Date: 06/02/12 Duration: 00:24:40
In this podcast Chris Roebuck, visiting professor of transformational leadership at Cass Business School, Gill Rider President of CIPD and former Civil Service head of HR, Robert Booker, HR Director at BG Group plc, a global gas organisation, Michael Chivers, Corporate Vice President Human Resources at Sony Ericsson and Ed Griffin, Development Partner at D3 Partners and Interim HR Direct at Chime Marketing, take a controversial look at HR.
View the full podcast transcript
Chris Roebuck: The real challenge that HR has, in a nutshell, is that in its enthusiasm to be a business partner what it’s doing is it’s actually overcoming its ability to deliver solutions to the business and has started to deliver HR products to the business and that's what the business doesn’t like because when they look at it what they see is something that doesn’t actually solve the problems they think they have, it solves the problems HR thinks they have.
Philippa Lamb: That was Chris Roebuck, visiting professor of transformational leadership at Cass Business School and, as you heard, his thesis is that far too many HR teams operate with nowhere near enough insight into their organisation and its business goals. Gill Rider is president of the CIPD and a former head of profession for civil service HR and according to her, Chris is absolutely right.
Gill Rider: Too often you hear chief execs and maybe we need to listen to them more, you hear chief executives saying, “I love my HR person, but the HR organisation doesn’t quite get it,” well that can’t be right can it because it means their HR director isn’t delivering the business savvy, the business knowledge through HR that the organisation requires and that's what we've got to get to.
PL: So what does HR need to do to become genuinely aligned with the core business? Gill mentioned business savvy but is this any different from the proverbial seat at the boardroom table we've all heard so much about?
GR: We’ve been constantly talking about HR people need to have business skills. We're saying actually this is a different level of business skills. This isn’t just knowing your way round and how to get things done. It’s not just about how people in the business work together, it’s not just about the processes, to me it’s really about, pulling together all the information and the data that's going on in the organisation. the economics, the employment data the sickness and absence, the cost of recruitment, all of that and having some really deep insights into how you can achieve business performance through pulling the levers about people.
PL: Ed Griffin is development partner at D3 Partners and interim HR director at Chime Marketing and he has an even more detailed definition of business savvy.
Ed Griffin: So business savvy is about a deep and comprehensive understanding of the organisation. I think fundamentally it’s about understanding what makes your organisation viable. So that's about understanding where does the funding or the finances come into the organisation. It’s knowing who are the people who bring that in and who are the people who support those who bring in the money. So what’s the relationship between what your people do and the value that achieves the purpose of the organisation. I think there's also something about understanding how your organisation really works in terms of its processes, its procedures and its systems, and then there's a piece which is about the human dynamics. So it’s about understanding what you might call organisational politics, who’s really influential and who’s not, who are the noise makers but not necessarily the powerbrokers. And then there's a massive external piece. So actually business savvy is about understanding what’s going on outside your organisation, what’s the context within which your organisation sits. It’s about understanding your customers, it’s understanding the competition, it’s understanding how products and services are developing in your field. It’s about being able to get in the mind. I think somebody said once if you’re not serving a customer you’d better be serving someone who is. So it’s that proximity to the people who are the beneficiaries of your organisation and its work.
PL: So it’s not simply about function or process and it requires an awareness of the business at every level, from the people and the product to the competition and the wider economy and all that adds up to a real leap forward from traditional HR.
EG: I'd argue that HR should be doing this and in many cases there are HR folk out there who are doing this, that actually have this interest, have this passion about their organisations. I've come across examples of HR directors who have been told by their chief exec they know more and care more about the business than they do themselves and I think, you know, perhaps there's no higher accolade than that.
PL: Knowing more about the business than the CEO him, or herself, is no small order and while being in sync with the CEO is clearly central to the HR role that can present problems too. Chris Roebuck thinks the difficulty there is frequently rooted in a fundamental attitude clash.
CR: The key issue is that in many organisations HR is effectively reactive particularly at operational level. It needs to become more proactive. HR also, by virtue of what it seeks to do, has a tendency to be risk averse so it will design systems that will attempt to minimise risk. Business doesn’t operate effectively and make profits by minimising risk, business makes money by managing risk. HR needs to take that attitude as well.
PL: What will it take then to bridge this gap between the business outlook and the HR mindset? How would a truly effective insight driven HR think, operate and plan? And is all that a skill set that can be taught? Here’s Gill Rider again.
GR: You can go on business school courses, you can do modules, you can do all sorts of things that will help but ultimately you have to take responsibility for your own development. I always used to, when I first started doing this myself, is the finance directors are so, you know, they’re of a type but they love to talk and if you ask them to explain stuff to you they will really help engage you in how payroll fits into the P & L, how much we can afford, what we could do differently, and just talking through those questions are great. So I always say to people, “Go and grab your nearest finance person, buy them a cup of coffee and then just ask them the questions, they’ll really help you understand.”
PL: Here’s what Ed Griffin thinks.
EG: It requires you to be curious or inquisitive, to be bothered to go out and find out about stuff and be interested. I think it requires you to be quite analytical at times because it’s not just about gathering huge amounts of data about all sorts of things you need to make sense of it as well. So there's something about your analytical ability to make sense of the information that you’re actually getting so then you can provide insight with it and I think one of the key behaviours that you need then alongside this is the courage to challenge.
PL: In any business the buck has to stop with the bottom line so it makes sense that true business savvy HR has to be able to speak the language of numbers. Unfortunately the reluctance of many practitioners to engage with that side of the business can be a real sticking point. Gill Rider.
GR: Most HR people really understand the value of learning. So they do understand that they’re on, themselves, on a continuous learning journey through their career and you do see HR people really very, very deliberately learning, but this is learning beyond the HR functions, this is learning about what makes the business tick and being really, truly numerate about what makes the business tick and I think that is a bit different. I remember arriving in the civil service and meeting an HR person who cheerfully told me that she doesn’t do numbers and I was just, you know, I'm sorry but you can’t be in HR and not do numbers because everything that we are doing is about money and it’s about people and it’s about productivity and you've got to be able to articulate every step of the way the business cases, the issues, the investments that we're making and that's all about money and numbers. And anyway it was an interesting conversation.
PL: All the behavioural traits that Gill and Ed have pointed to as crucial for business savvy HR are summarised by Chris Roebuck in his theory about entrepreneurialism. It’s become a bit of an employment buzz word these days but for him it does encapsulate everything that's needed for insight driven HR.
CR: The greatest change that HR can undertake now that will make a real difference to its credibility with business is actually to stop being an HR business partner, to stop being outside the business and to get into the business and become an HR entrepreneur.
PL: This involves a multi-tiered understanding of organisational, contextual and business savvy and that's not all.
CR : The icing on the cake and what is absolutely the critical component in being an HR entrepreneur is an entrepreneurial mindset where you take time to be proactive, you take time to manage risk effectively so you are creating solutions that allow the business to do what they need to do, slickly, effectively and quickly. You need also to have clarity about what you do and what they do and you need to be proactively innovative in finding new solutions and in reconsidering your legacy systems to make sure that they are fit for purpose for an entrepreneurial world not a static world.
PL: Robert Booker is putting business savvy into practice. He's HR director at BG Group PLC, a global natural gas organisation and honorary treasurer of the CIPD. A trained accountant he quit his finance job 12 years ago and joined HR out of sheer frustration with the HR function in his own organisation.
Robert Booker: Well I went through a variety of different iterations of a finance career, ended up at Citigroup in New York looking after risk management for derivatives and structured products. It was a great job but I had an awakening one morning that I realised I spent more than half my time on people-related issues as a manager and the HR function were generally the ‘No’ police. They never came to me and said, “In six months time you’re going to have this problem here’s how you might think about fixing it now,” it was always, “No you can’t do that, no you can’t do this,” Where’s the help? Where’s the proactive support? So I thought to myself why is it that every place I've worked I've had this experience from HR perhaps I could have a go at trying to understand a little bit more about how HR functions from the inside and see if I can do something different. It was a fairly lofty ambition but that's what I decided to have a go at doing.
PL: So you came at it as a hardcore numbers and operational person and decided that it just wasn’t giving you the support you needed to do that job?
RB: Probably the archetypal nerd actually, numbers nerd, but yes that's exactly where I came at it from.
PL: So before we get onto the kind of question of how that's played out in what you've been doing subsequently on the strategy front was that a good shift for you because you are a numbers person? So how has that worked for you?
RB: Yeah I mean I've absolutely loved it actually it’s absolutely exceeded all of my expectations and I completely think it’s the best job in the company, in any company. If we position ourselves properly I think HR professionals are at the heart of all the decisions. It really is, and I know everyone always says this it’s a hackneyed phrase but it really is all about people, getting the right people in the right jobs and being the adviser to the organisation to make those decisions.
PL: His accountancy background gives Robert a really in depth understanding of the business mindset so when he arrives to BG Group in 2006 he began formulating an HR system with the specific aim of aligning itself to the business strategy.
RB: So what I did when I came into the role was to really simplify it, to remove some of the HR buzz words and try and talk more in the language that the business would understand and hopefully would play back to us.
PL: What sort of buzz words?
RB: I'm afraid it’s really incredibly simple. We call our strategy ‘Identify, Equip and Engage’ which my chief executive played back to me once as, “What you really mean is get ‘em in, train ‘em up and turn ‘em on,” which I thought was quite a nice way of, well I thought that obviously works he's playing it back to me straightaway. So it really is pretty satisfying actually to see that…
PL: So you've really rooted that in the organisation?
PL: So what does it mean to you day to day because you are very closely rooted in what the business is trying to achieve aren’t you? So how do you maintain that understanding?
RB: Well for me I very fortunately sit on the executive committee, report directly to the chief executive and so a large proportion of my time is actually on the broader business decisions so I really do feel that I have the proverbial seat at the table and it’s very clear to me how important HR is to our organisation. In fact we were recently considering different organisational structures and the chief executive said, “The one thing I will absolutely not contemplate is not having HR at the table, it’s essential to me that you’re at the table.”
PL: Michael Chivers is currently corporate vice president, human resources at Sony Ericsson. Sony and Ericsson merged back in 2001 but when Michael joined in 2007 the challenge to align the two companies with their different cultures and values was still a big issue.
Michael Chivers: From an HR management perspective it was how do we create a single HR organisation and how do we create a single people strategy and how do we move away from the low level process activities? How do we systemise insource, outsource, the low level process so that we can invest time in partnering the business to cope with this massive disruption? It was creating this single Sony Ericsson, single HR, single people strategy and getting the whole organisation galvanised around a common set of targets and objectives.
PL: So the challenge for you really rested around you having a deep understanding of the business didn’t it and the difficulties it faced because as you say the straightforward answer would have been to get these siloed bits doing their own thing but for the business as a business not an HR objective, that wouldn’t have worked? Where did you acquire the understanding you obviously have of how the business works?
MC: By working really closely with the executive and leaders in the organisation and doing what HR people actually have a habit of doing which is being noisy and asking questions, being interested in the business and interested in the numbers and interested in the technology. When I got into Sony Ericsson I became a gadget freak. My kids now and my wife, as I say, take the Mickey and they say, “Oh you’re always playing with new toys,” and I just got really
interested in understanding the business.
PL: Again this makes the point that HR must respond to business needs rather than just arbitrating on what is and isn’t possible.
MC: It’s no good saying to a leader or a manager, “No that's the policy,” you actually have to understand, particularly in a business that moves as fast as the mobile phone business what’s the business objective and maybe the policy’s wrong or the process is wrong. So unless you engage in the business and understand how the business is changing you’re caught on your back foot, you’re replying with historical policy or a historical process and you’re anti-business. So you’re absolutely right it is a different approach.
PL: As Chris Roebuck pointed out HR needs to embrace risk and Michael’s experience at Sony Ericsson has taught him the same that an entrepreneurial attitude is a vital part of practising business savvy HR.
MC: When you start asking questions about the business and you start getting involved in the numbers you actually put yourself at some risk because you start making decisions that have high impact and in our story we had to be playing in front line in delivering significant op ex change, cost of sales change and I think a number of HR people tend to get hooked up in avoiding those risks or avoiding those conflict situations and saying, “Well that's the role of a transformation manager, it’s the role of the project team. I can give you a process for dealing with the redundancies, I can give you some of these other things and tell you how to manage the compensation,” but they don’t actually want to go running up onto the pitch and play the game and maybe be leading the game, they like to be a coach in the grandstand watching the game taking place. I just naturally like playing the game.
PL: BG Group’s oil plant in Tunisia employs many ex-pats as well as Tunisian locals. During 2011’s Arab Spring the country rapidly descended into chaos and Robert Booker found himself having to use every level of business savvy HR to cope with the situation.
RB: We actually provide a very substantial proportion of the gas to the Tunisian electricity production. There was a prison right next to our plant that everyone broke out of and people were ringing up from the country and you could hear the people in the background screaming, “Keep them out, keep them out,” and it was absolutely terrifying. At that particular time the people focus came to the fore and we took a decision to evacuate all of the ex-pats, understanding that at that time that could mean that the electricity supply to the country ended up failing which would make a simple unrest significantly worse and that was a very, very difficult and tough decision to make but I think being the HR director at the time when that happened gave me a particular confidence to say well we put our people first and we've got to look after them and evacuate them.
PL: But as you say you really do need an understanding of the implication of that decision don’t you?
PL: Because that could have been really radical.
RB: It could absolutely have played out on the world stage. If we’d plunged Tunisia into darkness and of course I don’t want to be dramatic but all these thoughts go through your mind as you’re sitting there thinking, ‘What on earth am I going to do?’ Fortunately it turned out successfully but it could have gone either way.
PL: Today’s demanding business climate means that the impact of really effective business savvy HR can be extremely powerful. Here’s Gill Rider.
GR: What is happening with all the changes in the economic situation, the political situation, the lack of trust in our leaders, the demographic changes that are going on, this whole thing is coming together and I'm sensing an absolute acceleration in what’s being required and the magnitude of what’s been required. So the issues aren’t new it’s just that the pace of change is now really significant and I'm seeing organisations that I know and love extremely well that are just going through the cycle of downsizing and then growth and then downsizing again so fast that it’s extraordinary and so to be business savvy and to understand how to translate what we do into achieving results, end results for business performance at this point in time is just really, really important and so yeah I am very much seeing an acceleration in all of that.
PL: And it’s core to the job.
GR: It is absolutely core to the job.
PL: When you’re a senior HR practitioner the doors to the rest of the organisation are easy to open, make it simpler to get involved and gain personal credibility but how can you do that if you’re lower down the ladder? Ed Griffin recommends getting people to tell you what you need to know.
EG: I really like some of the marketing mindset. So rather than brand thinking about reputation and the idea of a reputation hierarchy where if you start at the lowest level you’re not know and then you get known but people might not know why, then you get known for something distinctive which may or may not be good and then you get known for something good and ultimately the top level of reputation is about being trusted and forgivable and I think that applies to individuals and organisations. So there's something about just thinking about, ‘Okay what is my reputation today? What do I need to be known for in order to be more effective to be able to contribute greater value to the organisation?’ So I think you pick your battles carefully and you actually need to think about who needs to hold you in that particularly reputation as well. So I think the starting point is often about identifying critical people outside of HR with whom you have a good chance of being more influential, people who kind of get it, who are interested and have an appetite for good HR practice and you need to then identify what are the issues they face? What are the problems they might have that actually you can provide some of the solutions to? So this is part of, I guess, the political savvy, the knowhow of how you can have greater influence.
PL: Chris Roebuck has an even more straightforward starting point.
CR: How many HR functions would seriously consider looking at all the legacy systems they currently use to support the business and say, “Actually let’s go back and get a blank piece of paper and work out how we would deliver what this business requires in a simple business-focused and entrepreneurial way,” and then take that blank sheet of paper that has got those ideas on it and compare it to what they’ve actually got and if there's a difference they should ask themselves why is there a difference and should we not be using what we've just written on that piece of paper rather than the things we've been using for years? And that's a very simple test and that actually can be done with the business on a day to day basis.
PL: And according to Gill all that HRs really need to get on board with this is confidence.
GR: I just think there's this thing that affects all HR people that, you know, people think we're dealing with the soft stuff and we're not we're dealing with the most hard stuff but there is a bit of that that's held against us and then as a consequence to that in some organisations you can fuel into the feeling second class citizen-y because you’re not the finance person and you’re not the first person at the table and that knocks confidence and as the confidence goes then again you’re into, not a virtual circle but the other one, downward spiral, and so I think there's a real virtual circle if we can get it right of HR people being business people, contributing, being therefore more valued by line managers, making a greater impact and that will be a wonderful upward spiral if we can get onto that.
PL: And of course we’ll tempt the brightest and the best in at the bottom.
GR: Absolutely and I do, you know, if I could believe that the kids I know that are graduating at the moment could go into HR and be always in places where HR was performing at its best you wouldn’t hesitate to recommend it to them as the career for the brightest and the best.
PL: The CIPD’s profession map is a great starting point to help you plot your path to becoming a business savvy HR professional and you'll find a lot more information in the show notes at www.cipd.co.uk/podcasts.
The CIPD will be launching new research into business savvy at the HR business partnering conference in March and you can find more details about that on the website.
Next month we're off to Coventry to find out about the CIPD’s youth mentoring initiative and finding out how HR can play a vital role in getting unemployed people into work. Join me then.