“Human resources is not your friend. It’s there to protect the company.” What did she say? I thought my friend was making a joke based on my recent articles why CEOs should be losing sleep over the state of their human resource departments. That they are often neither human nor resourceful and need to evolve beyond “compliance cop.” My friend wasn’t joking. She was reading me the headline from a recent piece on Marketplace. Then, she read me this line from the article: “Turns out, the role of HR was never to protect employees. Their number one priority was always to protect the company. It just so happens that sometimes the two align.”
And that’s when I realized that human resources – in an age when the individual defines the business rather than the business defining the individual – doesn’t just need a strategy for evolution. It needs a complete shift in mindset from top to bottom: from human resources to human capital and resources.
The alignment HR needs to drive is between individual capabilities and what the role in an organization those capabilities can solve for. The problem is organizations try to align those capabilities with job titles and functions. The difference between the function and what it solves for is the difference between human resources and human capital. That’s why the term human capital is so important. Human capital is how people contribute to growth. It is about allowing the individual to influence more. The individual needs to define the business – and thus should define the work that HR does.
HR can’t just be a compliance cop protecting the company from those pesky employees. It must empower employees who want to help grow the company and evolve to achieve their goals, too. In addition, HR can’t just be about data either. Not everything human can be optimized through data – and looking at the data is no replacement for having insight and listening to people.
That’s what’s getting lost in all these discussions of HR: people. Humans, like employees, are a group – a species if you will. Something to be studied, controlled, defined. People are individuals. We can’t forget about the people.
To understand this more, I naturally turned to a company that deals with . . . animals. Pets, specifically.
Banfield Pet Hospital, based in Vancouver, Washington and part of Mars, Incorporated, is the largest privately owned general veterinary practice in the United States. It operates more than 1,000 veterinary hospitals, including hundreds located inside PetSmart stores. The company surely knows more than most about the importance of the pet-human bond and how pets can even positively impact workplaces and employee well-being: dogs have been welcomed at Banfield’s headquarters for decades.
The question was, how much did Banfield understand about the human-human bond and the needs of its 17,000-plus associates? Like you, I’ve met plenty of leaders who treat their dogs better than the people they work with and even their families.
Turns out, Banfield felt the same way and is in the process of aligning its human capital needs with its growth strategies. The company may be in the pet business but their people connect to others through their pets. They are a service organization in which people deliver the service. Perhaps unsurprisingly, Banfield doesn’t even call its HR department human resources. They refer to it as People & Organization. Last year the company’s newly appointed president, Brian Garish, was looking to evolve the way the department connected to, well, the people and the organization.
“Why would you not want someone to help you develop your best asset: people, which is human capital?” Garish told me. “The chief HR person can set the tone for the entire organization that people matter. They can lead on how to develop people. They can truly deliver value and the vision you want to create. They can understand how to get the most out of individuals and make them better leaders. HR can ask the open-ended questions to the leaders responsible for developing those individuals and create dialogue around development: How are you doing around this? What can we do to help? What resources do you need?”
Problem was, Garish struggled to find people who had any experience doing this work and asking these questions internally or externally. They were trapped in the templates of the past – the version of HR where the business defined the individual and efficiencies was more important than a human touch.
“We screened dozens of chief HR executives and very few actually talked about developing people,” Garish said. “I didn’t want compliance people. I wanted people who could understand behaviors, thought processes, and individual development. I’m less concerned about whether you understand compensation and benefits or have rolled out a cutting-edge training program via an employee’s cell phone. You can teach someone comp and benefits. People intuitively getting people and the role people play in delivering on a strategy? That’s more difficult.”
In the end, Garish promoted Stephanie Neuvirth to be Banfield’s senior vice president of the organization’s People & Organization department. Neuvirth understands the responsibility she has, a model for where HR needs to go, working with leadership across the organization to enable growth:
“Our shared accountabilities regarding culture, talent development, aligning teams, the next generation workforce’s use of analytics and insights, artificial intelligence, and designing talent strategies will unlock the organization’s full potential. HR must share accountability for all that – in all areas that require functional expertise.”
In other words, HR must move beyond facilitating administrative processes to leading transformation from the center of the organization, especially in these uncertain times when managing growth is not enough.
“In leading organizations, HR is already a strategic and collaborative co-pilot to the CEO, and partner to the senior leadership teams,” Neuvirth adds. “This must continue during times of high change, volatility, complexity and ambiguity. HR must collaborate with finance, operations, marketing, IT, and strategy departments to help solve business issues and enable business outcomes. We need to leverage data and insights we hold to tell a strategic story and to design solutions to strategic imperatives impacting the company.”
To be that kind of co-pilot – a perfect analogy for the role of HR, requires the kind of business acumen, strategic and organizational agility, and ability to influence business decisions with use of data, analytics, and insights that CEOs and presidents (i.e., the pilots) don’t give them. If HR is going to do more than facilitate administrative processes and lead transformation it must not only be empowered to do so but also have the ability and desire to play a more intimate role within those other departments to identify and better understand what their people need and what the departments need to drive growth – both within the department and throughout the organization.
Meaning HR has to be responsible for leadership development for the future, not just today.
Garish understood this when he appointed Neuvirth: “People want feedback. They want to be involved, want to know if they’re doing a good job. They also want to know where can I go — what’s next in my role? Someone may be happy as a chief marketing officer, but maybe they want to help transform the company and need the right development. CEOs have got to understand that and create those conditions, developing senior leaders, developing direct reports, developing people who want to be in bigger positions within their organizations in the next five years. We’ve got to make sure that we keep taking care of our associates and having more leaders who replicate what we are doing, so we can ensure the sustainability of our organization to deliver on our strategy.”
For him and Banfield, HR solves for this. HR asks the big questions: Does the organization have what it needs to execute its strategy and grow? Is it investing in human capital to do that – now and for the future? Are we trying to create an environment where we’re telling people how they should operate, or are we giving the individual room to contribute more? Companies like Banfield provide structure but give the individual room to influence business outcomes. It also helps the company compete in the marketplace. As Neuvirth notes, “There’s significant competition for talent. Ensuring and enabling the right talent, in the right roles, with the right capabilities will continue to be a huge people and organization strategic challenge.”
In the end, people like Neuvirth have lots of new tools and data – people analytics – to help understand this. But in the demand for people analytics, we can’t just become data geeks but human geeks. They must solve for inclusion and individuality with their insights and that means also having intimacy with the people beyond a spreadsheet. The need for data may be growing but what about those who can actually listen and look beyond the data?
People analytics are a vital part of running a high performing company but better to think of it as people and analytics. You don’t need data to know that the most loyal and happiest employees are the ones who have the opportunity to grow themselves and align that growth with the growth of the company. This is what individuals want and they are defining business today. This is what the HR of the future must be about.
For organizations to evolve, it’s time for human resources departments to become human capital growth departments.
/8 Jan 2018 / Forbes