CEO’s job is no longer the sole prerogative of people with line function background. Established norms and conventions are changing to pave way for the support functions like HR as they prove their worth and claim the coveted chair.
Success of any organization largely depends upon its people so long as the right ones are hired, developed, motivated and retained. If this HR cycle is ensured, one would face less of problems in terms of legal, labour unrest and attrition etc. Now the question comes up, is it the job of the HR manager only to put these things in place? Or does it fall in the purview of every manager in general and on the shoulders of the CEO in particular? The needle certainly points towards the head of the organization, a fact which drives home the point that for every manager, human resource management skill is important, may be even vital. Hence all managers in a sense are HR managers as they go through the above mentioned HR cycle as an operational task on a daily basis.
There is a never ending debate on ‘line and staff’ functions, the authority they exercise, the roles they play etc. Line managers are generally associated with authority and power to make decisions and they represent departments like sales and production while all other divisions including HR fall under the category of ‘staff or support’ teams. Their job is mostly restricted to playing advisory role across the organization while within their own department they need to carry out line function as well. An HR manager also carries out a co-ordinative function also referred as ‘functional authority’ in terms of keeping the ‘top brass’ in picture about the proper implementation of HR policies and practices in the organization. To that extent there is a need for a perfect harmony and proper understanding between HR and all the other departments more particularly the line divisions. It’s this particular function of both line and HR managers that is resulting in interchange of their roles often as being practiced by some companies. A survey by the Center for Effective Organizations at the University of Southern California revealed that close to one fourth of US companies appointed managers with no HR exposure as their top HR executives citing the reasons that they may give the company’s HR a ‘strategic boost’ and may better integrate it with other business practices of the company. Mohandas Pai of Infosys was the CFO before moving to head HR function of the company. While this is true, some companies find it absolutely essential to make their top executives go through the HR mill before allotting the corner cabin, like Lawrence Jackson of Wal-Mart had to function as Head HR for over a year to occupy its global procurement division head’s chair. Conversely back home in Dr. Reddy’s Lab we had the HR head moving into CFO’s chair once.
The point to bring home is that HR as a function is facing a continuously ever changing business environment and the managements’ expectations are not getting limited to merely HR playing support or advisory roles only. An increased tendency is being noticed to nominate HR personnel to don the line roles and more so that of the coveted CEO too.
Studies by Stanford Research Institute and Carnegie Mellon Foundation among Fortune 500 CEOs reported to have found that 75% long term job success depended upon people skills and only 25% on technical skills. Fortunately HR professionals are better disposed on this aspect and no doubt they are inching their way towards CEO’s table. A practice which started with PSUs like SAIL, NTPC and Power Grid etc slowly crept into the corporate corridors of LG, Aditya Birla, Yahoo India etc. Days are not far off when we would see more and more HR professionals claiming seats at the strategy tables and occupying the corner offices and all that they need to do is to develop their over all business sense. This augurs well for the profession.
The importance of HR needs no further emphasis as amply proved by the experience of Taj Mahal Hotel in Mumbai during 26/11 attack in 2008. Research by Prof Rohit Deshpande of HBS into the HR practices of the organization highlighted the uncommon valor of the young workers who helped the guests escape, by forming a human shield around them, and those who stayed on at their posts to continue helping the guests despite the option to flee and in the process eleven of who have laid down their lives in saving others. A typical case of ‘giving their today for the tomorrow of their guests’ or ‘HR beyond HR’. The uniqueness of the HR practices followed consists of hiring people for their attitude and character and not for academic skills, training them for empowerment and taking decisions and reward people for their performance on real time basis. The researchers reportedly found similar display of gallantry at Taj properties in Maldives at the time of tsunami in Dec 2004. Performance ‘beyond the call of duty’ appears to have become a second nature with the staff in Taj hotels, where ordinary people do extra ordinary things and where leadership and rising to the occasion apparently is the way of life. In similar lines Virtusa a 2000 head count IT company based in US but mostly operating out of India has a unique concept called ‘Every employee is a HR manager’ which underscores the importance attached to HR function as such. That is to say, HR is no longer a support function and in the current corporate scenario, it has already assumed its strategic importance, adopting an operational or a line posture. To that extent HR has become a ‘measurable’ function like ‘sales’, and HR managers are getting business oriented while performing their normal HR functions. Yet another aspect is of ‘HR outsourcing’ whereby HR managers are freed from the routine and mundane functions of HR, and they are made available to attend to more important strategic functions in terms of organizational culture, customer orientation, competitors and technological advancements etc. No doubt the HR outsourcing value world over has climbed to reach a figure of $67 billion by 2011 while it was hovering around $ 42 billion three years ago. The fact that ‘HR outsourcing’ saves HR costs by 30-40% needs no debate.
End of the day, in the present context, it is the HR head who would have made people happy resulting in high productivity, partnered in business success having played a key role in the strategy ultimately making a positive difference to the bottom line in the balance sheet. Does it take more to become a CEO? May not.
“We have different ideas and different work, but when you come right down to it, there is just one thing to deal with, throughout the organisation – that is the man”
– Thomas Watson- Founder IBM
by Dr VRK Prasad, Pro Vice Chancellor, The Icfai University, Nagaland
- Do soft skills lead to Human Excellences: T Uma Devi, HRD Newsletter Apr 2011
- The Deccan Chronicle, Hyderabad, 11 Nov 2010.
- Human Resource Management 11th edition, Garry Dessler, Biju Varkkey (Pearson)
- The Economic Times, Hyd, Nov 24, 2011.
- The Times of India, Hyd, Jan 11,2012
About the Author
Dr VRK Prasad is associated with management education for over a decade now, as the head of a business school, having published more than 60 papers, five edited books and two self authored books, on various topics of management. Presently he is the Pro VC of The Icfai University in Nagaland and also holds an operational assignment as the Director of Projects in the Icfai University Group.
(The above article originally appeared in MARCH 2012 issue of BUSINESS MANAGER.)