"Throwing Money Off the Balcony"
Years ago my CEO complimented me on
something, but then immediately criticized the profession I represented
and suggested that based on his experience, what he disliked most about HR
people is that they tried to solve all their problems by “throwing money
off the balcony.”
He meant that as a CEO, he saw problems
every day. At the same time, he knew he had limited resources to meet and
solve those problems as well as plan for the growth and success of the
organization. In his opinion, too many HR people -- when confronted
with the problems of the organization -- immediately responded with a
“Oh yes, that is a big problem.”
“Boy, the employees aren’t going to like this one bit!”
“I think I can fix it, just give me more entitlements, higher pay,
Engineering, manufacturing, research
managers, marketers, and anyone else with a budget have long known that
resources are limited. HR is no exception. It is easy to have a high
performing human resource management department when the HR person gets
more than their share of resources. The real genius is creating such a
reputation with limited resources.
Not too many
years ago, many corporate employee relation’s reputations were
influenced more by the generosity of their policies and programs than
their design, cost effectiveness, and ability to advance the interests of
the organization. Today’s global competitive pressures ensure that those
days are gone forever.
Now corporate human resource management
reputations are built on HR competency and the capacity to be a credible
business partner. An HR professional’s role is to be a member of
management and not some neutral party stuck somewhere between the
interests of employees and management. HR is and always will be
Greater competency also contributes to
erasing the incorrect assumption that “anyone can do HR work.”
Requirements to join the human resource profession are steadily and
We’ve known for a long time that you
could not “sell from an empty wagon.” CEOs are quickly learning that
the person who is expected to bring human resource professionalism to the
organization cannot do so “with an empty head.” CEOs are
starting to wonder how knowledgeable and competent their Chief Human
Resource Officer is compared the CHROs of their competitors. Those
HR professionals who do not have the knowledge and skills to do the job
are at great risk, but that is the way it should be in any demanding
The HR professional striving to become a
strategic business partner more clearly recognizes today that his or her
customer is the CEO. And, as in any customer relationship, you soon
discover what the customer wants.
And what do CEOs want? More revenue.
I have never heard a CEO suggest that “…the organization’s revenue
was $100,000,000 last year but we had to work too hard. We’ll just
make it $90,000,000 this year.” Nor have I ever heard a CEO suggest that
“…the profits were $5,000,000 this year and that will be just fine for
next year.” Similarly, no CEO says that the shareholders have already
received their share, so increasing shareholder value need not be a top
priority this year.
They just don’t make CEOs that way.
CEOs are interested in revenue growth, profit growth and increased
shareholder value. It is the CHRO’s job to demonstrate to the CEO
why effective human resource management will contribute --- probably more
than anything else in this day and age --- to the CEO’s objectives.
Most organizations today are trying to
capture the opportunities inherent with an expanding global marketplace.
They may find an inability to either attract or retain key talent. Severe
skill gaps, changing demographics, a more diverse workforce, and soon the
lowest net additions to the workforce in more than 100 years are the
challenges facing not only the people in HR, but the organization itself.
It has been a pleasure providing the
forward to the Arthur Anderson Annual Human Resource Management Yearbook for the past several years.
After 10 years with the Society and as I
prepare to retire, I am extremely pleased to have contributed to the
growth of not only the profession but also the Society for Human Resource
Management itself. For instance, in just 10 years SHRM’s
membership has increased from 44,000 to more than 140,000; revenue
increased from $13,000,000 to $64,000,000; net worth from $4,000,000 to
$50,000,000, making it one of the fastest growing, largest and most
successful professional society’s of its kind. It is my strong belief
that SHRM’s growth reflects the growth of the HR profession.
How did we do it? By being competent and
professional in everything we do. We stretched limited resources to their
maximum through effective administration and leadership---not by
“throwing money off the balcony.”
Michael R. Losey, SPHR, CAE
President & CEO
Society for Human Resource Management
From: HR Director: The Arthur Andersen Guide to Human Capital, 2000 edition
Copyright © 2011
Michael R. Losey. All Rights Reserved.
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