Chief human resources officers (CHROs) hear the voices loud and clear: They must evolve to become strategic business forces within their enterprise. But when you pack up the slide decks and put away the research reports, what does that really mean?
The answer is deceptively simple: CHROs must help their company increase sales and create new sources of revenue—now and forever.
CHROs should help all employees generate more value. This topic dominated the onstage and backroom discussions at Oracle HCM World this past February. In his keynote, Oracle CEO Larry Ellison asserted that the modern HR department’s efforts to find the right people, retain them, and help them grow professionally is essential for business success.
“Engineers are very important in terms of building the products. But who finds the engineers,” Ellison asked. “Customer service people are very important. Who trains the customer service people? In a modern company, HR takes on this expanded responsibility for team building and enabling teamwork. I can’t think of anything from a CEO’s perspective that’s more important than that.”
So how does the CHRO translate the demands of senior management into an actual revenue-driving plan? It requires creative thinking and a fundamental change in HR activities. Here are five steps that can get the money ball rolling.
1. Compete to Win: Business competition is tougher than ever, and a gap is growing between market leaders—Amazon and Facebook, for example—and their closest competitors. The same force is at work in the talent market: top talent delivers a bigger payoff than less-skilled peers.
To help senior management defend or improve market position, today’s top CHROs embrace (and encourage) the competitive instinct needed to deliver bottom-line value. They direct their organizations to uncover market advantages in the mountain of data their departments routinely gather.
For example, the CHRO’s team can analyze enterprise information to identify the people and processes creating essential value for the company. Armed with that information, the HR leadership team can set a short-term strategy to secure or develop the talent needed to maintain or expand these activities. That way HR can anticipate where the next labor shortage may be and act pre-emptively to avoid business disruption.
2. Capitalize on Collaboration: For collaboration to deliver value, it must integrate with business processes and encourage tangible results across a dispersed, diverse workforce. Most essential work today is not attributable to a single staff member; it takes a team to achieve success.
HCM strategies should be built to do two things: First, they should encourage collaboration as a business value. Teams with talent from multiple disciplines are essential to ensure that when new business opportunities or challenges arise, they’re fully addressed by line-of-business people, the IT department, sales, customer service, and any other relevant group. The right HCM strategy can put all these resources in place so they’re ready to act on new revenue chances.
Second, strategies should capitalize on collaboration to improve HR operations. Wikis, social media, and other collaboration tools help HR staff members understand the needs of employees and also give them self-service tools that reduce routine inquiries that can drain HR resources.
3. Welcome Back Exceptional Talent: Innovative organizations attract a steady flow of talent into the fold. But some top performers will leave to chase new opportunities. Some alumni will leave your talent pool forever, but some former employees may seek a return engagement.
CHROs with an eye for increasing revenue will direct their staff to welcome back former employees—particularly to fill open positions in sales and engineering. The insight, training, and relationships former employees have gained during their time away may help management capitalize on new opportunities and avoid nasty missteps. Plus, you know they were good enough to hire once and you have the benefit of knowing some of their strengths and weaknesses when they come back through your door.
4. Embrace Social: Smart CHROs know that the social media phenomenon is not a trend that organizations other than their own have to contend with—it’s an essential business reality that permeates the whole business.
According to CEB Research presented at Oracle HCM World, the modern enterprise is increasingly dependent on collaboration within and amongst groups and geographies to deliver value. Based on CEB’s High Performance Survey (n=23,339), 60% of respondents reported 10 or more people involved in day-to-day work, and half of these reported 20 or more. Additionally, 57% percent of respondents reported collaborating with people outside of their department or function, and 63% reported collaborating across different locations. Roughly two-thirds of respondents also reported collaborating with different job levels and teams.
These developments support a role for HR in architecting the future of how work gets done. But CHROs can take a lesson from their peers who have been on the front line of social media adoption. For example, executives in marketing and customer experience use social media for sentiment analysis, directing customer feedback into the departments that need it most. Top CHROs apply the same processes to the workforce, sampling workforce sentiment via internal and external social networks, to understand what helps employees succeed—and what holds them back.
5. Don’t Neglect Core Processes: Becoming more strategic and revenue-oriented doesn’t mean that traditional HR processes are no longer important. Keep this vital area running smoothly by assigning an expert with a zero-defect, Six Sigma mindset to apply continuous improvement principles to HR processes. This ensures that HR will remain efficient and cost-effective. Then hire transformative reinvention specialists to help you constantly look for new ways to challenge business assumptions—and generate new revenue for the company.
Playing an active role in generating more value for the enterprise isn’t something forward-looking CHROs can avoid. The choice is clear: today’s CHROs must decide between remaining in a back office that runs traditional HR services or becoming a key player in modernizing people-powered processes.