I n 2014, Ram Charan, the well known global adviser to CEOs, wrote an explosive piece in Harvard Business Review where he said it was time to bid goodbye to the HR Department.

He said CHROs were mostly process-oriented generalists and should be eliminated. Split the HR department into two, he urged. Move one function to administration, and the other could be tasked with improving people capabilities. Now here comes a new book, Talent Wins: The New Playbook for Putting People First, that he has co-authored with Dominic Barton, global managing partner of McKinsey & Co, and Dennis Carey, Vice-Chairman of Korn Ferry, where the CHRO plays a key role in the agile new organisation. Is this a contradiction of what he said in 2014? Actually the HBR article was the genesis of this book, say the authors. Edited excerpts from an interview with the acclaimed leadership coach:

A few years ago you wanted HR to split up and companies to bid goodbye to CHROs. Now in this book, you are actually elevating the CHRO to a role parallel with finance?

What I wrote then was that I wanted the CHRO only to be involved in developing leadership and managing talent. Not in day to day transactions. I also said that the CHRO must be drawn from operations and be conversant with the business side. I happened to be ahead of the curve then. Now you are seeing HR’s transactional jobs getting automated. An example in the book is Johnson & Johnson which has automated two-thirds of HR processes.

Doing this will create redundancies. But there are plenty of possibilities for those people. They can go into people-to-people roles such as customer service or learn new skills and go into sales and marketing. Every human being must think and go into jobs that have value.

You advocate the use of HR Tech to automate processes. Yet companies seem to be utterly confused about using software.

Many HR people don’t understand the new technologies. HR people have to decide what the tech must deliver and why it is needed and choose accordingly. Tech investments just to reduce costs are not a strategy. The most important need is to have data on each employee so that he or she can be fitted into the right team, and then monitor how far they have progressed, and what training to give them. In the book we show how PepsiCo is succeeding in the use of HR Tech. It is succeeding because it has been very thorough about it.

You have also said you need to totally re-imagine the HR function. Is there a successful model?

No one model is going to fit all companies. But as we advise in the book focus on G3 – a group of three people comprising the CEO, CFO and CHRO, Finance and HR have to work side by side. And focus on the 2 per cent that creates 98 per cent impact.

How did the three of you collaborate to write this book?

All three of us have extensively engaged with CEOs and CHROs. When we got together we found we were observing the same things. The CHRO does not go to the boardroom. Companies allocate so much time to planning their financial resources. They need to do the same with talent.

We conducted real experiments with people. We found that 2 per cent of the people have 98 per cent impact. They are the change agents in a company. So that’s how we began to talk about it.

All the ideas we have spoken about in the book have been tested first for practicality.

Yet, you warn that it is a change that will take long to happen.

The reason we say long-term is that many of the CEOs and CHROs are not up to the stuff currently.

Do you think the change needs to begin with the B-schools?

B-schools tend to focus on the financial implications of marketing decisions. They need to start including people implications too. They should have a small module on people strategies. And not just on the consumer. The case method is a good way of doing that.

I once attended a class in Harvard Business School as a young instructor sitting in the back. A famous professor came to teach in the class. He asked a student to start the class. This young person was well prepared. He outlined the case and at the end summed up his decision – that he would fire the person under discussion. The professor applauded. Then he told the student to collect his books and get out. The mortified student went to the door and as he was opening it, the teacher said, come back and sit down. How does it feel to be fired?

That was a learning. You need to get people to feel about people. B-schools tend to teach strategy before people. But it is people before strategy. Strategy does not come out of the numbers. The same numbers can be interpreted differently. The curriculum must always include people implications to make it practical.

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