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FREMONT, CA: For many decades now, HR Leaders have been justifiably criticized by CEOs and line executives as having little or no pragmatic understanding of the strategic, financial or operating aspects of the business while wanting to be considered as an equal business partner to their line executive peers which is best illustrated by a seat at the C-Suite table. While the current crisis has HR leaders being seen in a different light, many still struggle to acquire that much-desired seat at the table.
Most HR leaders fervently hope for a CEO or line executive who appreciates the worth of the function and will grant them such a seat. However, most CEOs and line executives are looking to their HR Leader to chart its own path to business success and earn its business legitimacy. After decades of trying, the vast majority of HR leaders have not achieved the reputation as an equal business partner to the other executives in the company. In fairness, over the last decade or two, many HR leaders have tried valiantly to achieve HR’s business legitimacy by implementing several different approaches to the problem, but all have been unsuccessful.
Understanding the realities of your company’s business, while effectively directing HR’s administrative duties, and then selecting HR projects that directly impact the business is not for the faint-of-heart. The task is not easy, is fraught with many difficult challenges, is risky from a compensation viewpoint and is time-consuming. It is not recommended for any incumbent who enjoys the cozy warmth and quiet aspects of HR’s administrative life and is comfortable in it.
However, if an HR Leader really wants to connect the function to the company’s business and is willing to put in the necessary time and effort to better understand the realities of the strategic, financial and operating business objectives, the task can be accomplished.In doing so, he/she must think and act as a businessperson first when applying various innovative HR projects to the company’s business objectives that are crucial to its profitability and long-term strategic success.
If the HR Leader desires to pursue this challenging path, there is one hard truth that must be understood and personally internalized. Therefore, meeting or exceeding these business objectives every fiscal year is the top priority of the CEO and line executives. It should be the HR leader’s top priority too. When the HR Leader successfully connects the function to the company’s business objectives, he/she will gain the respect of the CEO and line executives as a business person, become an equal business partner and will finally get that much desired seat at the C-Suite table. In doing so, the HR leader will bring the function into the company’s operational mainstream and gain the full measure of respect from the CEO and line executives for the function’s true worth.
Every fiscal year, most CEOs and line executives still operate their businesses by setting specific quantitative business objectives in such areas as earnings per share, sales, market share, cash flow, new product introductions, improved customer care, etc., that are consistent with the company’s overall business strategy. Therefore, any HR project that can support and enhance the executive’s ability to achieve any one of those objectives in a practical way is very well received.
Preferably before the start of the fiscal year when the annual financial budgets are being developed and finalized, the HR leader should meet with the CFO to understand the critically important numbers in the company’s upcoming Income and Cash Flow Statements, and any other financial priority. With that background information, he/she should meet with the CEO and/or appropriate line executives to understand their specific business objectives for the upcoming fiscal year. For each business objective, the HR leader should ask the following question: Is there a related HR project that can help the line executive to achieve the business objective?