Is the CHRO set to be CEO of HR Inc.

Ram Charan’s article titled “It’s Time to Split HR’ certainly ruffled a few feathers when it was published in the July-August 2014 issue of ‘The Harvard Business Review” (HBR)’. For those who have not read it, Charan made the point (among others) that most chief human resource officers (CHROs) are unable to play a more strategic role in the organisation as they find it difficult to relate HR to real world business needs.

Another report by HBR, published in 2015 that was sponsored by EY and titled “The Call for a more strategic HR” calls for HR leaders to evolve to meet the real needs of the business. One aspect of “evolving”, the article states is to get a good grip of finance which is the language of most organisations and boardrooms.

One way for CHROs to begin this journey is to regard themselves as CEOs of the HR units that “sells” services to their “clients” ie. the rest of the organisation. Now imagine that you are the head honcho of HR Inc. where you are responsible for the operational, people and most importantly the financial aspects of the "business" that you now lead. How would you run the HR organisation differently? Two things come to mind.

Firstly, you would have to deliver and add value to the operational aspects of HR at a competitive cost structure, quite possibly through the adoption of some sort of technology.

Secondly, you would need to build a core team of HR professionals that will be able to provide strategic inputs to improve organisational capabilities that delivers business value. (These days your recommendations might need to be backed up by analytical data - just in case you are still deliberating about investing in technology)

As the CEO of HR Inc. you must now ensure that 1. your “clients” are satisfied with the services that you deliver while continuosly looking out for new service offerings. 2.your core team’s level of expertise be close as possible to your “competitors” - the industry leaders in the Strategic HR consulting space 3. your “pricing” is competitive for the value that you provide and 4. you are always be on the alert for opportunities to be operationally efficient with the adoption of technology while 5. ensuring that your “employees” are engaged and aligned to HR Inc’s business objectives.

So, are you set to be CEO of HR Inc.?