So we decided to investigate using our 3Peak Functional Human-Systems Method®.

To untie the knot. Here is what we found:

Human Resources was invented by two brothers, John and Frank, in their company National Cash Register Co. (NCR).

Frank and John first created the 💜 Welfare Department to take care of the people, a truly pioneering and visionary approach for the 1880s.

While John received virtually all the credit for NCR, we believe that his brother Frank (who is almost completely forgotten) was also responsible for many of the innovations that drove NCR’s success. Based on our method, we believe Frank drove much of the 💡 inspiration for the Welfare Department.

In 1901, the father of industrial welfare, Frank, died at an early age. John continued on with the business.

That same year, as unions grew, John created the Personnel Department to 🚫 crack down on the labor movement.

Eventually, John merged the two functions together by asking Personnel to manage Welfare.

Today we call this configuration Human Resources.

John was brilliant in his own right. He created the template for the modern corporation. He hired, trained and fired almost 20% of ALL❗U.S. business executives between 1910 – 1930. He brought many vital and needed functions into the working world (including training and welfare). And he built a company that is still around today… and makes billions!

But we believe he made a mistake when he asked the Personnel Department to manage the Welfare Department. This decision mixed-up incentives and disrespected the internal hierarchy of the company. Chronologically, the Welfare Department came first, the Personnel Department second. (Like asking a younger sibling to babysit the older one!). By creating a hierarchical relationship between the two functions, John set in motion the tensions that we feel today.

We also believe that Frank made his own error. Rather than focus on the overall vision of the company, he created Welfare as an independent unit. This unit was more focused on what was good for individuals then what was right for the company. He essentially treated Welfare like a pet project, and over time, it was more loyal to Frank than NCR.

After Frank’s death, John didn’t hire someone to take his place. Instead, the Personnel Department took over the work.

When other companies copied the NCR model...

This organizational DNA was spread across the entire U.S. economy.

What might have made sense for NCR, would soon be “the way” for all companies, regardless if it worked or not.

This DNA is still a part of almost every company today!

By understanding the DNA, we now have a choice before us… What do we do with HR?