Magazine article Personnel

HR Is the Key to Survival in the '90S

Magazine article Personnel

HR Is the Key to Survival in the '90S

Article excerpt

When Randy Thurman was named to head Rorer Pharmaceutical (now Rhone Poulanc Rorer) four years ago, outsiders were shocked. Thurman wasn't a veteran of marketing. He hadn't risen through finance. He wasn't a hired gun. And he wasn't a line manager.

Instead, his background was exclusively in human resources. Brought in from Exxon to head up Rorer's HR division just three years earlier, Thurman made his mark through a succession of high-profile coups: First he guided the company through a successful merger with Revlon Healthcare. After that, he began to oversee MIS, corporate communications and corporate planning and development. Finally, he successfully headed up Armour Pharmaceutical, a major Rorer subsidiary "I had built a strong track record, so by the time I was up for president, the board saw that I was the right person for the job," Thurman comments.

Think an HR background is too "soft" to shape a chief exec? Many American managers would agree. Nonetheless, someday soon Thurman may not be in the minority In companies across the country, a quiet revolution is underway: HR execs have dusted off their paper-pushing "personnel" image and gained clout. "HR is really changing; the days of being just an employee relation function are ending," says Marsha Worthing, senior vice president of human resources at Avon and a member of AMAs HR council. "Overnight we've gone through a real transformation-HR and strategic planning are becoming more closely linked."

This change in HR comes at a critical juncture: With America losing vital ground in the global marketplace, U.S. firms must find new ways of managing-or risk their very survival.

Since new management styles ideally should be implemented company wide, HR has become a key part of the puzzle. "One of the most serious reasons for America's lack of competitiveness is that top management does not understand that human issues are crucial to the organization," says Ben Tregoe, chairman of Kepner-Tregoe Inc. Adds Mary Rabault, a consultant with United Research, "More and more companies, as they move into global competitiveness, see that the one thing that can make a difference in the world market is people. Raw material, technology and systems are available to everybody." A foot in the boardroom By taking a leadership role in developing employees to their highest potential, many HR execs are getting management to deal them into their company's power structure. Some, such as Eastman Kodak's John McCarthy and GTE's Bruce Carswell, currently serve on their company's board of directors. Many others serve as a key member of their company's top management team. At Du Pont, Senior Vice President Jerry Blumberg, who oversees both HR and corporate planning, is a member of the office of the chairman-a select decision-making group composed of the firm's top five executives.

How far has the HR revolution gone? According to the consulting firm Temple, Barker, and Sloan, in 33 out of America's top 50 companies, the top HR exec reports to his or her CEO. Another survey by New York-based Canny, Bowen Inc. shows that 40 percent of HR execs frequently attend board meetings.

Despite these statistics, not everyone is convinced that HR will pave the way to corporate survival in the 90s. "Most HR execs are still tied up in being a regulatory agency," laments quality guru Philip Crosby. "There are two departments behind the times. One is HR, the other is purchasing. There are enlightened people trying to change this, but most HR execs are their own worst enemy It's a case of Physician, heal thyself."'

"Far too many HR execs operate with only a clerical view of business, perpetuated with hiring more of the same," says John Zimmerman, senior vice president at MCI and a member of AMAs HR council. One highly placed source, when asked about the trend of HR execs sitting on their board of directors, quipped, "How many HR directors deserve to be on the board? …

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