The Failed Promise of Transformation

The most common HR response to elevate their influence in the organization has been to initiate a two-pronged, technology-based program that attempts to remove HR from the bottom of the pyramid while building out the infrastructure that allows them to deliver those services at the top.

Step one: Implement systems to enable “self service” employee and manager transactions to disseminate or outsource the transactional-processing load.

Step two: Implement systems and processes that collect performance and productivity data which, when combined with financial metrics, can be leveraged both in analysis, reporting, and advisory deliverables that mirror their financial counterparts and help to develop and execute strategic decisions.

The current terminology describing HR’s new focus is “Human Capital Management,” which is perceived as being comparable to financial capital management. This is all well and good, and an appropriate reaction to the well deserved “Personnel” moniker. But as most fads go, outside of self-congratulatory articles, self-promotion, and a few “best practice” exceptions, these initiatives have for the most part failed to achieve their main objective—due in large part to HR’s failure to use its own very powerful data in the most effective way. The data alone is not enough; to achieve the status of strategic business advisor HR must consistently demonstrate that its decisions are empirically based, and it must continue to demonstrate a persuasive return-on-investment (ROI) business case.

Quite simply, it is because HR’s agenda is based on a fundamentally flawed view of the value that the HR function can and should provide, and on a similarly flawed understanding of how technology-enabled workforce processes can be implemented and managed. The HR function is approaching a crossroads—in most cases HR people are not significantly involved in the business despite their efforts to interlope, and they are unable to derive believable ROI from, or even effectively manage, the enormous complexity of systems and processes that have been implemented.