The HR Juggler

Do Reporting Lines Matter?

Posted on: February 5, 2012

Does it matter who your role reports to in the organisation? Just how important is it that an HR Director reports into the CEO? Lloyds Banking Group is a recent example of a company that has removed the direct report link between the Group HR Director and Chief Executive and, in their particular case, created a new Group Corporate Functions Director, which will manage HR, Legal and Audit amongst others. Clearly there are issues to be resolved within Lloyds Banking management team and banking generally, yet there are other examples too, such as Marks and Spencer.

So, does it really matter where HR reports to in an organisation? Well, no…and yes.

On the one hand, it seems incredibly outdated to look at thing in purely hierarchical terms; to derive status and importance from the reporting line of one’s function. Just because you report to the CEO does not necessarily mean that are good at your job, listened to, have any more influence or budget than anyone else in the organisation…far from it. For the most part, organisational changes are simply that; a way of reducing the sometimes huge numbers of direct reports that a CEO may have. One’s influence within a Company and ability to drive through change and excel at one’s job should in no way be determined or limited by one’s reporting line and there are lots of examples of people who do this brilliantly and apparently effortlessly, across a wide range of roles and functions.

And yet, whilst all the above is undoubtedly true, I retain a nagging element of scepticism about the value a CEO places on the role of HR, on how committed they are to truly working in partnership and involving HR in their organisational strategy, if they don’t have HR as part of their management team and as their direct report. About what kind of HR role that would be in reality, the emphasis that would be places on different aspects of the HR spectrum. I worry about the dilution of messages, of strategy, of priorities, the ability to effectively challenge and question…and I’m not convinced I would personally wish to work in that environment. 

What do you think? Have you had a different experience that proves me wrong? I’d love to know.

17 Responses to "Do Reporting Lines Matter?"

Alison,

I’ll be upfront, I don’t think reporting lines do matter. But I think strength of relationships do matter. The more senior you are in an organisation, the less important I think line reports are, but the relationship that you have with the CEO is important. If you are having to have your conversations through a line manager then, yes I think this is a problem. But if you have “face time” and a great relationship, then where you sit on an org chart doesn’t really matter at all.

I think you raise a great point and this is a great debate, but at the same time I think we need to be careful that we don’t see reporting lines as an allegory for the “seat at the table” conundrum.

Personally I would advise any HR pro to focus on the quality of their relationship not on where they sit on the org chart or whether they are at the board table. Focus on the relationships as the lead measure and the rest (the lag measures) will come in good time.

Neil

I agree with Neil – org charts are simply a representation of who should be connected to who, but the strength of that relationship is not indicated. I do however hope that we never reach the day when organisations have organograms with Klout scores on them – no work would get done! 🙂

Yes, it matters. Reporting to the big cheese means they have to listen to you. They don’t have to agree, but you have their ear once a fortnight or so. You can hear them direct, influence them direct and every time you act you do so with their implicit authority. Of course you’ll have authority of your own and of course you can have their ear without them signing your expenses but with anything in the hierarchy between you and them, your job is harder than it might be.

All organisations are political, and not necessarily in a bad way. Which politicians think that a role outside the cabinet is better than one in it? Which senior leaders would apply for a job reporting to anyone other than the boss?

No, none of it matters if the organisations are beautifully choreographed, ethically sound and have people at the top of their agenda. Oh, that rules out most of them then!

“management” and “reporting” are becoming outdated terms and concepts so in a way I’m with Neil – relationships matter. But, as we stand right now I don’t think it’s a good sign. Listen to the blarney put out by all the top thinkers and they will all say that HR has to do this and that at a senior level, including, rather topically, stand up and call out the organisation when things are going wrong. The capacity of being able to do this in an organisations as large as the major banks, where there is a “corporate services” layer between the HR lead and the CEO is very limited.

Sme people would like to think that in these cases, it’s simply down to individual influence, but that sort of thinking should be reserved for bedtime story time. I’m with Kevin here, face time counts and whether you like it or not, being behind the guy with the corp services badge instead of beside him/her matters.

I would argue that to a certain degree it matters to what kind of organisation are we talking about. For HR sitting in the boardroom only matters if people issues are being discussed and if they are then it really depends on whether people are in the centre of the organisation. If the rest of the management perceives human resources as resource easy replaceable, they will see talking to HR as a waste of time. If you end up in the organisation where this might be the case, I suggest the same as Neil, focus on quality of relationship as you can make a difference where you are right now. Eventually fruit of your work should be recognised higher up.
The skill of balancing business and social justice case is a skill no.1 for any HR professional. If you are good at it Organisation should listen to what you have to say hence your seat in the boardroom.

One more thing. I can’t imagine myself being CEO and not wanting to catch up with my Head of HR every now and then. #thatisall

Winding back to my days of working in a biiig company….

Reporting lines never stopped me giving honest and open feedback to the Group CEO and anyone else in between for that matter. Crafting a good reason for dialogue and positioning things with the goals of better service, better colleague and customer experience in mind can go a long way.

And yet I acknowledge that reporting lines and other structural crap can often calcify an organisation so it can be difficult for people to find the courage to speak up.

Proceed until apprehended versus Fear.

Thinking about this any more will cause my head to hurt, so I’ll leave it there.

I’m with Kevin on this one. Yes, it matters. It shouldn’t – but sometimes it does make a difference and could be quite critical for governance issues.

On a lighter note, working jointly with a former CEO/line manager, we used the “reporting line arrangement” as a tactical tool when required at board level.

Structure follows strategy and it’s the strategy behind org design that’s important. Shifting HR down a rung is an indication of how it, and therefore people, are perceived.

Reporting lines matter a huge amount. They may not be what you want them to be but they indicate a huge amount about the stated relationships within the organisation and the focus of the business. When done well, reporting lines even support business strategy!

Perhaps to Neil’s point, one aspect that worries me is the perceived need to have the ear of the CEO. If you don’t have the ear of the CEO’s division heads already then the sponsorship of the CEO might be useful but the underlying issue hasn’t been solved… If you already have the ear of the division heads then sponsorship of the CEO is just the icing on the cake.

Great comments – tiredness and touchscreen phone prevent me from adding too much…. Fine for “Corporate Services HR” to not report to CEO, but “Strategic HR” needs a direct channel.

Got me thinking again (when I was supposed to be involved organised showing off in the Alps).

So here’s a heresy. 

Strategic HR (which is what we are talking about) is the cost of failure and inadequacy in people. This is always with us, hence HR is perhaps the only job for life there is left!  Hmmm, apart from from communications, customer service, legal counsel, finance, procurement, security and I am sure a few others! 

Sounds pretty bleak that, but as a result, good HR also enables the constant change we face, about which we moan and without which we’d be bored. The perfect management team ought to be able to do this on their own. I have never met one and I never will.

I will add a paradox to my heresy. To effect a major change in culture, HR will form part of, and may therefore best be placed within, a team charged with doing just that. For such a team to be effective and be properly accountable for some seismic outcome, it may organise itself explicitly, perhaps through a COO.

I think of and value good HR people as coaches and challengers. People who make a leader of me, make themselves redundant by passing on what they know, courageously and continuously, safe in the knowledge that there’s always another loon in the corporate primordial soup, and that the one just encouraged onto land will likely sneak back as soon as you turn back anyway.

So, placement of HR  or any other function in a team charged with something big might well be the right thing, at least for a period, until we get fat and lazy again, have little to actually do and seek status over effectiveness and demand a comfy chair for our LinkedIn profile photo.

In the meantime, you can still talk to whoever you want to and walk through whichever doors you like anyway.

Saying all that, in this case I am working on the naive assumption that said bank really wants to change how it gets things done.

As ever, thought provoking stuff.

In a beautiful co incidence, we were today discussing, very positively, the purpose of HR. I tabled the comment I made here (actually the blog ended up on a screen in a meeting !), it was agreed that it rather fitted the bill, my opening clanging typo aside, that is 🙂

I too am with Kevin on this. Organisations are hierarchical. We might not want them to be but they are. Relationships are important but, if you are not close to the power base in the hierarchy, you need to work a hell of a lot harder at building and maintaining your relationships.

It is also naive to believe that the organisation chart can be separated from the people on it. Yes, good org design might say that number of direct reports to the CEO should be reduced. But, in my experience, if the CEO wants someone in the inner circle, the org design will be frigged modified to ensure that person has a place among the direct reports. That’s true whether that person is the CFO or that ‘special advisor’ with a job that no-one quite understands.

I have no knowledge about what is going on at Lloyds but, on the face of it, if I were the HRD there, being bumped down the hierarchy would worry me.

I’ve just seen this post again based on Rick’s tweet and comment. I was at an event last night with some of the HRDs from the biggest companies in the UK and the world. They all sounded a bit like Rick and Kevin. My conclusion, “80s people, working for 80s businesses looking at 80s solutions” I was expecting shoulder pads and perms to appear any minute….and that was on the men present.

Quite frankly, depressing, regressive nonsense.

[…] Do Reporting Lines Matter? […]

Some thoughts…
reporting lines do matter and at every level…if not you have the possibility of increasing activity and not productivity. before you strike me out as quoting nonsense, lets look at how the best in the world achieve and none better than the examples of actions speaking louder than words
Alexander : Better to hav an army of sheep led by lions or a army of lions led by sheep…..rest is history

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