What are the honourable and horrible reputation that you think hr contributes

“I don’t know which problem to tackle first,” Luke Robinson said, sighing. Kate Rose, sitting across the table from him sipping her coffee, gave him a half smile. “You’re definitely in a pickle,” she said. He rolled his eyes. “Thanks a lot,” he replied. “You have an excellent grasp of the obvious. But what should I do?”

Robinson and Rose had been at the café for almost two hours; the lunch rush had abated long ago, and the midafternoon coffee drinkers were starting to trickle in. Robinson, managing partner of human resources at Loft Securities, had called Rose in part because she was a friend, but also because she was the vice president of human resources at a successful public-relations firm, and he knew that she was a first-rate manager. Over lunch, he had recapped his story.

A Rewarding Challenge?

Before Robinson joined Loft just over a year ago, he had been a partner at the Powell Group, a well-known HR consulting firm. His specialty there had been working with financial services companies, but when Powell’s own head of HR resigned abruptly for personal reasons, the senior management team asked Robinson to take over HR and help Powell retool its recruiting and development processes. Robinson had worked very effectively as HR director, helping the company’s consultants evaluate potential new recruits and putting together some very attractive development programs. The Powell Group, with Robinson’s help, had quickly become a robust competitor for talent.

Despite his success at Powell, Robinson accepted the job at Loft because he thought it would be a rewarding challenge. For most of its 30-year history, Loft had enjoyed a stellar reputation when it came to attracting—and keeping—highly qualified people. But in 1995, when CEO Philip Washington retired, things changed. Washington had personified Loft’s culture; it was his leadership and charisma that people thought of when they thought of doing business with the firm. And it was that same personality and drive that had attracted top people. When he left, some of the company’s vibrancy went with him. And within a year, two of the five remaining senior managers had resigned as well.

“It doesn’t matter why those two left,” Robinson told Rose between bites of gorgonzola ravioli. “But for the record, one retired and one went into teaching. It wasn’t because things were bad at Loft. In fact, the transition at the top was one of the smoothest I’ve seen. Bernie Shargall, the new CEO, was—and is—a perfectly good top manager. He was recruited from the outside, but by all accounts his appointment was widely supported. And I know from working with him that he’s highly skilled and highly motivated.”

The problem was, Robinson told his friend, the new CEO didn’t have Washington’s flair for attracting and retaining talented people. And the human resources department hadn’t been able to pick up the slack. The company had never paid much attention to HR because it hadn’t had to. Under Washington and the two CEOs who came before him, the department was simply an administrative function.

“Shargall, to his credit, recognized the problem,” Robinson said. “That’s why he hired me. But I’ve been there a year, and I haven’t been able to stop the slow bleeding: we’ve lost two other key employees in the last six months. And what’s worse, I haven’t made much progress at helping the company recruit new people or at changing the perception that human resources is just a bunch of clerks processing benefits forms and tracking vacation days. It’s frustrating, because you know as well as I do how much HR can contribute.”

Rose nodded vigorously. “In fact, ‘human resources’ made Loft the company it is,” she said. “The problem is, the most important human-resources mandate—attracting and keeping good people—wasn’t being performed by Loft’s HR department. Nor was it being performed by the senior management group. It was all Washington, and it seems as if no one is quite sure how to move on.”

“I’m trying to show them,” Robinson complained. “But even Shargall doesn’t know how to use me.”

Not For Lack of Trying

Rose asked Robinson to outline what he had done since joining Loft, and he quickly described a variety of actions. When he had first joined the firm, he had spent a good deal of one-on-one time with each of the senior executives, asking them about the kind of people that made the company successful and how they viewed the talent they currently employed. He had also met with many other employees—managers, brokers, administrative assistants—and all the members of his own department. And he had spent time with most of the HR group’s principal external contacts, including search professionals, campus placement officers, benefits providers, and training organizations.

During those meetings, he had gotten the sense that recruiting wasn’t Loft’s only problem. There seemed to be conflicting opinions about whether Loft was, in fact, a good place to work. And it seemed to him that most of the people at Loft were not accustomed to anyone from the human resources department asking probing questions.

The people at Loft were not accustomed to anyone from the HR department asking probing questions.

So Robinson had taken a number of steps. He established a set of internal service standards, performance guarantees, and ongoing customer-satisfaction measurement programs for his department. He created “listening posts”—that is, he sent a member of his staff to each of the firm’s locations on a regular basis to hold office hours and answer questions or provide counseling. He implemented an “HR ambassador” program, assigning individual members of his staff to develop relationships with the people in a particular area of the company so that they would have a voice speaking for them within HR. And he set up a regular schedule of meetings between himself and each of the firm’s business-unit heads. He also began a comprehensive assessment of the quality of the HR staff, both individually and collectively, and replaced two under-productive employees with people who had solid experience in developing professionals in service firms like Loft. Finally, he drafted plans for a program to help educate all the company’s employees about the role of HR—specifically, how it could contribute to creating and upholding the firm’s strategy for success.

Rose had listened pretty much without comment as Robinson went on and on.

She frowned when he told her about the executive committee meeting he had participated in after three months on the job. He had presented his findings and outlined his plans, thinking they were well-received because at the time they met with little in the way of challenges or discussion. “Shargall and the others were being polite, but they weren’t paying attention,” was his take on the meeting now.

Loft’s executives seemed to be listening, but they weren’t really paying attention.

She raised an eyebrow and murmured “ouch” when he confessed that the year-end bonus checks for the managing directors and vice presidents had been inaccurately issued. “It took us almost a month to sort out the problem with payroll,” he said. “And I know it was a simple clerical error, but it certainly didn’t help my cause.”

And she nodded in sympathy when he told her how HR had mishandled an investigation of a discrimination charge shortly before he joined the company. “But that wasn’t me,” Robinson said, his voice revealing his frustration. “The group of people I’ve put together would do no such thing!”

But Rose hadn’t said much, just encouraged him with a “Then what?” or a “Could you explain that a bit more?” as he told his story. Throughout the lunch, Robinson’s food remained almost untouched. When the waiter came to check on them, Robinson looked at Rose’s clean plate and waved away his own.

An Uphill Battle

As they finished their cappuccino, Robinson leaned back in his chair. “Well?” he prodded. “Well, what?” Rose asked. “I know that you’re doing many good things. But you’re facing a battle that few before you have won. Do you have any idea how hard it is to turn around a reputation created by someone else? HR in particular is a difficult area—although most internal-service functions would argue that they are underappreciated as well. Does Loft respect its IT department? Its accountants? Look around you. You’re probably not alone.”

“I have to tell you, I’m thinking about throwing in the towel,” Robinson said. “It’s not that I miss consulting per se. But I was accomplishing something in that world, and you know the saying, Those who can, do, and those who can’t, teach? Well, I’m beginning to think that it applies to me.”

“No, no,” Rose laughed. “I’m sure that it doesn’t. But I will give you some advice…”

What Is the Best Advice Rose Can Give to Robinson?

Laurie Broedling has served as vice president for employee involvement and people systems at the Boeing Company and as senior vice president for human resources and quality at McDonnell Douglas Corporation. She is now a consultant in northern Virginia.

Luke Robinson is doing many of the right things at Loft Securities. Listening posts, ambassador programs, and one-on-one meetings with department heads are all good initiatives. His good work will be in vain, however, unless he changes how CEO Bernie Shargall and the rest of the firm’s senior managers view human resources. Shargall has an inkling that HR needs to expand its role, but Loft has long been run on the power of personality—particularly that of the former CEO. Accordingly, it will take some effort to convince those at the top that an organized approach, with HR leading the way, is what’s needed now.

How can Robinson pull that off? First, he needs to gather data that will show the senior management team—in a concise form—the difficulties the firm is having recruiting good people and keeping them motivated and satisfied. These are financial services folks: they aren’t looking for an impassioned speech about the company’s soul; they’ll want information in a form they can recognize. Right now, they don’t see much value being created by Robinson’s department. Instead, they see a flurry of administrative activity and a round of bonus checks that weren’t issued properly. Ouch, indeed. Robinson needs to clarify what Loft really needs.

Then he needs to present the data—and follow up—in a way that shows each senior manager that HR’s efforts will benefit his or her own bailiwick. How? By decentralizing the HR department. Robinson should take his ambassador program one step further and assign each member of his team to a particular senior manager. They should do for that manager what Robinson will be doing for the CEO—educating, listening, counseling, and guiding—until the company is back where it should be, and beyond.

Why does Robinson have to go that route? Because in this situation, perception is as important as reality. It’s not that a centralized HR function is necessarily less effective than a decentralized one. In many cases, the opposite is true. But if Robinson puts ten HR people in a room, all presenting their findings to the senior management group and offering to help, people are going to scream about costs. Every senior manager is going to wonder if his or her department is getting optimal support or the short end of the stick. On the other hand, if he takes that same group of HR people and has them work in a way that is tailored to individual managers’ needs, he’ll create the perception—to back up the reality—that the work of the HR department is vital to the organization’s success.

Now, a word of caution about decentralization. The danger is that the firm’s line managers will wash their hands of the responsibility for attracting and keeping good people. Robinson must strive for the middle ground: his people should be partners with the firm’s line managers—nothing more, nothing less.

That danger, however, is no reason to shy away from decentralizing. In fact, the potential rewards far outweigh the risks. Loft’s senior managers don’t seem to recognize that they badly need help in developing and maintaining a positive corporate culture, which is the heart and soul of an organization. An up-close-and-personal HR presence will help improve the company’s culture as nothing else could. Financial services professionals, like engineers, are analytical types who often do not pay enough attention to issues of human relations and group dynamics. That doesn’t mean their corporate cultures are bad; it just means that the need for HR to play a large role on behalf of employees is more acute. Companies are like families: all sorts of difficulties arise unexpectedly—interpersonal problems, problems at home that affect work, technical problems that become personal because they create stress, conflict between departments, you name it. Organizations that are prepared to deal with such issues are way ahead of the game.

It’s interesting: people who, early on in their careers, find out what a human resources expert can do really get hooked on the value of the function. By the time they are line managers, you’ll find them working in tandem with HR, expecting support and input when crafting strategy and turning to HR for guidance with all sorts of management dilemmas. On the other hand, people whose early encounters with HR lead them to believe that the function is made up of people who push paper and live way down the hall have the opposite view. By the time they become line managers, they either actively dislike HR or think it is irrelevant. At Loft, my sense is that the employees, from the CEO on down, think that HR is irrelevant. Robinson has the potential to change that perception—if he keeps at it.

In his efforts to expand the role of HR, Robinson must not forget that administrative duties are the function’s bedrock.

One final word of warning. Even if Robinson follows all my advice, he could still blow it if he allows his staff to make another mistake like the one they made with the bonus checks. In his efforts to expand the role of HR, he must not forget that administrative duties are the bedrock of the function. Sure, the bonus-check snafu was one error out of thousands of potential opportunities to make a mistake, but it was the wrong error to make with this group. Another one like it will ruin his credibility—no matter what progress he makes in other realms.

Eeward E. Lawler III is a professor at the University of Southern California’s Marshall School of Business in Los Angeles. He specializes in human resource management strategy and organizational effectiveness.

If I were advising Robinson, the first thing I would do is remind him that he used to be an excellent consultant. Then I would try to make him understand that to succeed in his current position, he needs to return to that role. Robinson shouldn’t be trying to become the recruiting arm of Loft Securities; nor should he be trying to position his department as such. Instead, he should be teaching the senior managers, beginning with the CEO, how to represent the company to its current and potential employees. He should be helping Loft’s managers define and express the firm’s mission and culture. And he should be aligning his own staff to do the same.

In large, bureaucratic organizations, the jobs of recruiting and counseling employees naturally fall on the human resources staff. But in a company made up primarily of knowledge workers, it is very difficult for the HR department to carry off the job. It simply can’t provide the vision and the direction that knowledge workers look for and get excited about. Meeting Robinson isn’t going to do it for a financial services whiz scoping out potential opportunities. And current employees aren’t going to get all fired up when they hear him speak. That kind of leadership has to come from Loft’s managers, and Robinson would do best to use his expertise to ensure that it does.

Even if Robinson agreed with my line of thinking, he couldn’t simply jump up from the lunch table, rush back to the office, and begin steering his ship in a new direction. Robinson says he is planning a campaign to educate the company about the role of HR. If he goes ahead without a clear mandate from the senior management group, he’ll be heaping confusion on top of confusion. “I don’t know which problem to tackle first,” he told Rose. How is that sentiment going to play to the masses?

If Robinson goes ahead without a clear mandate from senior management, he’ll be heaping confusion on top of confusion.

Instead, Robinson must step back and renegotiate his contract with Loft’s senior-management team. He must clarify exactly how he envisions the functioning of the HR department at Loft, and he must detail exactly what he is willing and able to do as its leader. And he should ask for the senior managers’ formal commitment to his plan. Only then can he proceed to educate the company about why he is there and what his team can do.

From a practical standpoint, I would suggest that Robinson meet first with Shargall to brief him on what he intends to say to the larger group. That way, he’ll have the opportunity to fine-tune his plan using feedback from the person whose voice counts most. During that meeting, Robinson should reiterate his commitment to improving the quality of the transactional side of HR. He has made some good moves in that area, but his department’s one blunder—the bonus-check blunder—has hurt him. Efficient administrative work builds credibility; Robinson mustn’t forget that.

Ultimately, Robinson may find that the current CEO and the rest of the senior managers, regardless of their intelligence and capabilities, are simply unable to respond in any meaningful way to his counseling—even if he successfully redefines himself and his direct reports as internal consultants. But before he gives up and returns to consulting, he should take one last shot at making HR at Loft work. Positioning the nontransactional work of the HR department is the make-or-break issue for HR in any organization. Loft has a solid reputation, even if it is in a slump right now. Robinson has experience on his side, and he knows what he’s dealing with.

“Those who can, do, and those who can’t, teach,” he said to Rose at the end of the case. As Loft’s head of human resources, he shouldn’t be doing. He should be teaching. And the sooner he begins, the better chance he’ll have of success.

Tim Riley is the vice president for strategic growth at Forrester Research in Cambridge, Massachusetts.

If Robinson is going to gain the respect he seeks for himself and for the human resources department at Loft Securities, he needs to take the following steps:

First, he has to approach his job differently. Robinson has a consultant’s mind-set. He needs to lose it, and begin to think and behave like a manager. As a consultant, his primary job was to analyze problems, formulate solutions, and present recommendations on how to implement those solutions. As the director of HR at his former company, Robinson seemed to maintain a distance between himself and the nuts and bolts of day-to-day operations. At Loft, he needs to manage the internal HR processes—and a staff, as well—so that his department can help the rest of the company improve its performance.

Robinson has a consultant’s mind-set. He needs to start thinking like a manager.

Sure, some of his initiatives have made sense: there’s nothing wrong with listening to employee complaints or creating presentations about solutions. But Loft’s senior executives hired Robinson because they respect his functional expertise. If he doesn’t redirect his thinking and find a balance between the tactical work that is necessary for short-term results and his own desire to play a longer-term strategic role, he isn’t going to succeed.

Robinson must balance the tactical work that is necessary for short-term results with his desire to play a strategic role.

Managing means delving into the heart of a problem. Sometimes it’s messy. Sometimes it means causing conflict or jumping into the middle of a conflict. Robinson needs to accept the messy parts of his job. Whether or not he realized it at the time, dealing with conflicts is what he signed on to do.

Second, Robinson needs to turn his attention to employee morale, which is in a downward spiral largely because so many respected employees have left and have not been replaced. How can he tackle this issue? One obvious place to start is with compensation. Robinson should benchmark compensation practices to ensure that Loft is offering competitive salaries and benefits. (I would recommend that he use outside consultants in order to perform the analysis quickly.) Given the history of benign neglect of Loft’s HR function, the company has probably fallen behind the market. If it has, it will be up to Robinson to persuade the CEO to do something about any gap between what Loft offers and what the market pays. Recruiting when you can’t offer a competitive package is like giving your competitors a 20-yard head start in the 100-yard dash.

Third, Robinson should also impose more control over each phase of the recruiting process. Right now, it is unclear who is supposed to be identifying desirable competencies and other hiring criteria, and who is supposed to be sourcing candidates, selecting finalists, and making offers. Robinson must take ownership of those processes at Loft and be formally accountable for their proper functioning.

Once Loft’s compensation is competitive and it has an efficient recruiting process, Robinson can focus on finding and hiring more talent. Given the slow bleed of personnel, my sense is that most of the morale problems are related to stress. A rising number of employees at Loft are probably doing two or three jobs—their own, plus those of workers who left.

To free up his staff to focus on recruiting, Robinson should either automate or outsource as much of the routine administrative work of the HR function as possible. As we’ve seen from the bonus-check snafu, when an HR-related administrative process functions as it should, no one notices; but when it breaks down, the HR department is blamed. Robinson needs to assess how much his staff can do at once while maintaining a high level of performance. If the burden seems too great, he should either reengineer the administrative processes or put them in the hands of outside specialists. For example, he could have employees deal directly with insurance carriers on claims resolution, put company forms on-line, push payroll activities back to the accounting group, and outsource COBRA and 401(k) administration to a third party.

Finally, Robinson must think objectively about how he can truly contribute to Loft’s strategy. It’s a safe bet that under the leadership of the firm’s last CEO, the strategy of the organization was implicit and driven by personality rather than explicit and actionable. The new CEO doesn’t seem to have done much to communicate a clear strategy or even strategic priorities. Robinson can—and should—sit down with the CEO and help him clarify the firm’s strategy; then, using the balanced scorecard or a similar methodology, he should translate that strategy into concrete initiatives with clear performance measures. Robinson can make himself the keeper of the strategic performance measures: no one else has stepped up to the plate. He can connect the key HR levers—recruiting, rewards, performance feedback, training and development, and communications—to those strategic initiatives in direct and powerful ways. His own staff should be measured and rewarded according to how much they contribute to the success of those initiatives. Robinson will then be spending his resources in ways that are undeniably visible and necessary.

Jim Wall is the national director of human resources for Deloitte and Touche in Wilton, Connecticut.

The bottom line is that Robinson should definitely stay at Loft. Why? Two reasons. First, he has a great opportunity to help its HR department grow into an important strategic role. In fact, there is already a good foundation for that growth. Shargall wouldn’t have hired him if he hadn’t seen the need. Second, businesses in general increasingly need their human resource specialists to operate at both administrative and strategic levels. Robinson is likely to face the same issues wherever he goes—so why not stay?

That’s not to say that he doesn’t face a difficult challenge—or that he hasn’t made any mistakes. But the situation isn’t as bad as it may seem.

What does Robinson need to do to get things on track? First, he needs to learn Loft’s business. How does the firm make money? What are its biggest challenges? Who are the primary competitors? All of Robinson’s input to date has been from an HR specialist’s point of view. Indeed, his presentation to the senior management team seems to have been developed without intimate knowledge of any other functions at Loft. To his credit, he has met with all the firm’s key players. But in a way, he has played out that old joke: “Okay, let’s talk about you. How do you feel about me?” If Robinson truly expects to work as an equal partner with the firm’s other strategic experts, he must be able to talk to them—at their level—about their areas of responsibility.

Robinson has played out that old joke: “Okay, let’s talk about you. How do you feel about me?”

Robinson must be able to talk to the firm’s other strategic experts—at their level—about their areas of responsibility.

Second, Robinson must begin to involve line managers from other departments in the development of his plans for Loft. Again, despite numerous one-on-one meetings, there is no evidence that any managers from other departments had a hand in developing Robinson’s action plans. I almost never tackle a problem unless I have line managers at my side helping me figure it out. If Robinson wants his recommendations to generate more than polite nods, he must ensure that each senior manager understands how those recommendations help his or her own position and department. The only way to do that is by involving them at the development stage.

Third, Robinson should learn more about the company’s former culture and the reasons people left the firm. He can’t take his cues from Shargall; the new CEO’s perspective is as limited as his own. Robinson should call people who have left the company and talk to them about their experiences. There is a lot of live data to be captured—data that could help Robinson slow the turnover rate and build a culture that would attract and motivate qualified people.

Fourth, Robinson needs to get the administrative duties of his department functioning smoothly. It doesn’t matter that the employee-relations fiasco happened before Robinson joined Loft. It doesn’t matter that the bonus-check mistake was a onetime error. The tarnished image exists, and if the basics aren’t handled properly, HR’s reputation will never shine the way Robinson wants it to.

Robinson seems to have joined Loft with the expectation that he would immediately be given a seat at the table. It just doesn’t happen that way. Although he has the support of the CEO, Shargall was brought in from the outside as well. He is still proving himself; his support can take Robinson only so far.

Finally, Robinson should reassess how he is managing his own direct reports. There is evidence that he has brought in some new talent. But there is no evidence that he has assembled a team. Robinson seems to think that he can take on the challenges of his job sequentially: first, influence the senior managers; second, motivate Loft’s employees; and third, create a unified group of HR experts who are known for their administrative and strategic prowess. He can’t. He must involve his own people while he involves managers from other departments and tries to improve morale and strengthen recruitment efforts. That’s the only way he can attain his goals.

In addition to the action plan I’ve just outlined, Robinson needs a heartfelt pep talk. His recent experience—whether or not a result of his own actions—seems to have eaten away at his confidence. So as Rose is advising him on the actions he should take, she should also be talking to him about the kind of impact he wants to have on Loft and about the legacy he someday wants to leave there. She should help him believe in himself again and rev up his enthusiasm. He’ll need both confidence and enthusiasm to go forward.

Wayne Brockbank is an associate professor at the University of Michigan School of Business in Ann Arbor. He specializes in the links between the competitive marketplace and human resource management.

Robinson knows that he has a problem, but he has yet to pin down the particulars. The first thing he needs to do is map out the complexities of the situation and the phases in which they must be addressed. In fact, Robinson faces three sets of challenges at Loft: one short-term, one I’ll call medium-term, and one long-term.

In the short-term, he must fix the basics. Robinson simply can’t allow glitches to occur in basic HR administrative operations such as the issuance of bonus checks. If he fails in the flawless delivery of transactional HR work, he will lack both the credibility and legitimacy he needs to champion more powerful HR agendas. A recent University of Michigan study that I directed has confirmed that personal credibility is a key factor in how people assess the competence of HR professionals. We found that 60% of personal credibility is a function of doing what you say you’ll do, such as meeting commitments and doing work that is free of errors. Robinson can’t afford additional transactional mistakes.

Robinson simply can’t allow more glitches in basic HR administrative operations.

It appears that Robinson has attempted to upgrade the quality of his department’s operational work through internal customer-service standards and performance guarantees. But it does not appear that he has been adequately involved in ensuring their accuracy and efficiency. Perhaps because Robinson has come from the world of consulting, his instincts may be trained toward the strategic rather than the tactical. But he can’t let himself be sidetracked to higher-level agendas until he gets the transactional side of HR work under control.

One of the ways he can get that control is to communicate the critical importance of error-free work to his direct reports. Robinson cannot afford to have people on his staff who would put the department in jeopardy by committing what I call the “intolerable oops.” He should immediately institute a total quality program for his department. And, to further reduce the risk of human error (because, after all, there is no such thing as a perfect human being), he should automate the basic systems and processes of HR as much as possible.

Make no mistake: the basics are tough. Some of the best HR professionals in the business have trouble getting that piece of the job right. But it has to be done.

Robinson’s medium-term challenge centers on hiring and retaining good talent. Although the case does not go into great detail on this point, let’s assume that some of the employees who left the company simply retired and that others moved on to different jobs. But the details of the individual cases may illuminate a more threatening problem. For example, if 65-year-old employees are leaving Loft for teaching positions, Robinson need not be unduly concerned. But if 47 year olds are leaving the company to “pursue other interests,” he has serious work to do.

If the latter is true, Robinson should recognize that keeping certain employees is going to be more important than keeping others. Companies create wealth for customers and shareholders at different stages of the value chain—through service, in marketing, in manufacturing, and so on. Robinson needs to identify the key individuals on whom the firm depends for its creation of wealth. He must keep the stars of the company happy and engaged. Of course, he doesn’t want other people to leave either, but at this juncture, he needs to focus his attention on the wealth creators.

Retaining high-quality employees is, without a doubt, an important and difficult issue. How does a company keep stars? The necessary but insufficient part of the answer is through salaries and benefits. If Robinson can’t compete on that level, he might as well throw in the towel. Going beyond compensation, companies today must ensure that people at all levels have the opportunity to face and conquer tough challenges. People need the authority to meet those challenges, as well as access to the information, training, and incentives that provide the motivation to take them on. In short, employees, especially the most talented Generation Xers, must be offered the opportunity to enhance their market value. Employee loyalty is rare these days; self-interest is the reality. Robinson should recognize that fact and play to it.

How does a company attract stars? It’s largely a matter of beating the bushes and finding the equivalent of the best talent. I say equivalent because it is extraordinarily difficult to get better people than those at your main competitor. If you get equally talented and qualified people, you’re doing fine. You can lose the business game by not hiring the right people. You win the game based on what you do with good people once you have them.

One more note on hiring: Businesses like Loft often rely heavily on the performance of a relatively small number of people. In such companies, line executives are almost always centrally involved in hiring decisions. If the CEO isn’t involved in the process, no worthy recruit is going to sign on. Robinson needs to ensure that Shargall embraces his own responsibility in the hiring process.

Having met the short-term and medium-term challenges, Robinson must then champion a powerful and strategically relevant HR agenda. If Robinson wants to be a partner at the strategy table, he needs to bring a thoughtfully conceived and high-value-added HR agenda to the management team. So far, he has not done so. There are substantial changes occurring in the financial services industry, but Robinson does not seem to be grappling with the challenge of what the firm needs on the human side of business strategy to succeed in an increasingly turbulent environment. He needs to be asking himself and the other senior managers, “What individual and collective capabilities do we need so that our people not only will be able to respond to the changes in our industry but also will be able to create the turbulence to which others must respond?” Only by tackling that question will Robinson and his colleagues make progress toward creating a company that develops people as a source of sustained competitive advantage.

Robinson does not seem to be grappling with the challenge of what the firm needs on the human side of business strategy.

Robinson has a full plate of challenges and tasks before him. But I would leave him with one final piece of advice: If he is to succeed in any and all of his endeavors, he must become more knowledgeable about the business he is now in. He needs to understand the nature of Loft’s external competition—including the changing demands of key customer groups and the changing requirements of financial markets—so that he can go forward with his action plans in a compelling, informed manner. And he needs to ensure that as he educates himself, he also educates the other members of his department. His HR team needs to be able to deliver on operational excellence, on the development and training of other Loft employees, and on conceptualizing and delivering an agenda for the human side of the business that will put Loft far ahead of the competition.

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