Aug 9, 2010

Innovation and HR's quest to be strategic

Peter Drucker is famously quoted for two statements which distill the basic purpose of businesses.
One says that There are two functions of business - innovation and marketing.
The other says The purpose of a business is to create a customer.

If you search for the phrase "HR seat at the table" on a search engine like Google you'll get lots and lots of results.

However it is not possible for any function to be considered strategic unless it impacts directly either of these two outcomes - innovation or creation of a customer.

Traditionally the domain of marketing and creating new customers has been the forte of Sales and Marketing.

And Innovation has been the preserve of the R&D group. In certain organizations that innovation is not about the product but a business model - like doing the things faster, better and cheaper than the product innovator.

So if HR really wants to be strategic - either it should wait for a business leader who believes that the "culture is the brand" or else go and do stuff that will impact the ability of the organization to either innovate or create new customers.

Unless HR leadership in a firm evaluates most of their initiatives - from Talent Acquisition to Leadership Development to Total Rewards on these parameters - of innovation and creating customers - HR will never be seen as strategic.

HR professionals have also got to stop viewing themselves as "only" HR people - and they should preferably do stints in other functions to build knowledge and skill in aspects related to business models and customer relationship and enrich them with knowledge about people processes.

Are you ready to be strategic?

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