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Making Money IV
(January 20, 2003) - 
So, maybe the question isn't strategy at all. In a recent note from staffing.org (the little outfit trying to bring standardized metrics to the industry), we received a lengthy tirade about the fact that strategy is the third part of an organization's approach to accomplishment. First comes "mission," then comes "objectives," and then, and only then, do line supervisors define their strategy for accomplishing the executives' dream.

What a happy, passive role for people, who like semantics. Just wait till the boss tells you what he wants and then figure out how to do it. We tend to terminate that sort of person fairly quickly. 

Sadly, "wait till the boss tells you what he wants" is exactly the reason that we are the Rodney Dangerfields of the organization. The view put forth by staffing.org is that the proper role of HR is to stay removed from corporate direction, to be an execution arm. Imagine trying to pass that sort of nonsense off on the Marketing, Sales, or Production chiefs. Strategic players influence and shape policy and direction. Bureaucrats get outsourced.

For the HCM function to become a non-hygiene component of the organization, it must find a way to contribute to the making of money. As defined in the first half of this series, that means creating revenue, cashflow, margin, investment capital, operating capital, new products, or things that directly lead to their development.

Let's get one thing clear. Reviewing résumés is the exact opposite of recruiting. There is no way that a résumé processing empire, masquerading as a recruiting department, can do anything but reduce costs. If you are not proactively recruiting, the chance of making the overall HR department into a strategic arm of the company is quite small. Since most ATS systems attempt to focus recruiting departments on résumés processing (they look mostly at applicants, after all), we're tempted to say that step one in transforming HR would be to turn off the ATS.

Of course, we're being metaphorical. The reason we have been such diehard fans of the Hire.com offering is that it is a wolf in sheep's clothing. While it will accomplish the regulatory requirements of the hiring management process, the Hire.com suite of tools forces its users to focus on recruiting, which is an intelligence gathering, communications, and sales process, not an administrative process. The Hire.com offering is different because it is focused on results, not administration. While it competes effectively in the ATS marketplace, it is a results turbocharger.

That's where the search for 'making money' really begins in HRwith results that matter. You can imagine the Training Department improving the time to productivity or reducing the corporate learning curve for new production techniques. You can even imagine that they might become the focal point for knowledge management (the idea that company knowledge must be retained even if individuals aren't). Training could easily (and should) be positioned as the company's primary security net. 

We roll our eyes at the prospect of the admin component (timecards, payroll, and bennies) becoming profitable. Where there are "OD" teams, they are best absorbed by training.

That leaves Recruiting-Retention, which can and should be the focal point of HR's initiatives, to make the firm real capital.


- John Sumser

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