Article: Has HR become a service provider instead of a partner?

Strategic HR

Has HR become a service provider instead of a partner?

Has HR missed something in its journey to become a business partner? What opportunities or possible turns in the path to today could HR have taken to lead to a different outcome?
Has HR become a service provider instead of a partner?

In the 1990s, the Human Resource profession faced a challenge — a challenge that practicing managers, academics, consultants and business leaders all agreed on. There was the need for a greater connect between HR and ‘business’. This indeed, in hindsight, was an important part of the reality. Why do we say that? For the simple reason that these perceptions, inferences, and conclusions warrant scrutiny. The solutions imagined and pursued involved many leaps of thought and all these warrant scrutinies of what seemed to be self-evident and obvious then.

So let’s start with where the HR thinking was at that moment. The pedigree of HR thought was coming from many threads. The early origins come from the idea of anomie, ennui and the responses to the challenges of the Industrial Revolution, which was one thread. Imbued in the Psychology of Human Relations and the Elton Mayo Hawthorne experiments were another. At the same time, business was deeply influenced by the strong imperatives of the “market”. The language of profit and costs, at the feet of the deities of the markers in the published accounts for shareholders, informed business thinking significantly.  Underpinned with assumptions of “capital” and “labor”, the business had little patience with human science complexities. The paradigms, metaphors, imagery, and language of an emergent Human Science were gobbledygook. Small evidence of this was in the recurrent ‘noise’ around HR complexity and vagueness. The lack of ‘business results’ linkage in an obvious and linear format that the prevalent vocabulary and syntax of business was awash with, made this frustrating to business.

An interesting insight emerges as a “sidebar” of laments from the business cited above. Businesses were lead by a group of people who prided themselves in seeking the mastery of the complex sciences of “how things worked”. They sought to master the complexities of material sciences. The list was long and included engineering, physics, chemistry all the way through to the movement of money in a business, industry, market, and economy. The reluctance to engage with the complexity of “how people worked to create value” seems interesting in retrospect. This is more intriguing today. The same custodians of Shareholder value and markets have been frenetically busy preaching from the rooftops and writing furiously about this area. Leadership, “human capital”, talent, people power and such aspects of the human side of the enterprise are clearly center stage. Briefly, Human Resource Accounting made its short-lived fad status and exited left of stage quietly.

A key aspect of this unfolding has been the loss of interest in HR as a function with depth and capability in the area of HR. The rush to be better at understanding “business” has (sadly) not created a significant depth in business understanding in HR folks. It has actually devalued and “rubbished” the substantive capability and depth of HR as a functional area of expertise! This, in many ways, has polarized HR folks into those that can read a Balance Sheet, make a sales call and have good project management skills; and those who have depth in HR. The bigger tragedy of this polarization has been the anchoring of the one in a slavish predisposition and the other to a level of abstraction and obscurantism, both of which have been self-defeating. From the sublime (rarefied atmosphere of perceived irrelevance) to the ridiculous (so dumbed down that failed line managers were the best at its execution), the HR function may have laid out its wake. The forces abetting these have been the outsourcing window for HR “thinking” which of course, the business consulting community has been quick to climb through in an attempt to dislodge the HR function and to strengthen their own case for the ear of the CEO and fees.

The rush to be better at understanding “business” has devalued and “rubbished” the substantive capability and depth of HR as a functional area of expertise

So what did HR miss? What opportunities or possible turns in the path to today could HR have taken to lead to a different outcome? An outcome which would have saved the world from a few decades of significant distraction and worship at the feet of a “false deity”? And if so, what would that false deity be? 

The thinking that resulted from the signals and data then available went down a set of philosophical and intellectual funnels and led to the concept of HR Business Partnering!

The good news

The good news is that the diagnosis seems to have been spot on! At the rear of the challenge was a better understanding of business for effective HR contribution. The related capabilities, thinking, and skills to convert this into value to the business as a logical derivative again seem well-founded. 

The not-so-good news

The framing of the problem statement and therefore the implicit impact on the “solution” thinking is perhaps where we dropped the ball. The question (implicitly or explicitly) was framed around the following. The issue was assumed to have a “partnering” solution rather than a solution that had HR as a “part” of business! The solution sought the use of the term “Business Partner” and its related baggage. This seems to be the formulation that took us down a veritable rabbit hole. A consequence of this choice has been to place HR “outside” (in some sense) the business. The key question also is an equal or unequal partner? The partnership involves sharing significant common and mutually beneficial values and approaches. HR has unfortunately become a “service provider” and in the bargain has actually lost the partner status, much more, has moved further away from being a “part” of the business. Would the possible elements of servility, inadequacy and “partnering” have contributed to some of this?

More than a decade of yearning for a "seat at the table" unfolded — a decade of a pursuit of this seat by begging, lamenting, blaming, and servility. Rather than mastering our "trade" in the context of business, and focusing on being business ourselves, did we expend our energies in the worship of a false deity of our definition of a Business Partner?

HR has unfortunately become a “service provider”, has actually lost the partner status, and has moved further away from being a “part” of the business

Other functions like marketing, finance etc. have deepened their expertise and ability to add value as a part of the business without hankering for a “partner” epaulette. They have sought to excel at their "trade". The dimension of being responsible to the customer, the regulatory framework and investors are indeed anchored by them as part of business-as-usual. 

The sense of fair play and equity (as indicated in the “employee champion” dimension of our partner model) jumps to life more in its grievance handling and transaction management role, ignoring the strategic elements of the role in system design and institutional outcomes? So while HR has progressed from a “union manager”, ivory tower, and “politician”, it may have wandered into an exclusive worship of “transaction service delivery” at the cost of all other aspects of its role? How important would this be today in the “non-union” context that most HR folks have to operate in? If, as consumers of financial service the same population is happy with self-service and an apps regime that has made their financial transaction management world so different – what does this say for our worship of “transaction service delivery”?

So, quo vadis HR?

Some key pointers to a more effective function are indicated and evident from the above. 

HR needs to be part of the business and this requires three key elements: 

  1. A deep and relevant capability of HR (as an applied science that “creates value”).

  2. A Business understanding — insight, language, vocabulary, and positioning of “real value”.

  3. And finally, an outcome orientation — getting things done rather than merely undertaking activities. 

The success of organizations and the HR function will inevitably require the creation of a sustainable competitive advantage through HR depth, set in the unique business context of each organization. It will need the simultaneous deployment of thinking, knowing, doing, and getting done capabilities. 

So really what’s different? Firstly, in the knowing area, we really need to have a degree of scientific depth in our own field! Not merely the academic knowledge of the research and theory of an “imprecise” science, but its applicability, potency, and limitations. We have all experienced and observed the yawning boredom of students in the classes of the bastions of Higher education in HR and the matching andragogy disasters of the teachers. Similarly, the host of development programs offered by various academic institutions, consulting firms, and professional bodies are more focused on the business “partner” model and understanding the business language from an “internal service provider” perspective. The depth of HR naturally suffers in this format. Also, a victim is a perspective of being “part” of business? So the "Know what/Know How/Do well" side of HR remains an unaddressed gap.

Secondly, the understanding of business suffers neglect in the understanding of the points of value creation and value destruction in a business, and hence the opportunities for HR contribution in those spaces.

Thirdly, the emphasis on creating "outcome value" propositions and advocating those credibly within the business is key. This also means measuring what really matters to the business and not merely “universal” good things. 

The deity to worship is "creating a sustainable competitive advantage for your business." 

The bottom line on the clarity of the HR role? 

Get good at what you need to. 

Create outcomes that matter. 

Measure and be guided by what really matters. 

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Topics: Strategic HR, #BuildingHRCapability

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