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Critical Summary Its time to split HR

Ram Charan
Mr. Charan begins this article with an extremely controversial statement saying that its time to
say good bye to the department of human resources. In our opinion a claim of such scope must
be substantiated with an adequate reasoning which he fails to do.
Mr. Charan says that a lot of CEOs are disappointed with their CHROs. He says that a lot of
functions like linking people and numbers to diagnose strengths and weaknesses in an
organization are not adequately fulfilled by the CHRO. He believes that unlike CFOs, CHROs
have ceased to be sounding boards or trusted reliable partners to their CEOs. However in our
opinion a lot of HR managers have played a pivot role in shaping their organizations. Hence the
reasoning that HR managers have ceased to be reliable partners is flawed.
We do agree with some of the contentions raised by Mr. Charan especially when he says that
CHROs cant relate HR with real world business needs. It is necessary that in todays dynamic
changing environment a strategic fit between the HR strategy and overall business strategy is
important. Another observation Mr. Charan makes that successful HR managers usually have a
background in departments like sales, service, manufacturing or finance. We do agree that having
a prior experience in these fields does equip one with the nuances of how a business functions
but a focused training in the field of HR can enable a firm to successfully develop competent HR
Mr. Charan contradicts himself when he says that the HR function must be split into two parts for
the purpose of practicality. This reasoning exposes a logical flaw in his argument when he
initially says that HR must be totally eliminated. Having a split HR department may or may not
work for a firm but the idea is definitely worth the debate. He says that HR-A would specifically
look after compensation and benefits and would be directly under the CFO. This view has had its
fair share of opponents one of the classical being Keith Hammonds in his article Why we hate
HR when he says how an HR under a CFO is a sure shot recipe for disaster.
HR-LO which stands for leadership and organization is actually where alignment between HR
and overall strategy is possible. We agree that developing peoples capabilities is a step towards

having a sustainable competitive advantage. Having people from different areas will definitely
help in the short term but we believe that a firm must have a long term plan to groom successful
HR managers who are focused only on HR and not taken from any allied fields. We must realize
that HR is as important a function as finance or manufacturing and hence a long term strategy in
terms of business alignment, grooming of managers must be a prime focus for any organization.