Measuring the Impact of +1 HR Leaders

Measuring the Impact of +1 HR Leaders

^{NJ Pesci: Former CHRO Scripps Networks Interactive}

I was sitting in a meeting with a Chief Human Resources officer for a fortune 50 company.

In that meeting, the CHRO was talking to us about his goals for the HR function. There were only three of us in the room with him at the time and it was supposed to be a brainstorming session of sorts. The CHRO said, “Our objective is to be the number one or greatest HR organization in the world.” Now, that's a lofty goal, an aspirational goal.

The objective to be the greatest HR organization in the world is an interesting thought, but I am not sure it makes sense as a goal. I thought this was a brainstorming session, so I proceeded to ask two questions. I'm pretty sure they were not the two questions he wanted anyone to ask him that day.

My first question to him was this, “How would you even know that? How would you even know that you were the greatest HR organization in the world?”

There is no HR measurement that anyone really knows of. Greatness is measured differently in other areas. For example, you know you are number one when you win the Super Bowl. You do know you are the greatest at the tournament if you win Wimbledon. And you do know when you have the greatest market share in your industry. We can see these achievements and they are universally accepted measures of success. But how would you know you were the greatest HR organization in the world? I don't think there's any standard of measure that anyone would know that would say, you are truly that, the greatest HR organization in the world.

If my first question didn't go over very well, then the second one landed like a lead balloon. My second question was, “Why would you even care?” What benefit would that be to the organization if we were known as the greatest HR organization in the world? Why would anyone even care about that?

If you could say that we, as HR, helped enable the transformation of our business from a $20 billion to a $50 billion business over 10 years, well, that would be a worthy thing to aspire to. That would be something the business itself would recognize and perhaps then say, “that's a world class HR organization, maybe the greatest in the world.” There really is no other way to measure the greatest HR organization in the world. If there is a way, I've never heard of it. And please don’t say it is one of several measures that might include employee engagement, time to hire, quality of hire, percentage of career discussions, performance reviews completed, or any other internally focused HR number. That’s just not it and not the way a +1 HR leader should think.

Well, that was the end of the meeting, at least for me anyway. I am not sure he heard anything else I said after that.

Contrast that CHRO’s desire and focus, with the desire and focus of a +1 HR Leader. A +1 HR Leader wants the business to improve and understands that HR’s impact needs to be focused on the business, not on the function. As a +1 HR Leader, do you want the HR function to be better? Certainly. Would you like it to be a stronger function with greater HR talent inside it? Absolutely. But the reason for all of that is to enable and support the business, not to be listed with your face on some magazine, claiming you are the greatest HR organization in the world. HR’s success should be measured by the success of the business first and foremost. HR exists because there is a business, otherwise it doesn’t exist at all.

I have a good friend who years ago worked for a family run company, a very large, well known family company. When he was the Chief HR Officer for that company his bonus was tied to business results, not HR to measures. He had to makes sure HR was running well, but he was not rewarded on completing HR tasks or activities. His scorecard was based on the same scorecard the CEO was measured against.

Some HR managers might be concerned with such an approach. They might say, “I don't feel comfortable having my bonus tied to something I can't control.” And therein lays the rub. If you say such a thing, you have admitted that your work does not impact the business. If that is the case and you feel that way, you probably need to reevaluate your priorities.

A +1 HR Leader can recognize the difference between a functional goal and a business goal and knows how to tie them together.

It may take time to see how you can add and unlock real value for the organization, but once you do you, you will never go back to the old success measure for HR.

Thank You

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