Sanders Says - Why HR is more important than product, marketing or sales

May 23, 2011

Why HR is more important than product, marketing or sales

Today I spoke to 300 HR executives about their Net Worth.

I had them start out by repeating after me: "I am not a cost center!" This was an important exercise, because too often we look at Human Resources as a staff function, like legal or corp communications. We treat sales like Rock Stars (because they bring in money). The marketing department has fat budgets (because they create demand for sales). Then, the product group is revered (because they bring new offerings to the table). This mentality needs to change.

HR is the engine of growth for any company for a few reasons:

1 - The Brand Inside = The Brand Outside. If your people aren't happy, they'll talk about it on social media and in public. No ad campaign or new product can overcome the 'buzz' that your company is a bad place to work. Read former Nike/Starbucks marketing guru Scott Bedbury's book (A New Brand World) for more on this.

2 - Customer Loyalty - The People Customer Model is now taught in business school, whereby companies that do well by their people have happier customers (via engagement and gratitude) and stronger bottom lines. HR is key to this, helping in areas like talent management, wellness and training.

3 - Information Mastery - The new company model is about information, not stuff. From retail to manufacturing to services, being an 'Information Master' is the secret to winning your market. According to John McKean's research, HR's domain (people, culture and leadership) is twice as important to this end as Information and Technology (which gobbles up 92% of the budget).

I believe that every company should have a Chief People Officer, and she/he should have a seat at the table alongside the Operations, Marketing, Finance and Sales officers. Otherwise, you're designing your company to make one of it's top profit centers under-powered for the job.

Just sayin'.

Posted at 11:17 AM in Business Effectiveness | Permalink | Comments (4) | TrackBack (0)

Comments

It's hard to imagine that organizations in this day and age still regard employees as liabilities (costs) instead of assets. And even the rhetoric of "we value our employees" rings hollow when the actions (i.e., budgets) are still focussed on "stuff". Moreover, I think HR as a profession needs to renew its brand and focus its efforts on leadership, organizational capacity and demonstrate its ROI.

Posted by: Doug Blackie | January 02, 2012 at 01:18 PM

So true. The people will make or break your business. Find good people and treat them right!

Posted by: seo las vegas | September 22, 2011 at 12:36 PM

Absolutely - it's ALL about PEOPLE when it comes down to it. Fail to understand this and you ultimately fail in business - even if it takes 20 years to realise it.

Posted by: Internal doors | September 18, 2011 at 04:09 AM

Awesome, dude! :-)

Posted by: C. A. Hurst | May 23, 2011 at 11:45 AM