Winning - Jack Welch [34]
“Without doubt, the head of HR should be the second most important person in any organization,” I said. “From the point ofview of the CEO, the director of HR should be at least equal to the CFO.”*
There was a strange hush in the place. In fact, it was so quiet I thought my Boston accent had thrown off the translator.
“Isn’t that what happens in your companies?” I asked. “I mean, let’s get a show of hands. How many of you work at companies where the CEO treats the director of HR and the CFO with equal respect?”
Fifty hands went up—fifty out of five thousand people! No wonder no one had clapped! I had accidentally stepped on the toes of about 99 percent of the crowd.
Later, at a reception after the session, one person after another from the audience told me how HR was belittled and underutilized in their organizations. In all, about thirty people told me stories in the same vein.
Worse, their reports turned out not to be an exception. I have asked my stature-of-HR question at about seventy-five other speaking events since Mexico City. The results are always disturbingly similar.
It blows my mind. Even if your company is too small to have its own HR department, somebody has to be doing HR.
And HR has just got to be as important as any other function in a company.
In fact, why wouldn’t HR be as important as finance? After all, if you managed a baseball team, would you listen more closely to the team accountant or the director of player personnel? The input of the team accountant matters—he sure knows how much they can pay a player. But his input certainly doesn’t count more than input from the director of player personnel, who knows just how good each player is. Both belong, alongside the CEO, at the table where decisions are made.
Unfortunately, at a lot of companies, HR isn’t even in the same room.
The reasons, I think, are threefold. First, the impact of HR is hard to quantify. You can see how sales and R & D affect performance, and how finance tallies it up. But HR deals with “air”—people skills. Not only are people skills squishy-soft, most people assume they have them in spades. How many times have you heard someone say, “I’m a people person!”
Second, HR too often gets relegated or pushed into a benefits trap—administering insurance plans and overseeing scheduling issues like vacation and flextime. It also gets saddled with health and happiness activities—putting out the plant newspaper and organizing the summer picnic. Someone has to take care of these tasks, but if HR gets stuck doing them all the time, its stature will never be what it should.
Third, HR becomes twisted up in palace intrigue.
Back in the 1960s and early ’70s, GE went through a period like that. Its HR system ran on gossip, whispers, and tattling. A small and frankly terrifying group of HR executives held secretive opinions about every manager, and they could tar you for life if they wanted. On the other hand, they could also move you up very quickly. They thought of themselves as kingmakers.
The game changed completely when Reg Jones, the CEO at the time, appointed Ted LeVino to run HR. Ted threw open the shutters and let the light shine in. HR processes soon became transparent, and more importantly, they began to make sense. By the time Ted retired in 1985, HR was on its way to doing exactly what it should: listening to people vent, brokering internal differences, and helping managers develop leaders and build careers.
That’s why the best HR people are a kind of hybrid: one part pastor, who hears all sins and complaints without recrimination, and one part parent, who loves and nurtures, but gives it to you fast and straight when you’re off track.*
I’ve found over the years that the best pastor-parent types have usually run something once in their careers—a factory, a product line, or another function. But I’ve also seen some come right up through HR. Either way, the best have stature beyond their rank and title. They know the business—its every detail. They