I am convinced that “people” is a better word to use. The term HR comes from a period that the function formerly known as personnel management (FFKAPM) was looking for street credibility. In contrast to capital resources, human resources were the focus of a function that wanted to escape the hell of employee administration. The personnel people wanted to conquer a place at the board table. HR was to be more strategic, more linked to the business and more focused on processes that create added value for the company. There’s absolutely nothing wrong with that.
For many people working in this line of business, the quest for recognition and impact still goes on. Indeed, in many organisations the FFKAPM is still struggling with the question on how to position itself. But to me that question is irrelevant for various reasons. The most important reason is that the FFKAPM is not a function. It’s a process, distributed across the entire organization. It’s executed by distributed leaders. HR people who think they are actually doing HR should rethink.
People versus Human Resources
The term People covers the essence of the debate better. Here is why:
- HR could suggest that there is a certain sense of ownership. However, attracting and retaining people is an intensive process without any guarantee on return. The discretionary power lies with the so-called resources, not with the investor. Investing in capital resources is relative predictable. The investment in people is a very uncertain one. You might send people to a training, after which they might leave. So you need to accept a high degree of uncertainty or risk. You can limit this risk through a proactive people strategy.
- The term HR may refer to the existence of active components like productivity and competencies. But you cannot separate the useful human traits from the ones that are less useful. A person is indivisible. People come with the diversity that is so characteristic to people. Organisations have to take everything that comes along with that person, the aspirations the talent, the worries, the weaknesses, … The answer to this issue is probably selection. However, we tend to overdefine hiring profiles and miss out on a lot of potential. Companies that look beyond narrow people profiles have access to much more diversity and people potential.
- The term HR may hint at depletion. A person is only a resource as far as the person has the necessary competencies, engagement, health, availability. The sustainability of employability is not the responsibility of the user of the resources but of the carrier. In an age where people are increasingly suffering from stress and burnout we can no longer use the word HR to refer to people. People who experience ups and downs in the course of their lives are less employable and therefore disposable? Sustainable employability is a joint responsibility of people and organisations. As we know that a high proportion of the population will suffer an impairing disease, we must make sure that we take the necessary measures to avoid, limit or solve the risks and their consequences. This has both a moral and an economic part. And even when organisations and individuals work on this, chances are still high that impairment will occur at a given moment.
- The term HR might refer to the interchangeable nature of the resources. Indeed. Capital resources are usually interchangeable. People are not. Yes, not every person that leaves the company has critical and rare skills. Yes, through succession planning and training you can limit possible negative consequences of exits. But a person that exits are enters a team, changes that team. Therefore the interchangeability is limited.
- The term HR sounds very rational. But people are not only rational. (cfr. Blog on emotions). The irrational side of human behavior has been demonstrated on many occasions. Scientific management wanted to eradicate irrational behavior and focused on efficiency and effectiveness. But the logical approach to management has dehumanized work.
On the importance of People in Business
The importance of people in business is high. That’s at least a euphemism.
- Leadership (also a human behavior) creates a context, including the strategy, that defines business and personal success.
- Strategy execution depends on the commitment of people. We cannot limit strategy execution to top-down alignment. Execution depends on people doing what they said they would do. It requires people to adapt to changing circumstances, to take initiative, to think, …
- Customers experience the brand through the behaviour of people. If you go into a shop you can literally feel the brand. And if you don’t something is wrong.
- In many areas due to the demographic shift people practices will need to change, either by hiring atypical profiles or by keeping people in the work process at a higher age. Having people of different ages at the same time on the work floor might need a change of coöperation (to be honest, I do not buy into the generational debate. Age is a source of diversity like gender, ethnic origin, cultural heritage, ideas and opinions).
- Intangible organisational traits such as trust, culture, sense of meaning, … make or break any strategy. Like someone has put it: culture eats strategy for breakfast. We cannot see culture, but we can feel it. It’s around us. It’s like the water in the fish bowl.
- Many mergers fail because of culture. Culture is a result of the behaviour and interactions of people. The destruction of value due to the incompatibility of organizational cultures is phenomenal.
- Business success depends on coöperation, creativity, engagement. Business leaders should create environments that foster these human behaviours. For that they need to understand their dynamics.
- In times of speed it’s the people that will determine your company’s time to market, its agility.
Is this a soft approach? I do not think so. Companies need to create value. People create value. And the creation of value is needed to attract and keep the right people. Both go hand in hand. As Chief People Officer I focus on that value creation and the development of a strong people capability. More than any other capability, the capability to make people thrive and excel determines a company’s competitive advantage. And that’s not soft. It’s pure business logic. It’s like putting the “salary mass” into a source of progress and prosperity.
And that’s why I chose the title. It expresses the strategic intent of the FFKAPM better than CHRO.
This video illustrates it: