Providing operational leadership: The emerging role of the HR COO
HR business partners continue to be challenged by both the business and the HR function itself to play a more strategic role.
While the business demands increasingly focused levels of support, the HR department is left balancing such requirements with its own priorities in terms of making cost savings and providing services consistently. Most HR business partners have to deal with significant amounts of day-to-day operational issues, which means that it can be difficult to find the space to move up the value chain and take part in more strategic conversations. As a result, a lot of people end up feeling as if they are on a treadmill that is becoming harder and harder to stay on and start looking for direction and support. But employers are progressively realising that, in order to solve this problem and create the operational stability required to move HR beyond a service function to one that provides strategic value, there needs to be a strong focus on integration and collaboration at an operational level. The skills and experience required to enable this shift are different from those found among most HR directors, however. As a result, we have started to see a growing number of HR chief operating officer roles within larger corporates that have complex divisional and international structures. It is also worth noting that companies that have created this operational leadership role tend to have significantly stronger HR representation at board level than elsewhere and view HR as a strategic business function. Maintaining balance In less complex organisations, however, the role may also exist but in a more tactical form and go under the name of HR operations director. But while the title may differ, the impact of establishing a solid base from which to build the long-term credibility of HR is no less important. Individuals who are successful in these HR COO roles tend to have experience of leading and managing large-scale HR programmes as well as in-depth knowledge of HR IT and operational process solutions. The demand for such skills becomes more pronounced in organisations where chief executives are keen to see more collaboration between support functions and generate cost savings by creating shared service capabilities, however. But why is the HR COO’s contribution so significant anyway? The current climate of austerity has placed greater pressure on the HR function to maintain an appropriate balance between cost savings and cost-effectiveness. Achieving this balance requires more than stringent decision-making during the annual budgeting cycle, however. It requires constant fine-tuning and leadership throughout the year in order to manage both the myriad trade-offs required between specific HR functional areas and the HR needs of the business units themselves. Moreover, while it is relatively easy to strive for operational excellence, it is often an expensive proposition and can leave the group HR director with some awkward questions to answer. Equally, simply going after cost savings tends to create a ‘one-size-fits-all’ service that may suit some business units but leave others feeling underwhelmed. Fit for purpose By creating an HR COO role, however, it is about putting the leadership and operational expertise in place to manage such trade-offs internally, enabling HR business partners to communicate with a more consistent and confident voice. The ability of the HR COO to work effectively with HR business partners and truly understand what ‘operational excellence’ means for each business unit will ensure that delivering on business requirements is built into the heart of the HR function. In this context, it is worth bearing in mind that business units are generally simply looking for ‘fit for purpose’ and ‘consistent HR service delivery’ rather than world-class facilities. In practical terms, this means that if, for instance, their requirement was to ‘pay people fairly’, they can end up feeling overwhelmed and disappointed when it becomes clear that such a requirement has grown into a new renumeration system that no one asked for. Although a subtle shift in thinking, moving to a ‘fit for purpose’ approach creates both a challenge and an opportunity for HR. Creating individual centres of excellence also tends to promote the creation of an active change programme, with a focus on on-going improvement. However, without a close co-ordination of and collaboration between HR business partners and the business units, it can feel as if multiple change programmes are being pushed through by HR to the detriment of operational matters. The problem is that such a situation merely reinforces the view that HR is neither efficient nor effective in supporting the organisation’s requirements. Boosting credibility Therefore, the opportunity and challenge for HR COOs is to manage the overall change programme, identifying trade-offs and synergies while also ensuring that day-to-day operational stability is not compromised. As such, the role provides a platform to demonstrate that HR is listening and responding to the business’ true service needs rather than those it thinks are necessary. Because of the level of strategic operational focus that the HR COO provides, HR business partners should gain a greater understanding of the trade-offs being negotiated, which means that they should, in turn, be more supportive of HR colleagues who are responsible for service delivery or who work in centres of excellence. The latter should likewise gain a greater understanding of what is required of HR in order to truly enable the business units to deliver on their strategic objectives - and why. Such a scenario creates a solid platform from which to manage expectations within the business as to what HR can and cannot realistically provide, which should create a more honest and trusting relationship between the two. Finally, the group HR director’s time should be freed up enough to focus his/her attention on the strategic contribution that HR is able to make towards achieving organisational goals, without being diverted into tackling operational issues. What this all means in practice, therefore, is that the HR COO role is becoming increasingly critical in helping HR departments make a strategic contribution to the business and grow their own credibility as a result.
Hilary McGuire is a director at leadership consultancy, Tyler Mangan.