Should HR Model Itself on Finance?
By David Creelman
There is a mood in HR that it ought to emulate the finance department. Finance seems to have rigor, respect, professional methods and accreditation. HR wants to be like that. That HR often reports to finance only magnifies the sentiment that this is the function to emulate.
Dave Wexler, who has led HR at various exciting organizations, feels differently. He says HR should set its heart on being more like marketing.
Falling in love with the business
Wexler says the starting point is always to fall in love with the business. Once you love what the business is striving to achieve, then a passionate and aligned HR function will follow. But what will that aligned function be like: a cool professional machine or something more…well, something more passionate?
Wexler argues that HR is fundamentally a creative function. It is not simply about applying best practices, complying with regulations or implementing proven processes. It is about finding creative ways to bring the best out of talent for a particular organization.
Marketing as the model
If we see creativity as a fundamental characteristic of HR then it is natural to look for inspiration from the marketing function, and not finance. Marketing has several characteristics which are quite different from finance. One is that it is much more deeply woven into the distinct fabric of the organization. While one set of accounts will look much like another, a marketing program should be uniquely suited to the business. Another difference is that marketing is a constantly competitive battleground where any clever tactic can be one-upped by competitors. Being effective in marketing demands creativity; being effective in finance is more about subject matter expertise.
Looking at marketing, HR will see similarities with that area beyond a need for creativity. A common difficulty is being able to assess the direct contribution to revenue and EBITDA from marketing or HR activities. Even a core HR program like leadership development creates value indirectly and that value is hard to measure. Marketing has the same difficulty in proving the value of investing in the brand. Wexler says we have to be creative in sparking an emotional connection between the audience and what it is that we are trying to make happen. We need to engage the right brain to clearly see the big picture if the spreadsheets are only generating murky images.
HR will also find in marketing a common willingness to grapple with intangibles. For marketing the organizing concept is brand, and that can manifest itself in such subtle (but critical) things as how buyers will react to a logo or tag line. Finance is less comfortable with intangibles. They prefer things they can count—like a fresh pile of dollars.
If HR is looking for a department to emulate, then marketing faces challenges more similar to its own than finance does.
Finding one’s own place
HR is not a mirror of marketing, and in any case marketing has many faces: from the highly procedural to the compliance driven to the madly creative. Similarly, we would be foolish to dismiss the powerful logic and discipline that have made the finance function so central to organizational life. Too often, and perhaps with too little consciousness, some parts of the HR world have adopted the finance function as their idol. It drives us towards an unduly cold function and toward a loyalty to the profession, rather than the particular organization. Marketing may provide a more inspiring role model, one where creativity and passion are fully at home.
Wexler likes the title of Tom Wujec’s book Return on Imagination. That’s what HR and marketing are really doing: creating a return on imagination. It pushes us away from the vision of HR as a set of efficiently executed best practices and towards the vision of HR as inventing a way to bring the business they love to life.
David Creelman is CEO of Creelman Research, providing writing, research and speaking on human-capital management. He works with a variety of academics, think tanks, consultancies and HR vendors in Canada, the U.S., Japan, Europe and China. David can be reached at email@example.com.