What does the CEO really want from the HR function in his or her company?

This question is one that concerns HR managers around the world (and if it doesn’t, then it should do!). So, it was no surprise that the CEO Panel Discussion was among the most popular events of last week’s American Chamber of Commerce’s HR Dream Day in Budapest.

Five country CEOs from five multinational companies took part in the discussion. Even though panel discussions are often a hit-or-miss affair – it is sometimes very difficult to facilitate a meaningful conversation between five people on a stage in just 40 minutes – this discussion did bring up some thought-provoking issues, especially about what CEOs find important and what they expect of HR.

Below are some of the key messages addressed to HR practitioners by the five CEOs, and added to them are some of my own thoughts.

“HR should have a deep understanding of the business.”

Aftab Ahmed, County Managing Director of Citibank

Even though many of us have heard this statement time and time again, in my opinion there is still plenty of room for improvement in this area. Line managers and CEOs I work with often complain about their HR department. They feel as if their HR people live on a different planet. They don’t seem to understand their business’s priorities and can’t offer solutions for their real concerns.

If you want to be a real HR partner, you should live and breathe the business. In this respect, HR practitioners who have a background in business, or even better have migrated from the business side of the company, have a great advantage. (I was once told by a HR director that his policy was not to take on anybody in his HR team without a minimum of two years’ experience of the business side.)

If you don’t have this sort of experience, you must ensure as you get as much exposure to “real business” as possible. Talk to your salespeople. Talk to the line managers. Visit the factory. Ask lots of questions. Ask for feedback on HR initiatives. Make sure that you and your team don’t fall into the trap of doing HR for HR’s sake.

“Let’s involve everyone in the company in the business, not just HR.”

Edina Heal, Country Manager of Google

This, in my view, is a very important approach. I would also add that it is HR’s and the management’s joint responsibility to ensure that everybody in the organisation understands the business, so that everybody can see how the company adds value to its customers. If you run a big company, you need to have a highly developed internal communication to achieve this goal. But it is definitely worth the effort, because in organisations where people can see the big picture, silo mentality is much less likely to occur.

“I need my HR manager to keep me out of trouble. So don’t just nod.”

Matthias Stickler, General Manager of OTIS in Hungary

All five CEOs at the panel seemed to agree that they need HR to be proactive, that they “need HR to address the issue before they become a challenge,” as Aftab Ahmed of Citibank put it.

This raised the following questions in my mind: What do HR managers and the HR team have to do to meet this expectation? How can a HR manager (and his or her department) act proactively rather than reactively?

Keeping the CEO out of trouble often means that HR should raise issues and highlight relevant points that the CEO might otherwise not have thought of. This is not an easy role to play. You have to be confident enough to raise your voice and express your concerns, but you shouldn’t do it too aggressively, otherwise your suggestion will face stiff resistance. As a HR manager (or any HR practitioner), you must be a master of assertive communication.

“I hate it when HR is called a service unit. It puts HR in the position of a servant.”

Péter Sipos, CEO of Lufthansa Systems Hungary

He continued: “It implies an attitude when HR is told what to do and they should execute it. Instead I expect HR to tell me what to do. But of course this role comes with responsibility.”

This point made me think: not all HR departments are in the same position when it comes to acting like a real business partner. A lot depends on the organisational culture.

In some companies, the management team naturally takes the HR director’s opinion just as seriously as that of any other business manager. In other organisations, representatives of HR are not even invited to participate in relevant business discussions.

However, let’s not make the mistake of using our not-so-HR-embracing company culture as an excuse for not becoming a business partner.

“You, as a HR manager, have to manage your GM as well. You should present your proposal in the right way; you have to sell it.”

Tibor Czakó, General Manager of Flextronics

He added: “If you get a NO in answer to your proposal, you should investigate your own responsibility [in this rejection].”

Here, I couldn’t agree more. As a HR manager, it is also your responsibility to develop the organisational culture to the point that it regards HR as a function worth taking seriously, as HR adds great value to the business. So, if you work for a company where HR is merely regarded as an administrative department, one which should keep out of the way of business, you should ask yourself: what am I going to do to change this attitude?

It will probably take a long time to earn the business managers’ trust. Changing organisational culture takes years. Which is all the more reason to start now.