Why does HR fail to be an effective business partner?

It has been close to 20 years now when the notion of HR as a business partner was floated by consultants and practitioners alike. It was supposed to be the natural evolution of the role of HR from being personnel managers to a functional group that is value adding. Yet, time and again I have had conversations with both HR people and line managers about how HR is unable to be an effective business partner. Why is this still the case? I will tell you why - Simply, because HR folks lack the capability and the desire to build the capability to be effective business partners. The y are still spending time on maintenance activities, don’t make enough of an effort to understand the language of the businesses they are serving and don’t know how to ask tough questions of the business they are serving. The HR generalists responsible for partnering end up being order takers at worst and compliance officers at best! For example I was talking to the business partnering folks at a global energy company. The HR generalist didn’t know how to respond to changes in the operational plan for a site that was producing gas. Neither did they know how to support the site or the region in capability development in an effective way. They focused purely on recruitment and compensation. None of the HR partners had actually spent meaningful time offshore to understand how work gets done or the conditions in which the workers were working! If HR has to build a reputation for business partnering, a few things need to happen: a) Increase the competence of those being hired into the HR function – hiring standards need to be raised – or else HR will always be maligned b) HR professionals need to understand the economics of the businesses they serve and the entire company c) HR partners need to be able to ask tough questions of the clients they serve d) HR managers need to develop a general manager’s sense of how different elements of the organizations work together e) Line managers need to coached as to the role of HR f) The CHRO must be a strong person with credibility at the CEO and board level

The Facebook IPO - a tale of Greed

The Facebook IPO has been a classic case of greed - the underwiters, the management, the ordinary investors (though they were misled some might argue). The night before the IPO I had an argument with a few friends as to why I thought the IPO was overvalued - $100 billion didnt make sense on a profit of about $1 billion or so! Particularly when its usage was declining slowly both in terms of membership growth and in terms of time spent by members. More fundamentally it doesnt have a revenue model that was driven by users - it was driven by ads (unlike google which makes money everytime someone clicks on a paid word). Also - Facebook's management team had made some questionable choices about user privacy, about their own stock holdings and about their ambitions - all of which made me feel - this is no managemenmt team with a Higher Ambition - this is a team that wants to make money and lots of fundamentally. And now its VCs are selling their stock - they and the founders are the only ones that made money on this. The investment bankers also did a major disservice to the entire public by pricing the stock so high and by having such a large volume of shares available as part of the IPO. They were downright greedy and stupid. Lesson - Greed is never good.