Last week I spoke to a large group of HR professionals and I asked them two very important questions. WARNING: Getting the answers correct may require you to radically shift your perspective and focus. However, making the shift may be the most important thing you can do as an HR professional to dramatically elevate your value to your organization.
Hopefully I've piqued your interest. So here goes.
Question number 1. Look at the pictures below and tell me who the most important group is to your business. This isn't a trick question. There is only one correct answer.
When I asked this question in a speech I made last week to over 120 HR professionals, the most common answer was "the employees." As one participant confidently articulated, without employees and their contributions and innovations there would be no business. Good point.
One person sheepishly said "the customers," but I could tell she didn't feel comfortable saying that in front of her HR peers.
No one said "the investors." Some experts argue that without investors you couldn't have a business because there would be no capital to buy the equipment and infrastructure needed to deliver the product or service.
So what's the right answer? The answer came most succinctly from the late Peter Drucker who many called the Godfather of Modern Management: “The purpose of business is to create and keep a customer.” All three groups are important, but without a customer there is no business. You can have investors in search of a business, and you can have employees in search of an employer, but as the customer goes so does the business. A business will only continue to exist as long as it has products and / or services that satisfy customer needs.
Question number 2: Who is HR's most important customer? I asked the same group of HR professionals this question and overwhelmingly and emphatically they said "employees!" Wrong again . Now obviously HR spends a lot of it's time serving employees, and yes the employee group is clearly a customer of HR, as are managers, other departments, executives, retirees, covered family members, etc. However, HR's most important customer is the company itself. In today's business environment, HR exists, along with other support functions like IT, to help the company create value for it's customers. Let that statement sink in for a minute. When I ask many HR professionals what HR's primary role is, I hear some version of "HR's job is to sit in between employees and management..." "To sit in between" suggests that HR isn't part of either group. Others tell me it's HR's job to "look out for" the employees. Other's say to "hire and fire." These views represent traditional notions of HR, or really "Personnel" or "Labor Relations."
Companies of all sizes need much more from HR today. Viewing HR"s primary role to support the company (and it's customers) results in a much different view of what the HR function should be doing. I'll illustrate this point with a few examples I borrowed from recent CAI conference speaker and noted HR guru David Ulrich. Dr. Ulrich calls this new customer focused view of HR "Outside-In" HR.
Companies exist to satisfy a customer need. In doing so they provide jobs and shareholder returns. A firm's talent is at the heart of satisfying that customer need and HR should be driving what kind of talent is attracted to and remains at the company.
Where does an HR leader start? The most important, and difficult step, is to shift your perspective and your team's perspective to a company - customer focused view. Next, go visit some of your company's customers. That's right, ask sales to attend a few customer meetings. These experiences will open your eyes to how your company provides value to customers and what attributes attracts them to your company. The neat thing is that customers and top talent are attracted to similar things. And when both groups are happy, amazing things can happen! Think about it!
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