itself to give up other vital levers such as compensation and benefits.
Although Tom Brown has criticised the proposal, the survey analysis does shows some support contrary to Mr Brown’s view.