No company in the world would have an HR department if it was not considered a tool to conquer competition, increase profitability and secure longevity. The difference between a successful and a mediocre business is not whether you have an HR department or not – it is whether you truly understand why you have it, what is required for HR to add business value, and whether those pre-requisites are included in your strategy or not.
The short answer to the why is obvious: every penny counts.
To illustrate: imagine for a moment that your company is a Formula One team. If you are successful, chances are that you have lived your life in the world of motor sport and therefore you are well aware of the competitive edge that lies in having a world-class pit crew. The best driver and a competitive car, of course. But the most efficient pit crew? Yes. From being a disorganised affair including four mechanics in the 1950s, the pit stop (the part where the driver does nothing and the car stands still) has developed into a well-oiled machine including twenty specialists who measure time in milliseconds. The duration of the average Formula One pit stop is around two seconds; a few milliseconds too many in the pit can mean the difference between winning and losing the race.
Football is another excellent analogy. Every position needs to do their job if the team is to win. They work together, each playing to their individual strengths. And, since money is often used as a measurement of value, a study of the top fifty most expensive player transfers provides proof: the ratio between forwards/strikers vs midfield/defenders/goalkeepers is 50-50.
In business, every penny counts just as much as every millisecond in racing and every goal – or prevented goal – in football. And support functions (or rather enabling functions: anything from HR specialists to IT solution architects to front-left gunmen of the pit crew) have to be an integral part of the business strategy to be able to add the right value.
But how? For a company to fully utilise the power of its support functions and turn them into business enabling functions, two things need to happen:
- Leadership must see the big picture and realise there is competitive edge to be gained in every function, then invite them and their competence to be a part of the planning.
- The support functions need to understand the business – what drives it, what threatens it, what the company aims for – and be able to use their competence and insights to enable that business.
Which of the two pre-requisites is missing varies, but only too often one of them does. The remedy is increased maturity when it comes to people, culture and leadership – as well as time and energy freed up to work strategically together. The maturity of an organisation or an HR function is, however, far from synonymous with age: a workshop or two with expert facilitation will identify how to move your organisation up the maturity ladder at a pace limited only by your willingness to change. But that, much like the details of trimming a Formula One team, is another story.
Author: Eva Törnqvist, Co-founder and Consultant at Prasinum AB
Eva Törnqvist has a background as manager and leader in areas such as global service delivery, IT and HR, and also as a communicator, project manager and business developer. Eva runs the consulting company Prasinum, whose main competencies are in HR, leadership, IT, education and communication – a combination that provides an excellent base for services such as business analysis, change management, interim leadership and CIO as a service for fast-growing companies.