I get a lot of questions about why I left “the business.” What people really mean when they ask that is: Why did I leave my job as an operator running multi-million dollar enterprises to go into human resources?
The people who ask this question are often shocked because they view HR as a back-office function. We handle the paperwork. We deal with recruitment. We manage benefits administrators. At least, those are the tropes. But the way I see it, I never left the business, so I explain: People are the business. Talent is our competitive advantage. Without it, we are nothing.
When I say this, most people (executives included) reflect for a moment, nod their heads and move on. But they still don’t really get why I changed my career path. In theory, they understand that they should prioritize people, but in reality, they’re too focused on the product they’re building, the code they’re writing or the meeting on their calendar to really care.
And let’s be honest — it’s hard work. Every company is different, every culture is different and every individual needs something different. When it comes to your people, equity means meeting people where they are, one person at a time. Daunting indeed. But it's a challenge we're absolutely game to take on at Carta — and for good reasons: Companies that prioritize their people are more effective, more innovative, more successful.
According to a report by Gallup, highly engaged teams result in 21% greater profitability. Similarly, a report from the American Psychological Association indicated that companies with well-being initiatives are much more likely to have their employees recommend their company as a good place to work. And research from Deloitte found that investing in diversity and belonging is so important that at one company, "if just 10% more employees feel included the company will increase work attendance by almost one day per year per employee."
Between all the calls and the projects and the clients, how do we pause and really commit to our people? I have three tips for executives who are truly invested in creating a company and a culture that does exactly that.
1. Invest in HR like it’s a front office business strategy.
Because it is. The work that an exceptional HR team can do with your business leaders can transform the success of your bottom line. When you properly align the skills and aspirations of your talent with the work that needs to be done to achieve your business goals, you reach nirvana. That is what high engagement looks like.
It sounds simple, but for anyone who has ever tried to do it, you realize how hard it can be. It’s so hard most people give up. And since most organizations underfund their HR department, they don’t have the proper time or resources to invest in solving the hard problems.
For some firms, this is a whole mindset shift — one that will make a world of difference. To put it bluntly, how willing are you to use the balance sheet to invest in the people function? The answer should be “extremely willing.”
2. Don’t underestimate the power of data.
How do you convince an entire executive team and an organization to start thinking about HR as a worthy investment? Generate hypotheses and use data to test your assumptions.
Here’s a sample hypothesis: Let's say we have a pretty great referral bonus program and we spend $X amount a year on it. I hypothesize that the hires we make from employee referrals stay longer and perform better than hires who don’t come from referrals. Is this true? If it is true, then perhaps we should pay even larger referral bonuses. But if it’s wrong, and we don’t see any benefit to our business, then why are we spending as much as we are? Perhaps we take that same budget and invest even more in hiring diverse talent by building a relationship with an HBCU. And then we’ll track that and see what kind of ROI we get.
Refine your story and create a compelling business case for an investment based on the outcome of your hypothesis. Sound familiar? It’s just what we do in the business when we seek investment. In HR, it should be the same process but with a focus on your talent.
3. Consider design thinking and MVP HR.
Design thinking applies to HR, too. Just like product managers in the business, great HR people have a deep interest in observing and developing empathy with the “target user," i.e., our employees, our candidates and our alumni. Your HR team should obsess about building products, solutions and services that meet the needs of these groups.
The key is to move fast and release minimum viable products (MVPs) that test solutions as you go. Eric Ries’ book The Lean Startup explains this well. In the HR world, it’s really easy to get bogged down in the nuances and needs of each business area, different managers and lots of varied employee needs. Don’t fall victim to this trap. It ends in stagnation and frustration. Move quickly. Test ideas and assumptions. If you keep data in mind as you build, you can test your success (or failure) quite quickly and pivot when you need to — and we almost always need to pivot. But don’t let perfection be the enemy of the good. Get good enough out the door.
People are the beginning and the end of every business out there. There’s enormous power in saying that you prioritize people — and even more power in acting on it.