HR’s New Role: Supporting Organizational Growth

By Steve Bates Jun 23, 2008
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CHICAGO—HR professionals have always been good advocates for their employees and, even though most are not experts at compliance, they have recognized the importance of being in sync with a vast array of local, state and federal laws and regulations.

Now, though, they must do much more. They must delve deep into their organizations’ existing and planned strategies for growth—and execute those strategies, says an academic expert in the field.

“We already have a seat at the table. But do we have the right people in the right place at the right time” to put company strategy into action? That question is at the heart of an executive education program held here at the end of June 2008 in conjunction with the SHRM 60th Annual Conference & Exposition.

The question, one of many similarly themed questions, was posed by Christopher J. Collins, an associate professor of human resource management and director of executive education at Cornell University’s School of Industrial and Labor Relations. He was to be followed by fellow Cornell professor Patrick M. Wright in the three-day program, titled “Strategic Leadership: The Next Paradigm for HR.”

Collins noted that in earlier work as a consultant, he was brought in by a large U.S. manufacturing company to help lay off 15,000 employees. He says that he didn’t understand the company’s strategy, and more importantly, he didn’t really understand what its people knew and did best.

The layoffs were made, but just a few months later the company had to hire back about 3,000 of the people who had been let go, as consultants, with some earning twice what they had been paid as regular employees.

“That was an exercise in futility,” he recalled. The lesson: “how HR can delete value from a company.”

Adding value, of course, is why dozens of HR professionals packed a hotel ballroom to determine how best to develop, and use, the core competencies of their organizations. Collins defines a competency as “the accumulation of resources that enable an organization to repeatedly and consistently deliver value in a particular way to customers.”

“It’s not luck,” he reminded attendees; it’s building and using critical skills. “How do we take these things we do really well and leverage them?”

He cited the example of Wal-Mart, which embraces a “collection of competencies” centered on keeping costs low. HR helps the Wal-Mart staff build relationships with suppliers that lead to providing a high volume of goods to stores when needed. “All these [competencies] come together time after time” because HR has helped develop people who can ensure reliability, said Collins.

But competencies needed for success change, he noted. About 15 years ago, Home Depot hired professionals with hands-on experience as painters and plumbers to provide premium service to customers. But as the chain grew rapidly, it could no longer afford paying for that expertise and maintaining shareholder value.

“The HR team and the CEO said, ‘We just can’t do what we were doing under the old model,’ ” said Collins. They changed their strategy, focusing on competencies involving logistics and purchasing.

“A lot of companies have been able to leverage [core competencies] for great growth,” said Collins. Defining and building employee competencies that fit the specific needs of different organizations is a major avenue for HR professionals to help build their organizations—and help build the role of HR, he said.

Steve Bates is manager of online editorial content for SHRM.

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