Vol. 48, No. 3
Experts say rotation programs are the best way to gain a broad view of the business, yet HR often leaves itself out of the loop.
Demand a seat at the table. Become a strategic business partner. Be proactive. It’s all good advice. But like a mother’s reminders to take your vitamins or wear galoshes, these mantras seem to have turned off—rather than motivated—many HR professionals. It’s easy to see why: It’s one thing to talk about becoming a business partner; doing it is a whole other matter.
Experts say the surest way for HR professionals to become strategic business partners is to learn more about the business they serve. And actually “doing the business” is often the best way to learn it.
A prime way to “do the business” is to participate in a program that offers rotating assignments through non-HR functions. Simply put, there is no substitute for experiential learning.
Ironically, that’s a mantra HR professionals seem to have bought into only for co-workers in other disciplines. For decades, HR development executives have coordinated rotation programs that have allowed their counterparts in finance, marketing and operations to gain broad business experience and move up the corporate ladder.
But, unlike their colleagues, the vast majority of HR executives who function as business partners have not participated in rotation programs themselves.
“HR should be investing in rotation programs, but they’re not,” says Ed Lawler, director of the Center for Effective Organizations at the Marshall School of Business at the University of Southern California in Los Angeles. From 1995 to 2001, Lawler monitored HR functions in 150 companies, mostly within the Fortune 1,000, to see what tools they were using to help them become strategic partners. Rotation programs were the least-used developmental tool. (See the chart “HR out of Rotation.”)
Big mistake, says Lawler. “The dearth of rotations outside of HR will continue to isolate [the profession]. It means members of HR are likely to remain a separate group and not be involved in—or deeply knowledgeable about—the business.”
HR’s absence from rotation programs may be even more pronounced than Lawler’s research suggests. His study focused on large companies, and experts agree that mid-size and smaller companies are even less likely to invest in rotations of any sort.
Harvey Resnick, regional director of The Hay Group in Greenwich, Conn., finds lack of HR participation in rotations to be perplexing, given HR’s overall role in executive development.
“It’s akin to the shoemaker’s children going barefoot,” he observes. “How can you expect to become a business partner without actual experience in the business? You can’t just put the book under the pillow and know what’s in it.”
John Sullivan, professor of management at San Francisco State University, points out that there is general agreement that rotation programs—regardless of their form—pay dividends. “When we asked hundreds of managers what experience they had that most changed them, it wasn’t in a classroom; it was hands-on, working alongside a great mentor at 2 a.m. and talking about the business. It could be a job rotation, a project rotation or a one-day-a-week rotation.”
Although such skill-stretching assignments aren’t the norm in the HR field, they haven’t completely fallen by the wayside. Some employers have made a point of offering a formal rotation program or at least an informal opportunity to test the waters outside HR. And participants provide anecdotal evidence that such programs work.
Formal rotation programs offer customized assignments to promising employees in an effort to give them a rounded view of the entire business. Assignments usually run for a year or more. Rotation programs vary in size and perspective. While larger companies are more likely to invest in these programs, businesses of all sizes might want to consider such programs when they see the advantages they can provide.
Here are a few programs generating positive results:
St. John Hospital and Medical Center. Some might say that Debbie Condino has already made it to the top. Condino, however, isn’t resting on her laurels.
A 20-year HR veteran, she is the director of HR at St. John Hospital and Medical Center in Detroit, and reports jointly to the president of the 5,500-employee hospital and the vice president of HR for the health system. Recently, the president added her to his executive team—and liked what he saw.
Since then, she has become one of 10 high-potential executives—and the only HR executive—chosen to participate in the system’s pilot “Management Mentoring Program.”
Condino’s customized development plan includes rotations into cross-functional stretch assignments. In addition to HR, which has a staff of 50, she’s currently running occupational health, the volunteer department and auxiliary enterprises, which includes responsibility for the hospital gift shop.
Condino’s mentor is Kathy Ryan, vice president of operations/acute services at Providence Hospital in Southfield, Mich. “I believe in rotation,” Ryan says. “Debbie is able to come to me in my mentoring role and present her failures and say what’s she’s struggling with, and I’m able to help her. You can’t learn just from observing others, you have to be immersed in different assignments and learn from your failures.”
Condino meets with Ryan monthly, attends her operations staff meetings and tackles assigned “homework,” such as meeting one-on-one with Ryan’s finance officer. “I’m a people person, but I need to understand the financial side of health care to do my job better,” Condino says.
And she’s gaining appreciation of the big picture. “I’m thinking more globally, learning how my part fits into the whole strategic plan,” she says. She hopes to move up the HR ladder but finds the challenges of line management intriguing too.
“My heart is in HR, but who knows what may open up?” she says. “Right now, I’m finding managing a gift shop that generates $1 million in annual revenues an interesting challenge.”
General Electric. At GE, which offers a rotation program for HR entry-level staffers, about 150 participants do three eight-month rotations. The goal is to hire talented people who can become senior HR leaders in the company. Candidates, average age 26, usually have some prior work experience and a graduate degree—either an MBA or a master’s in labor and industrial relations.
The program enjoys a living legacy of senior executives like Susan Peters, who passed through in 1979. Peters currently serves as vice president for executive development, where she oversees the growth of GE’s top 600 executives.
The program offers tremendous opportunities to participants, says Peters. “The big attraction is the variety they get in the first few years,” she says. “They see different businesses and different functions. You might start in labor relations, and then go to compensation, then to staffing, then benefits.”
About a decade ago, GE added a cross-functional rotation to the mix, and it has become a key component of the program’s success. “You have to go on the audit staff or become a marketing person for one rotation,” Peters says. “We’ve learned that the HR function has to have good connectivity with the business operations and it improves the credibility of the individual later on.”
Originally, some participants were unhappy with the program. “It takes people out of their comfort zone, which is good,” Peters says. Now, she says the problem is not grousing but losing talent to the line after the rotation.
Employers that lack the time or resources to implement formal rotation programs can opt instead for informal partnerships with other functions. Such programs require less of an investment in time and other resources and still may pay dividends in terms of helping HR professionals acquire the tools to become a viable business partner.
St. John Health. St. John Health is a Michigan health system that covers nine hospitals, including Condino’s St. John Hospital and Medical Center. The rotation program for the St. John Health headquarters office, in Warren, Mich., was born when two organizational effectiveness (OE) staffers asked to partner with line managers in an effort to better understand how hospitals work.
Mary Nabor, corporate director for organizational effectiveness, saw the OE staffers’ interest as an opportunity to get HR more involved. She put together a pilot program exclusively for HR, setting up mentoring relationships between the OE staffers and line managers. The pairings enable the participants to develop new relationships and gain knowledge of operations.
“I wanted to learn more about how the tools we develop in workplace analysis were being applied and used,” says Todd Sperl, one of the OE staffers. “And I wanted to gain a feel for the day-to-day operations, what our managers go through and how they make decisions.”
To that end, Sperl is shadowing Maryann Barnes, the administration director for surgery at St. John Hospital. While maintaining his regular workload, Sperl plans to spend about a day a month observing and consulting with Barnes. Recently, he attended his first operations meeting and afterwards spent an hour debriefing with Barnes.
“We’re very financially focused,” Barnes says. “Todd’s going to see the whole clinical piece and how it ties in with the financial side.”
Julie Bell, the other OE staffer, also is eager to view health care from the trenches. “I want to learn more about the business side,” she says. “Unless I have operations knowledge—especially about nurses, I won’t be able to ask the right process questions that relate to productivity and morale.”
Bell’s mentor, Stephanie Brady, director of behavioral medicine and pastoral care at Providence Hospital in Southfield, Mich., says she welcomes the chance to build communication between HR and operations. “The problem with HR is they don’t know anything but HR. There’s a silo-thinking effect where you get training but don’t see the day-to-day operations to know what it’s really like.”
Although the program is still in its infancy, Sperl already sees it spurring his professional growth, and he suggests that other HR professionals ask senior management for cross-functional rotational opportunities. “If your office isn’t forward thinking, go out and produce a relationship with a line manager on the side,” he says.
County of San Diego. When Carlos Arauz became the HR director for the County of San Diego and its 18,000 employees, he instilled a service team approach, creating five interdisciplinary HR teams that were linked to the county’s five operational units (including public safety, land use and environment, and community services.)
“Previously we had two separate divisions and they were not providing good customer service to the operating groups,” Arauz says. “We were not functioning as effective business partners.”
Now, specialists in compensation and benefits sit together with their counterparts in recruitment and selection in five-person customer service teams. As a result, each specialist now has a working knowledge of the specialties of other team members—and also has an appreciation of the business issues facing the operating unit the team supports.
Teams meet monthly with HR generalists who work directly for the operational units and report jointly to Arauz and their unit chief. They serve as conduits, translating the HR needs of their unit to the HR team. Teams focus exclusively on HR issues but also are briefed by line managers on an ad hoc basis.
Teams also receive two to four hours of classroom instruction each week on various HR disciplines and functions.
Arauz says instead of viewing themselves solely as specialists, staff members are energized, thriving on their cross-training and their expanded role. “Our staff [members] are really enjoying themselves. Three or four who never did classification studies say, ‘this is really fun. Now we see how this recruitment and selection links with compensation.’ ”
Anne Calle, senior HR analyst, is team leader for the 7,943-employee public safety group, which includes offices of the sheriff, district attorney, public defender and medical examiner. Her team contains three recruitment analysts and two in classification and compensation.
“When we were in two divisions, we were working in isolation,” she says. “Now, the sheriff is creating a new class series; we’re designing it and once it’s complete we’ll do all the recruitment. It’s so much more satisfying to be involved in the process from start to finish.”
Arauz says the blending of disciplines is similar to rotating everyone simultaneously and is proving superior to individual rotations, enabling him to provide more and better services faster. He also says he’s receiving positive feedback from the operational units—a rare occurrence for HR professionals, who usually are called only when there’s a problem.
What’s the Best Course?
Are formal rotational programs really worth the effort, or are informal programs just as good?
Bill Frank, chairman of CareerLab, a career strategy and human capital services firm in Denver, believes it’s not necessary to rotate HR into line jobs to learn about the business. “A good sit-down with the key people can go a long way toward orienting the HR person to what he needs to do,” he says.
The expense of formal programs, he believes, is not worth the cost—especially in the current business environment. “Organizations are running on fumes; they don’t have large budgets that will allow them to put HR into accounting or sales. Instead, they need someone with business experience under their belt who can hit the ground running.”
Kathe Burke, vice president of HR at Gambro BCT, a blood component technology company in Lakewood, Colo., agrees that informal experiences are enough to round out an HR professional’s business knowledge.
“My HR manager is high potential,” says Burke, “and I hired her intending that she will be fully equipped and capable to take on my job as vice president. To be a full-fledged business partner, she doesn’t need to work exclusively in marketing or manufacturing because she works with them every day in her HR role.”
Others disagree. George Bogdewiecz, vice president of HR at Great West Life and Annuity Insurance Co. in Greenwood Village, Colo., argues that rotating HR professionals into other functions is worth the effort. In fact, he says there’s no substitute for actually working in a business if you want to understand it. In his previous job as HR head for a transportation services company, Bogdewiecz says most HR professionals served stints in operations from a few months to two years.
Most experts agree with Bogdewiecz, holding that an HR executive who has actually walked in business shoes has the most credibility as a business partner. Sitting as an HR person on a cross-functional team does offer value, but not to the same degree as a formal rotation program.
On a cross-functional team “you’re exposed to different pieces of knowledge, but whether you acquire it is something else,” says Christopher Collins, assistant professor at the Department of Human Resource Studies, School of Industrial and Labor Relations at Cornell University. “People within the group tend to rely on others to handle their specialties. The GE rotation system is best, because it puts you on the other side and you learn from that side how HR is supporting what you do.”
Robert J. Grossman, a contributing editor of HR Magazine, is a lawyer and a professor of management studies at Marist College in Poughkeepsie, N.Y.