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Jack Welch was the CEO of General Electric from 1981 to 2001. Under his leadership the GE stock went up by 4,000 per cent, making it the most valuable company in the world. Fortune named him the ‘Manager of the Century’ in 1999

Suzy Welch is a former editor of Harvard Business Review. She is also the co-author of Jack Welch’s latest book Winning

You can e-mail Jack and Suzy Welch questions at winning@nytimes.com

(Please include your name, occupation, city and country)

If HR is the most powerful part of an organisation, as you always say, why is its impact only felt in a negative way?
— Fadi Rahal, Louisville, Ky.

At too many companies, unfortunately, the human resources department gets it wrong. Either it operates as a cloak-and-dagger society or a health-and-happiness sideshow. Those are extremes, of course, but if there is anything we have learned over the past five years of travelling, it is that HR rarely functions as HR should. That’s outrageous, made only more so by the fact that most business leaders aren’t scrambling to fix it.

Look, HR should be every company’s ‘killer app.’ What could possibly be more important than who gets hired, developed, promoted or moved out the door? After all, business is a game, and as with all games, the team who puts the best people on the field and gets them playing together, wins.

It’s that simple. You would never know that, though, to look at the companies today where the CFO reigns supreme and HR is relegated to the background. It just doesn’t make sense. If you owned the Real Madrid, for instance, would you hang around with the team accountant or the director of player personnel? Sure, the accountant can tell you the financials. But the director of player personnel knows what it takes to win: how good each player is and where to find strong recruits to fill talent gaps. That’s what HR should be all about. And, as you point out, it’s usually not.

That was never as painfully clear to us as it was several years ago when we spoke to 5,000 HR professionals in Mexico City. At one point, we asked the audience, “How many of you work at companies where the CEO gives HR a seat at the table equal to that of the CFO?” After an awkward silence, less than 50 people raised their hands. Awful! Since then, we have tried to understand why HR has become so marginalised, and as noted above, there are at least two poles of bad behaviour.

The cloak-and-dagger stuff occurs when HR managers become stealthy little kingmakers, making and breaking careers, sometimes not even at the CEO’s behest. These HR departments can indeed be powerful, but often in a detrimental way, prompting the best people to leave just to get away from the palace intrigue of it all.

Just as often, though, you get the other extreme: HR departments that plan picnics, put out the plant newsletter and generally drive everyone crazy by enforcing rules and regulations that appear to have no purpose other than to increase bureaucracy. They derive the little power they have by being the “You-can’t-do-that” police.

So how do leaders fix this mess? It all starts with the people they should be hiring to run HR: not kingmakers or cops but big-leaguers, people with real stature and credibility. In fact, they need to fill HR with a special kind of hybrid. What’s needed are people who are one part pastor, hearing all sins and complaints without recrimination, and one part parent, loving and nurturing, but giving it to you straight when you’re off track.

Pastor-parent types can rise through HR, but more often than not, they have run something during their careers, such as a factory or a function. They get the business – its inner workings, its history and tensions, the hidden hierarchies that exist in people’s minds. They are known to be relentlessly candid, even when the message is hard, and hold confidences tight. Indeed, with their insight and integrity, pastor-parents earn the trust of the organisation.

But pastor-parents don’t just sit around making people feel warm and fuzzy. They make the company better, first and foremost by overseeing a rigorous appraisal and evaluation system that lets every person in the organisation know where he or she stands, and monitoring that system with the same intensity usually applied to Sarbanes-Oxley compliance. Leaders should also make sure that HR fulfils two other roles.

It should create effective mechanisms, such as money, recognition and training, to motivate and retain people. And it should force organisations to face into their most charged relationships, such as those with unions, individuals who are no longer delivering results, or stars who are becoming problematic by, for instance, swelling instead of growing.

Now, given your negative experience with HR – and you are hardly alone – this kind of high-impact HR activity probably sounds like a pipe dream. But with most CEOs loudly proclaiming that people are their “biggest asset,” it shouldn’t be. It can’t be.

Leaders need to put their money where their mouths are and let HR do its real job: elevating people management to the same level of professionalism and integrity as financial management.

Since people are the whole game, what could be more important?

I run a small shop – just five employees. Lately, I’ve been thinking about sharing my financials with the team, hoping they’ll come to see why we need to be efficient every hour of every day and minimise absenteeism. I’m also hoping that ‘exposing’ our numbers could build teamwork and foster innovation. What’s your advice?
— Bob Winyard, Cherry Hill, N.J.

Surely you know the old saying, “No good deed goes unpunished.” Well, you might be saying it about yourself very soon. We don’t mean to disparage transparency. In general, the more information you share with employees about costs and other competitive challenges, the better.

It’s as you suggest – when people know what they’re up against, they can feel a greater sense of ownership and urgency, quite often sparking home-grown improvements in processes and productivity. And the sense that “we’re all in this together” can certainly jumpstart teamwork and innovation.

But there are real perils involved with opening the books, the main one being that it’s very hard to open them just a little bit. Once you start ‘exposing’ costs, to have them make sense, you also need to expose revenues and profits as well. The numbers are all relative, of course.

So, are you sure you’re comfortable with the team’s knowing how much the business makes? They will, naturally, compare that number to what they make, and eventually they will be able to extrapolate how much of the pie you have – and they don’t. That gap may very well be something you’re willing or even proud to explain. If so, then there’s probably no downside to sharing financial details with your team. But remember that every employee, no matter what size the company, has a personal pay scale in his head that estimates what he and every co-worker is worth due to output and performance.

If you get the sense that your information spree will upend those notions, then leave this particular deed undone for now and try to find other, perhaps less perilous ways to get your team to care about work the way you do.

I have just been hired in a leadership position at a new company. I am tempted to bring along some people from my old organisation; we work well together, and they have the skills. Your thoughts?
— Aakash Ganju, Bangalore, India

A tempting idea, but a tricky one. The answer is, in a phrase, it depends. If you’re running a company that requires a rapid turnaround in a changing environment, and you are saddled with an embedded culture of employees in a state of denial, you would be smart to bring along capable former colleagues you would trust in a foxhole. Together, you’ll get the work done faster and more smoothly, and with the camaraderie born of your shared experiences in the past, it will be a lot more fun too.

But as we said earlier, there is a tricky side to this too. If you’ve been hired to lead a relatively good business that mainly needs just a dose of reenergising, hiring several members of your old team can create a lot of mayhem for very little gain. Nothing is more demotivating to a funct-ioning organisation than a little imported cabal that regularly invokes, “This is how we did it at our old company.” In the worst-case scenario, this dynamic gives rise to a two-class society: the boss’s favoured insiders and the alienated has beens.

Bottom line: Survey the terrain. Bring in your old team only if you need fast change and resistors won’t budge. If you’re not in a crisis situation, search out the best among the team you’ve inherited and give them a new sense of purpose. You may miss your former colleagues, but you sure won’t miss the havoc they would cause.

After 61 years as a family business, our company was just sold to a US$250mn corporation. We will keep our name and operate as an independent business unit, and everyone will keep their jobs. In effect, everything is the same, but we know it’s not. How do I, as president, and my employees make the quickest and most appropriate adjustment to our new world?
— Bing J. Carbone, Bridgeport, Conn.

Congratulations and congratulations. The first for the deal itself – you and your top team probably did pretty well cashing out, and you should feel great about the financial rewards of building a company that the market loved.

The second congratulations is for realising that, although everything might look the same going forward, nothing will be. You’ve been acquired. You and your people now work for someone else. And even if that someone else likes you very much, it will have its own way of doing things. The human resources department will have a new way of appraising people. Finance will have a new way of formatting the numbers.

There will be new processes, policies and procedures galore. And so, to answer your question, the quickest and most appropriate way for you to adjust is: buy in. You don’t have to stifle yourself. But your energy about change should be positive and any criticisms constructive. No “but we used to...” and “it was better in the old days” moaning and groa-ning. Very bluntly, you gave that right away with the cashout. But if you want your people and organisation to thrive, as clearly you do, then your message has to be simple. The past is over; get with the new.