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Times are changing, not the products, not the machines, but our human capital is our unique selling point. So why then is the most important function in a company not occupied by a HR-professional?
In this blog I want to open a new discussion. The highest functions in companies are often occupied with professionals who often have their specialization in a certain occupation, these are often specialities in: sales, productivity, the product itself, and sometimes even finances. However, it is very rare that we see an HR professional on the highest seat of a company (read: never). Why is that? I would argue that HR has the most important role in a company in the 21st century and therefore it only seems natural that somebody with HR-affinity holds the highest office.
The highest office – a brief history
Historically the highest functions in previous societies were either ranked by ‘birth right’ or age. A prince was born to be a king and a farmer’s son was born to be a farmer. Additionally, the elder brother (because in those times we are not even talking about equality between genders) often held the highest regard in the family. When we transformed from a feudal society to a capitalist society our order of who holds the highest function and why, also changed.Birth right and age made place for private property and capital. In the beginning of our capital society it was the people who were most skilled in their profession (artisans, craftsmen and guildsmen) who held the highest offices in their organizations. With the industrial revolution in full force, these professionals had to make place for the people who knew most about machines and production.
After the second world war these mass-producing professionals had to make place for productivity professionals. Average output and efficiency became the drive of many companies to outperform the competition. Shortly thereafter the golden age of capitalism required professionals who knew how to handle flows of money. The highest occupation became related to financial specialization. Fast forwarding to current day, the highest office is often related to specialization in terms of sales, productivity, the product itself or finance. CEO positions are, more often than not, occupied by somebody who has a technical skill.
What is important?
Let’s do a recap, what have we had so far; we picked our leaders based upon: birth right, age, artisanry, skills related to production, productivity, finance, sales and the product itself. Are we missing something? Well, I believe we do. Now in the 21st century human capital seems to be the most important asset for most companies. The people who walk in our hallways, sell and produce our products, facilitate finance, logistics and purchasing, it’s the people who are the beating heart of an organisation. They are our unique selling points. That has not gone unnoticed. More and more companies are busy trying to retain and develop their talent, and more and more companies are started to provide the means of doing so. Especially in niche industries, any industry remotely dealing with software and industries which require specific skills (I think this captures our entire economy), employers know how important it is to retain and develop their talent.
From this I can only conclude one thing, the most important focus of our companies now should be the people working in them. This means that we need leaders and CEO’s who not only understand HR, but who are also proficient in the HR world.
Why would you go through the trouble of finding a CEO who has a focus on HR? Why do we require such emphasis? Well, because every time before us also required change and new ideas based upon what was important at that time. Now we entered the era wherein the most important part of our company is based on our people and their, often irreplaceable, talents. Society is focussed on letting each and everybody develop their talent to maximise our output. Schools, universities, training centres, they all know the importance of a development focussed approach. Therefore, it is time that companies adopt the same focus, which requires the same type of leaders.
It is therefore important that our future CEO’s not just understand a recruitment process, but that they are able to build up an entire talent acquisition strategy. That they are not only able to see the value of teambuilding exercises, but that they understand how to shape and create cultural change. That they are not only concerned with training their employees to stay up to date with technologies, but that they can shape trajectory and development plans to provide opportunities for growth. In short, it does not suffice anymore that our leaders know and do the basics. It is time that HR takes its rightful place in the centre of a company whose main unique selling point is its people. It is time that we accept that the centre stage of our time belongs to HR and development, but that also means that it is time for our HR professionals to step up to the plate. It is not enough to stand in line and to ‘offer service when asked’. HR departments need to transform themselves from administrators to proactive managers. We need to find value which we can contribute to our employers. Find cultural problems and solve them, develop training and development strategies and empower our co-workers to be co-champions. It is only by doing so that HR will be lifted to strategic importance and that we get leaders who understand and are proficient in the realm of HR.
For me it is only clear that the next generation of new leaders has a background in HR. We are broadly agreeing that our human capital is in the widest sense the most important aspect of our company. We are recruiting, coaching, training and developing our employees, but to truly stand out for our employees, HR needs to be lifted to strategic importance. Therefore, I believe that we need leaders who understand this importance and have the capabilities to do so.