Thursday, April 17, 2008

Wanna keep struggling, or maybe become a loser? Then keep using your internal HR departments.

What's wrong with building an internal HR department? What's wrong with hiring HR professionals to manage people processes in your company? Nothing, really.

  • It just won't help you get the best out of your most leverageable asset.
  • And it certainly won't help you build a dynasty.

A great illustration of this counter-intuitive reality came from a CEO friend of mine who had done research into profitability and employee alignment. He was not happy. His company had a well-functioning HR department. He had always been satisfied and proud of this. They had good HR professionals on staff, and believed that they were doing a good job. Turns out, they were – as far as internal HR groups can do a good job. But it wasn't much good at increasing his profitability.

He told a story to communicate the dissatisfaction he was experiencing.

“Suppose that our company was a football team. Success, then, could be characterized as winning football games. Then, suppose that, of our 11 players on the field at any time, only 4 knew which end zone was theirs. Suppose only 2 actually care. Suppose only 2 know their positions. Only 2 know what their position is supposed to do? Then, what if only 2 trust their coaches, and fully support the plays that were called. What if 8 of the 11 were, somehow, actually helping the opposition? To make matters worse, suppose 10 of the 11 aren’t even committed to finishing the game. This team, so composed, will be hard pressed to win a single game.”

Then, he applied the story to his business, and what he had learned about profitability and employee alignment.

Well produced, traditional, internal HR departments have yielded the following results when employees are surveyed. These results come from case studies of 25,000 workers from all kinds of industries. The best, traditional HR practices yield less-than-stellar results.

37% know what the company’s trying to achieve and why.
20% are enthusiastic about their team objectives and organizational goals.
20% know how their job contributes to the company’s organizational goals.
20% know how their individual tasks affect those objectives.
20% believe that the organization enables them to execute key goals.
20% trust the organization and their leadership.
15% feel engaged enough to want to continue doing their job.

85% are ready to bolt if and when a better opportunity presents itself.

This CEO ran some internal surveys of his own, and although his results were a little better than these averages, he could see just how much more effective and inefficient his organization could be if he knew how to handle things differently.

He hired an outsource HR company, not to reduce costs, or to provide standard HR services, but for expertise at employee engagement and alignment. This group of non-internal specialists immediately went to work. Their fresh, external approaches suggested by multiple experts (he could not have afforded for himself alone) changed many of the dynamics within 3 months. Employee attitudes were improved, and his alignment survey results also started up. The result: Creativity, innovation, contributions by employees skyrocketed. So did his profits.

What excites him more is that he sees so much more happening in the future. He actually believes that his people can accomplish anything. He knows that he can create a sustainable competitive advantage, a "dynasty."

It's all good, now. The NE Patriots have nothing on him. Move over Bill Belichik. Step aside, Tom Brady. Well-aligned employees can do the impossible.

Don't be lulled into pseudo-satisfaction by traditional HR in your organization.

Check out CJ's professional profile at

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