Rare is the HR neophyte who has not been taunted by other employees, saying: "You guys earn more than we do for doing less work and with no accountability." Rare is the HR professional, a few years down the road, who doesn’t say (maybe, sotto voce) the same thing about Group HR. I think both comments are grossly unfair. Since Group HR has few defenders, even within the HR community, I would like to take up the challenge of explaining the vital contributions it can make to building the character and spirit of the group in the right circumstances. Before doing so we need to distinguish between the different styles of parenting Group HR can adopt. These, in turn, depend on the relation the group has with its constituent businesses, geographies and units.  

Easiest to understand is the structure analogous to the parent of a pre-teen who may permit all kinds of palaver but whose decision is final at the end of the debate. This is the classical single company or Single Industry Corporation (SIC). There is little ambiguity and it is very clear where the jaw-jaw stops and the just-do-it begins.  

At the other extreme are parents who share homes with grown-up children for reasons of convenience or economy. These children will very likely contribute financially to the household but there will be few other dos and don’ts imposed on them. Private Equity Type (PET) of oversight, even when it extends to some domain-related guidance, operates in this mode.  

Matters get most interesting right in the middle of these two extremes, as anyone who has brought up a teenager will know. It is in this Multiple Industry Conglomerate (MIC) space that we come across the most innovative and resourceful Group HR outfits. This is not to say that pre-teen and adult parenting can’t borrow some of the mechanisms useful for managing teenagers but it will be rare to have the entire gamut in play.  

It is obvious that hands-off PET oversight has the least possibility for synergistic gains between units under that umbrella. SICs are better at transmitting inter-unit learnings but the fact that disagreement can finally be overcome with an order is neither conducive to eliciting the maximum creativity from each sub-part nor extracting an optimal conclusion through dialogue and dissent. MIC Group HR can get the richest returns from its diversity provided (and precisely because) its parts are not obliged to adopt more than the mandatory minimum (and even in the framing of that base they have a say) group guidelines. As a result, only the best-designed and practically implementable processes survive the evolutionary fitness demanded in this federal hurly-burly of ideas and opinions.  

Within the limits of its parenting role, Group HR can add value in three ways. These are through shared Principles, Processes and People.

Principles of Governance  

Principles are by definition mandatory, even if the area they cover varies immensely from skimpy PET bikinis to blizzard-proof SIC overcoats. For convenience we can divide them into Core Values, the Employer Value Proposition and Critical Approvals and Reporting.  

Earlier writings have gone into some detail on how to establish and enshrine Core Values through a Fair Organisation Code ¹.  A code, however, is an empty declaration unless steps are taken to live values, propagate them and review conformity. Equally important are policies and mechanisms for hearing complaints about transgressions and how to remedy these. Group HR can be an ideal staging point for employees who are seared by value non-conformity to seek resolution before going to the Board or an even wider public with their concerns.  

A significant part of the Employer Value Proposition (EVP), essential for de-commoditising a corporate offering, must come from individual companies/units. When these are part of a MIC, however, it would be a great opportunity missed if they (particularly newly formed units which have not had the time to demonstrate their individual EVPs) were not to seek an additional boost from a group EVP. Moreover, when the group wishes to gain the benefits of a branded cadre to attract young, top-quality talent from campuses (see 'People Leverage', below), the lack of a group EVP could be a fatal deficiency.  

Approvals are sought from Group HR mainly in SICs. Reporting, of course, is another matter. Generic reports, of the kind suggested for an HR-involved Board, should be a good starting point for designing a Group HR information system ².  In addition, business-differentiated reports reaching Group HR should reveal the state of health of the people-related core competencies specific to each unit. Both group and business level reports should reveal EVP performance so that those facets remain attractants rather than becoming only airy intents.

Process benefits  

While values are relatively immutable, processes demand both creative design and continuing innovation. It is critical that Group HR make the correct choice of the people processes it will own, how it will organise them and the extent to which the Group CHRO will personally participate in each.  

Choice starts from identifying processes that make strategic sense to operate group-wide, as well as the degree of sophistication (and, hence, investment) as well as the platform to adopt for each. Mission-critical HR processes are best tailored in-house. Involving HR talents from businesses/units at the stage of process conceptualisation can yield significant dividends in terms of diversity and practicality of thinking as well as eagerness for implementation.  

Organisation takes over from (though it frequently overlaps with) the design choices. Deployment of the process may have to be outsourced, particularly when the implementation demands specialised expertise or feet-on-the-ground not available or sparable in-house. Either way, Group HR has to own the tracking and course correction. I have frequently found it very effective, especially in the case of smaller MICs and SICs, to place the Group Centres of Excellence under the oversight of gifted business/company HR heads, who have both a better idea of where the operational shoe pinches and welcome the opportunity to experience other industries/technologies and sophisticated specialist roles in HR as preparation for their own career advancements. Periodic reviews and, if necessary, redesigns are also best handled at 'federal' forums where several of the business/company HR are present both as process providers and as users.  

Personal participation of the Group CHRO is obviously needed for all processes that impact people's decisions above a certain level (including appointments, rewards, development measures or funeral marches). The shoulders of the Group CHRO must also be available for CEOs from businesses and Group CXOs to sound out and, sometimes, cry upon (yes, that’s a process too!). Finally, there are processes, that may not normally be considered fit for elevation to group status but with which the Group CHRO should get personally involved, because of their strategic or social importance.

People leverage  

Placing the people resources of a group where they can make the greatest difference (even when local optima have to be sacrificed in the process) has to be a very high priority for Group HR. It is achieved through group cadres, sector-agnostic functions and individual mobility.  

Group cadres can prove the subtlest and most positive means for conglomerates to hold component companies together. Take the case of the Tata Group where the Tata Administrative Service (and a magnificently located training centre) were the only semblances of a Group HR activity for decades before an actual department was staffed centrally³.  I can vouch for the value-dissemination and cultural cohesion role such cadres can play from personal experience. Managing loyalties, multiple pulls for the best talent and finding careers for such ambitious people, present many difficulties. However, those conglomerates that can overcome them, gain a competitive advantage unmatchable by standalone companies.  

Sector-agnostic functions, such as HR, Finance, Strategy and Information Technology, doubtless have an industry / technology flavour but the common, professional component predominates. In fact, as the variety of industry / technology exposures increases (e.g. through transverse mobility in a MIC environment), the facility with which professionals can apply the core principles of their discipline to varied scenarios also grows. The developmental exposure is ideal for increasing agility and for preparing professionals for group roles in these functions. Movements across company boundaries do not happen easily in the absence of a powerful Group HR and the active interest of the group head for that function. When these two ally, talent of great richness is available for transverse functions in conglomerates – again denied to standalones.  

The most obvious people leveraging advantage is, of course, individual transfers between group companies. These are normally at CEO / CXO levels, though proven specialists in scarce talent domains are also part of the flow. Transfers are only the most permanent of individual talent sharing mechanisms, and they should ideally be outcomes of a robust group talent management process. More transitory resource sharing can include deputations, advisory committee involvements and plain advice There are many reasons why intra-group people movements score over external recruitments. From the organisation’s point of view, an inside view of the person’s strengths, weaknesses, networks and track record, reduces risks considerably. The CEO / CXO being transferred too is more willing to make the change because there is less information asymmetry than in charting a totally unknown environment. Moreover, understanding the group’s culture and its expectations from senior level roles can provide a head start to a transferee. The decision is further eased when it comes with continuity of service and, in rare cases, the possibility of reversion to the earlier firm or an alternative posting within the group. At all stages of this process, starting with the crafting of mobility rules that make moves less costly or risky, proceeding to the shortlisting and final the choice by the company and culminating in guidance and support to the individual CEO / CXO, Group HR has to play an active role, which is irreplaceable. In its absence, the group can score no better than individual companies in making senior appointments.

From good to great Group HR

Group HR in MICs needs three prerequisites to realise all the benefits we have been describing. These can be conveniently grouped under Culture, CEO and CHRO.

Culturally, unless there is a strong commitment to upholding certain core values and standards of doing business, there is no point in making a huge investment in value establishment and dissemination efforts or the substantial overhead of Group-wide cadres, that may additionally be used as a value-binding adhesive. Similarly, if the instinctive reaction of the group leadership is to look outside for help, an internal Group HR will remain a costly but inert showpiece. The test of whether HR is valued and intended for use as a group competitive advantage is its position relative to other group functions. Unless HR is at least on par with these and is present at the top table (and at the Board, if the Group has multiple Executive Directors) we can kiss its effectiveness good-bye.

Just as important as the general culture is the CEO’s thinking and attitude. Before checking the CEOs HR-philia (or phobia), it is necessary to confirm whether s/he has influence over individual businesses, which is not always the case. Assuming the group CEO has power, next comes the manner it is wielded. The safe sea for Group HR to sail lies between the Scylla of CEO disinterest and the Charybdis of CEOs with set opinions on HR minutiae and high interest in their own pet projects. Finally, and possibly most important, is the chemistry of trust and liking between the group CEO and the Group CHRO. When this exists, mundane efforts yield miracles. Without it, all the other preconditions we have listed amount to zilch.

Let us turn, at last, to the other element in the CEO-CHRO compound. There are many capabilities all CHROs need but three are particularly important for the Group CHRO role. These form a Triglav (a three-headed Pomeranian deity). The central head is responsible for materialising or catalysing results relating to Principles, Processes and People that we have already examined. Of the other two, one faces outward and the other inward, into the HR organisation of the group.

The outward face of the Group CHRO obviously has a public component, visible in public forums and responsible for building the people persona brand of the group. Industry and professional bodies, government and other corporates (including prospective partners) judge the group and its people practices from these interactions. The less public part of the Group CHRO’s outward interaction is the judgement s/he must exercise on prospective merger, acquisition or partnering deals that are outside the scope of existing businesses. Many disasters could have been prevented by perceptive and plain-speaking HR dissent after the due diligence process.

In large measure, the Group CHRO builds HR quality through the CHROs positioned with individual companies. While I am generally a votary of internal grooming of CHRO talent, this obviously cannot be at the cost of effectiveness. A previous column has given pointers on the CHRO selection process⁴. Selection, of course, is only the first step. Company CHRO evaluation and development (in consultation with the concerned CEO) is no less important. Least pleasantly, when a unit CEO demands its CHRO cross professional Lakshman rekhas, it is the Group CHRO’s protective presence that can check non-professional conduct long before it enters whistleblower territory and finds its way to the Board or further⁵. Even more lasting than interventions in choosing, grooming or supporting individual CHROs, is what the Group CHRO does with them as a team. This is not easy if strong CHROs have been picked for each company and, as is usual in MICs, they have tenuous functional reporting ties to Group HR. However, their enthusiastic support is essential if the processes and deployments we have been reviewing are to fly. This column had drawn attention to "… Doris Kearns Goodwin’s analysis of Lincoln’s remarkable feat in forming a highly effective team from people who had been his bitter rivals till his electoral victory..."⁶ The Group CHRO for a MIC may not have such an extreme challenge but s/he has to command persuasive and diplomatic skills of a far higher order than is essential in a SIC situation. The professional standing of the Group CHRO can make a huge difference in gaining support without having to crack the authority whip. Also, if s/he has already won accolades in earlier roles, the need to front every HR achievement is reduced and Company CHROs can be pushed centre-stage at plaudit time. Not for nothing have the best Group CHROs, who pull such a masterly feat of leading without appearing to do so, been compared to bees: "The bee's life is like a magic well: the more you draw from it, the more it fills with water"⁷.

Speaking of bees, as Mary Kay Ash pointed out: "Aerodynamically, the bumble bee shouldn't be able to fly, but the bumble bee doesn't know it so it goes on flying anyway." Like the bee, the conglomerate keeps soaring, particularly in the Indian context ⁸. Would it be over-bold to suggest that part of the premium conglomerate's command comes from a well-conceived and wisely-staffed Group HR function?

Notes:

1. Visty Banaji, Fairness is Fundamental, Angry Birds, Angrier Bees – Reflections on the Feats, Failures and Future of HR, Pages 479-487, AuthorsUpfront, 2023.
2. Visty Banaji, Is Your Board Bored By HR?, Angry Birds, Angrier Bees – Reflections on the Feats, Failures and Future of HR, Pages 338-343, AuthorsUpfront, 2023.
3.  Visty Banaji, Fast Track to Organizational Transformation, Angry Birds, Angrier Bees – Reflections on the Feats, Failures and Future of HR, Pages 38-44, AuthorsUpfront, 2023.
4. Visty Banaji, "Help! The CHRO I Picked is a Lemon", Angry Birds, Angrier Bees – Reflections on the Feats, Failures and Future of HR, Pages 111-118, AuthorsUpfront, 2023.
5. Visty Banaji, The Dogs of (Office) War, Angry Birds, Angrier Bees – Reflections on the Feats, Failures and Future of HR, Pages 371-377, AuthorsUpfront, 2023.
6.  Doris Kearns Goodwin, Team of Rivals: The Political Genius of Abraham Lincoln, Simon & Schuster, 2006.
7.  Karl Von Frisch, Bees: Their Vision, Chemical Senses and Language, Comstock Publishing Associates; Revised edition, 1972.
8. Aveek Datta, The future of conglomerates….is conglomerates, Forbes, 3 September 2018.