What makes a business function critical in an organization?
I believe it's tangible as well as the intangible contributions to the success of the firm that makes Human Resources the most critical department.
Till recently, sales & marketing and product functions were considered to be the most important branches of an organization. No firm will ever exist without these functions. People, like machines and equipment, were just deemed to be a valuable resource to realize organizational goals. Human Resources (HR) became an administrative function. The task of HR was mostly related to managing the workforce efficiently.
While the Sales & Marketing and Product departments have got all the praise for an organization’s success, the HR has been consistently ridiculed for its so-called insignificant contribution and stupid policies that kill innovation.
The time has changed dramatically. In the digital era, when companies have been growing faster than ever, the people are no longer just a resource. Despite brilliant sales & marketing efforts and excellent products, many companies have failed miserably. The founders, CEOs & investors have realized something that has just been a concept for HR textbooks for quite long: People are the cornerstone of any organization. People create culture, and it is the culture that makes the companies successful in the long run.
In the era of technology, the future belongs to the HR. Here is why:
Only HR can create a winning culture
Core business functions are busy in achieving the sales target and ensuring sufficient supply of the products in the market. They also need to take care of efficient service delivery to maintain and improve customer satisfaction. While all employees contribute equally in developing the culture, it is too important to be left to the mercy of individuals or departments that have a lot of other things to do. Some CEO may fail to develop a sustainable winning culture due to short term financial goals and pressure from stock markets. Wells Fargo is one of the best examples of this. It is only the HR department that can develop a winning culture that can sustain organizations for many generations.
Only HR can Provide Strategic Leadership Role
The time is changing faster than we can imagine. The organizations have to achieve two simultaneous goals: one, they need to deliver the numbers to stay in the game and two, they need to adopt changes quickly to maintain their competitive advantage. The core functions need to achieve the first objective by setting a short to medium term goals. It is the HR department, which needs to provide strategic leadership to the organization by studying the external environment and developing sound strategies that make organizations agile and trendsetters for the industry in the long run.
Fostering Innovation
The world has become flatter than ever. The competition is not just limited to top players in the industry. A startup with a disruptive business model can become a competitor of well-established organizations in no time. The organizations have to develop a startup mindset to innovate and succeed by creating and leading disruptive business models. This requires close coordination among all departments. It is the HR department that can develop the capability to interlink various functions to collaborate and innovate. HR is going to be the lifeline for corporations in the future in this regard.
With the changing times and needs, the name of HR department may also change to reflect its new role. No matter what name is given to it, organizations have to overhaul their HR department to survive the next big disruption in their industry. The HR, on its part, must be prepared to embrace these drastic changes gracefully and responsibly.
Latest posts by Adela Belin (see all)
- Why HR Will Become the Most Important Business Function - December 20, 2016
