We love our human resources department. They do a lot of good in a business. They help with recruiting, training and onboarding. They help with setting benefits plans. They help with creating a strong company culture, and many other good things. But I have been involved with a lot of human resource managers who have crossed the line between supporting the business, and dictating the direction of the business. You as the CEO need to make sure you know when it is happening, and do your best to ensure it doesn’t happen, which could capsize your business plan. This post will help you do exactly that.
An HR Case Study—A Single Veto Vote Can Topple the Entire Apple Cart
I was once working with a client where we were setting a new organizational chart structure in the marketing department and recruiting a couple of new employees to fill those holes. In that particular instance, the company also had a little bit of a “power struggle” and a culture clash going on between a few of the department heads, which needed fixing. My role as the interim CMO was to fix that issue and put the company onto the proper course and growth trajectory, as dictated by the company’s business plan, as created by the team.
When I finalized the organization chart for the marketing department structure that I thought was the ideal solution for hitting the company’s goals and growth objectives, it ruffled a few feathers of the current middle managers in the department, as it would have meant giving up some control over departments they were currently overseeing. But that was part of this company’s problem: the middle managers were inexperienced and doing way too many tasks in one role. The new structure would lighten their load and make the company more efficient and focused. The current middle managers proceeded to defend their turf, and ran to the HR department for support.
At the same time, the new organizational structure, would result in a change of reporting assignments, with people potentially getting a new boss in the process. And, those middle managers, didn’t want to change who they were being managed by. Again, those staff members went running to the HR department for help.
And finally, as we were recruiting new team members, we were trying to recruit really smart team members who could help move the company’s culture in a direction that was more entrepreneurial and nimble, as opposed to some of the entrenched processes that were slowing down the current thinking and operations. And when those new candidates were interviewed within the organization, again those same middle managers in the department felt threatened by the new people, as making them look stupid, impeding their ease of promotion, or forcing them to change the way they did their work. So, what did they do; they again went running to the HR department to help them.
Now comes the guts of this post. When I presented this organizational and hiring plan to the company’s CEO, he was 100% in alignment and gave me the green light to proceed on implementing it. But when I went to the head of the HR department to help me implement the restructuring and hiring, I was met with a lot of pushback. She had taken all the complaints of the middle managers, layered on her own opinions (as many of those middle managers were her personal friends), and proceeded to try to squash the agreed upon plan with the CEO. The CEO was not one for conflict, and backed down from the original direction, and let the HR department change the plan. The restructuring never happened, the new hires were not hired, and the culture of the department was never fixed. This collectively ruffled the feathers of the strong employees that I did not want to leave the company.
I just couldn’t believe what had happened: a couple disgruntled middle managers not happy with the new plan, just toppled the plan with the support of the HR department head that basically was given a “veto vote” on the company’s high level plans and directions. And, the CEO let it happen??!!
Well you can all guess what happened from there. The half of the marketing team that I did not want to quit, all left for new jobs. And, the company’s revenues dropped around 33% in the process, as the smartest talent in the company left and the newest ideas that would propel the company to new heights, intending to grow the revenues, were not implemented. What a mess!
What this Means for Your Business?
To all you CEOs out there saying this sounds familiar, you have to remember a few important things. First of all, the strategic plan is the strategic plan, and if you have a smart leadership team implementing that plan, you need to let the plan run its course—you don’t change direction on the whims and opinions of a single “veto voter” midstream. And, secondly, the HR department needs to know that they are there to support the business in executing its plans agreed upon by senior management, they don’t get to dictate direction . . . ever!! Yes, their opinions need to be heard, but if they get outvoted by the opinions of the collective management team, they need to back down. And if your HR department manager doesn’t subscribe to that model, they need to be replaced by someone who is willing to march to the beat of the company’s drums, not their own beat.
This post is not intended to bash all human resources departments or managers, as most are very good. But this post was simply inspired by one bad apple manager who was allowed to dictate his personal agenda, which ended up topping the company’s efforts in fixing and growing their business. If any of you think your bad apples are going to spoil your bushel (and worse yet impede your business plan), don’t let it happen. Have conviction in your plan, and make sure all managers are beating to the same drum.
George Deeb is a Partner at Red Rocket Ventures and author of 101 Startup Lessons-An Entrepreneur’s Handbook.