What makes finance so hot? (Editorial)

Getting a seat at the executive table alongside the heads of accounting, marketing, et al is an imperative for HR professionals. It’s not just a case of personal success, but as professor John Sullivan notes in his accompanying article on Enron, corporations ignore good HR practices at their peril.

Sullivan’s article is not meant as an indictment of HR professionals at Enron, rather it’s an examination of how numerous issues raised by Enron’s collapse are HR-related and thus the energy giant would have benefited from an HR department with control and power. And yet there are too many enterprises doing without HR input at the highest level. Instead of guiding people strategies that are fundamental to business success, HR is viewed as a function less important than other departments. Instead of defending and promoting the value of solid HR practices, maybe it’s time to challenge other business professionals about their presumed superiority.

Certainly operational heads belong at the executive table — their departments actually do the work being sold — but others seem to be looking down on HR from an undeserved pedestal.

Accounting and finance departments, a field from which many CEOs emerge, have been responsible for a series of spectacular frauds and failures such as Enron and WorldCom. Canada’s once proud Nortel is only the latest firm with a CEO and finance executives alleged to be responsible for accounting irregularities.

And then there are all the resources finance gurus pour into failed mergers and acquisitions. “Lost a few hundred million dollars buying that company in a failed attempt to gain market share and synergy? Oh well, time to start working on another deal.” But ask them for a small portion of those wasted dollars for an HR initiative, then you’d better start begging and have your ROI figured out.

And then there’s marketing. Another executive suite participant responsible for some activities of questionable value, like redesigning packages. “Hey, why not make the box smaller and green!” More often than not this tactic merely spends resources, confuses consumers used to the old packaging and creates problems in the supply chain. If you can’t find your favourite brand on the store shelf it’s usually because the manufacturer is short of product because the production of new packages is not up to speed yet.

A lot of marketing seems to be busy work. Take Ketchup. Everyone loves it and no one wants it green or upside down, but marketing keeps spending resources trying to come up with someway to improve upon perfection. (Okay, they did have something with squeezable bottles.) And if the major car manufacturers could stick to building one model properly instead of redesigning it with a new set of flaws every year for a new marketing look, we’d all be better off.

Humour aside, accounting and marketing are essential to corporate success. The problem is not enough organizations feel the same way about HR.

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