Future of HR: The Transition to Performance Advisor

The Institute for Corporate Productivity (i4cp) has just released its latest report entitled “The Future of HR: The Transition to Performance Advisor”. This report combines the results of an i4cp survey of 384 business leaders, with interviews of more than 70 senior HR leaders of large organizations (i.e., GE, Kelly Services, Flextronics, T-Mobile, Adobe, Hyatt, Blue Cross etc.).

HR is an enigmatic profession, as the authors write, “the sad reality is—even in today’s enlightened age of recognizing the value of people to the business—too many top executives still view HR as a non-strategic cost center instead of a core, profit-contributing function.” HR Professionals need to act as performance advisors to the business, in order to become that core, profit contributing function.

HR Professionals estimate that they spend about 25% of their time on non-strategic activities, while non-HR respondents estimate that HR Professionals actually spend less than 10% of their time on strategic activities. This disparity is confirmed time and time again by researchers who study HR. Unfortunately, HR views itself as being more effective than it really is. This drives me crazy, and I think our entire profession needs to do a better job of evaluating the true effectiveness of our initiatives. We also should not be offended when operations leaders demand the details of the effectiveness of the initiatives we roll out.

I was intrigued by the discussion on generalists/business partners. Most HR Departments have developed a matrix HR Structure with Generalists (Advisors or Business Partners) mixed with Specialists (in Centers of Excellence, aka COEs). What gets confusing is when turf wars evolve between these areas, within the HR Department. Who trumps who? This report argues that the COEs must support/enable the business partners to do their work, and that the business partners are the most important part of the HR department. HR departments become dysfunctional when that “support” is confused with regulating the organization. Nothing is more frustrating to an Operations Manager than having to fight its own HR Department while trying to get something done.

Another common frustration with HR Departments is regarding metrics. Measuring the people side of the business is tough. That difficulty can’t be an excuse though, but HR must be careful it provides information to the organization, not just data. HR Professionals must be “data storytellers.” These HR metrics must not be solely for HR, they must be business metrics as well.

Based on its research, i4cp believes that the top competencies for future HR professionals include: strategic thinking, strategy execution, in-depth business knowledge, business acumen, strategy development, business ethics, organizational development, decision-making, team work, and technology / information systems. HR Professionals who develop these competencies will thrive in future organizations. HR Professionals who do not, will most likely (I would add will hopefully) be left behind and/or forced out of the profession.

Overall, this report is useful when combined with other recent publications by Dave Ulrich and various consulting firms on the state of HR. It especially dovetails well with Ulrich’s latest work, HR From the Outside-In. HR is an easy profession to poke fun at and criticize, and this report does not hold back in some of those criticisms. Thankfully, it doesn’t stop there, and it provides an invaluable discussion on the role of HR.

The report itself includes much more than what I cited here. I encourage you to read it and apply the challenges it outlines throughout. I suspect that if HR leaders really heeded its advice, the HR Profession would exponentially grow in influence in the next few years.

Note: You do need to be a member of the i4cp to download the entire report. I was provided with an advance copy of this report to review. I was not reimbursed for this review and have no direct affiliation with the authors or with the i4cp.

Book Review: HR from the Outside In (Dave Ulrich)

Could Dave Ulrich write a bad book if he tried? I don’t think he could, and Ulrich’s latest work keeps up his long trend of successful books that encapsulate the HR profession. HR from the Outside In: Six Competencies for the Future of Human Resources is Ulrich’s latest work (co-authored with Jon Younger, Wayne Brockbank and Mike Ulrich). This book summarizes the findings from Ulrich’s recent survey of HR Professionals. This survey is one of the largest surveys done worldwide, and Ulrich publishes the results every five years.

 

This book argues that HR has evolved in five “waves”:

  • HR Administration – Emphasis on the administrative and transactional work by HR.
  • HR Practices – Innovation in specialized areas of HR (i.e., compensation, recruitment, training).
  • HR Strategy – Integration of HR and business practices.
  • HR Outside-In – HR moves beyond strategy to align its work with business context and stakeholders

The last wave is extremely important to note, and HR Professionals who fail to change to this perspective will soon be left behind. It is simply not acceptable for an HR Professional to be content with processing transactions.

This book also argues that HR Professionals will require six competencies to thrive in today’s business world. These competencies include:

  • Strategic Positioner – This is much more than just “knowing” the business. HR Professionals must be able to position their organization to anticipate and match external implications and bolster their organization’s competitive advantage.
  • Credible Activist – HR Professionals must be internal activists, but they must focus their time and attention on issues that actually matter to the organization. They must be true professionals and be able to influence others and generate results in everything they do.
  • Capability Builder – HR Professionals must be able to align strategy, culture, practices and behavior; must create a meaningful work environment; and must must find and capitalize on all the organization’s capabilities.
  • Change Champion – Most corporate change efforts start with enthusiasm and end with cynicism. HR Professionals must help the organization counter that trend by helping it diagnose issues and learn from past failures.
  • HR Innovator and Integrator – HR Professionals must ensure the organization has the right talent and leadership for the current and future success of the organization.It must develop innovative HR practices that drive the talent agenda of the organization.
  • Technology Proponent – All organizations seem to have difficulty in handling and transferring the massive amounts of information they accumulate. This is especially true in HR, and HR Professionals must find ways to effectively use technology to understand and strengthen the talent within the organization.

I read this book shortly after it was released and found myself intrigued by the insights throughout it. The authors have the enviable ability to articulate what is on the minds of HR Professionals worldwide. They are not content to just complain about all the problems in HR. Rather, they challenge the profession to understand its value and aim as high as possible. That is exciting for someone like myself, who is still in the early stages of his HR career.

HR from the Outside-In includes a wealth of resources, case studies, and information that are too plentiful to mention here. In my opinion, it is the most valuable and insightful book on HR available, and it should be mandatory reading for every HR Professional, and aspiring HR Professional. I also think it is Dave Ulrich’s best work to date, which is no small accomplishment. If even a fraction of HR Professionals develop the six competencies listed above, the HR Profession has an extremely bright future ahead of it.

I purchased this copy myself and have no affiliation with the authors.

Ulrich, D., Younger, J., Brockbank, W. & Ulrich, M. (2012). HR from the outside-in: Six competencies for the future of human resources. Boston: McGraw Hill.

Leading HR: Combatting Pathological Tendencies

HR leaders have an essential role within organizations to combat the pathological tendency to pursue profit at all costs. Joel Bakan calls corporations “pathological institutions” that are dangerous possessors of great power over many people. By their very nature, corporations do not care for people; only profits. They care about people only when they contribute to profits. Bakan’s pessimistic assertion is probably correct, but it can be combatted or limited by bold HR leaders. Done effectively, this will paradoxically increase profits long-term.

Bakan’s views are poignant for HR leaders to understand and organizations desperately need HR leaders to be a voice of reason. Dave Ulrich advocates for HR leaders to be “credible activists”, where HR professionals are willing to take personal and professional risks that create value for the business. Are HR leaders willing to speak up with tangible facts and data when egos get in the way of the business? Where are these gutsy and credible HR leaders hiding? I asked one HR leader if he had advice for other HR leaders. He replied:

“It’s a great time to be in HR. It’s a time where industry is struggling for talent, especially in Alberta. My advice is to be bold and believe in the discipline. If you don’t believe in the discipline of HR, then get out of it, because chances are, you are not going to add value. You will continue to erode the perception that this profession has in the business community.”

HR is not a profession for the passive or timid. I get angry every time I hear an aspiring HR Professional say they want to get into HR because they “want to work with people.” HR requires boldness. Without that boldness, it adds no value. HR leadership requires “chutzpah” to speak against the grain when the organization needs the HR leaders to.

HR leaders have a wealth of information at their fingertips. They have information on hiring practices, demographics, benefit utilization, sick time usage, employee turnover and many other things. This information, if used effectively, can tell a story of individual departments and leaders. It can help identify departments and leaders that approach their employees with psychopathic tendencies, and help senior leaders deal with them accordingly. It can outline trends and propose solutions to combat those trends. Facts are one thing, but those facts must be weaved into tangible solutions that understand the context of the quest for profits corporations operate in.

HR leaders may not be able to fully prevent corporations’ psychopathic tendencies, but they can minimize their impact by having the credibility to speak up when organizations inevitably begin exercising their pathological tendencies. The long-term success of the organization may depend on them doing so effectively.

Bakan, J. (2008). The corporation: the pathological pursuit of profit and power. Toronto, ON: Penguin Group.

Ulrich, D., Younger, J., Brockbank, W. & Ulrich, M. (2012). HR from the outside in: Six competencies for the future of human resources. Boston: McGraw-Hill.

This post is an excerpt from my forthcoming book, “The Art of HR”. For my final Doctoral project, I researched how Top Employers provide effective HR services to their organizations. I compiled my results into this book. Please email me directly if you would like a copy.

The Evolution of HR

I have been reading a lot about HR lately, and am a bit perturbed by the negative perception of HR in management writings. Peter Drucker wrote that personnel administrators are preoccupied with “gimmicks” and consistently complain that they lack status. Drucker wrote that almost 60 years ago and many other authors have echoed his assertions in the decades since. Dave Ulrich edited a book a few years back that compiled essays on the future of HR. Just look at some of these essay titles:

  • “Does Human Resources have a future?” (Jeffrey Pfeffer)
  • “‘Don’t send me one of those typical human resource people’: A true life adventure story” (Harold Johnson)
  • “Judge me more by my future than by my past” (Dave Ulrich)
  • “Human resources in the future: An obstacle or a champion of globalization?” (Vladimir Pucik)
  • “Is the human resource function neglecting the employees?” (Bruce Ellig)

I would love to say all those titles are outdated, but I am not so sure they are. Has HR actually evolved in the past 15 years?

I think it has. We’ve seen rapid growth in HR being recognized as a legitimate profession over the past couple decades. We’ve seen some exceptional HR leaders be recognized as leaders (without the HR caveat). We’ve seen companies such as SouthWest Airlines flout the importance of their head of HR as being the second in command. We’ve seen legitimate research and journals emerge that study HR practices. I think we still have a ways to go as a profession, but at least we’re not being asked why we’re at the dance in the first place. Now if someone can just teach us how to dance, we’ll be ready to go.

Drucker, P. (1954). The practice of management. New York: Harper Row.

Ulrich, D., Losey, M.R. & Lake, G. (Eds). (1997). Tomorrow’s HR Management: 48 thought leaders call for change. New York: John Wiley & Sons.

Healthy Hierarchies

I’ve been reading through The Boundaryless Organization this week, and the chapter on hierarchies quite intrigued me. It’s so easy to criticize hierarchies and bureaucracies, but in that criticism, we fail to realize the obvious: hierarchies are inevitable. They will always exist in the absence of anarchy. Anarchy is only a temporary state anyways, as inevitably, a hierarchy will arise even amongst anarchists. Ashkensas et al (2002) devote a considerable amount of space to healthy hierarchies, and to “rewiring and retuning the hierarchy”. Their content is 8 years old now, but completely relevant to today. It is also a refreshing outlook on a complex topic.

Maybe it’s youth, but many young up and coming leaders (like myself) spend a lot of time despising hierarchies, rather than learning and studying them. We forget that they will always exist, and that there is possibly such thing as a healthy hierarchy. But what is a healthy hierarchy? Is three levels of management really healthier than sixteen? On paper maybe it is, but in actuality, a healthy and flexible hierarchy that helps the mission of the organization is better than an unhealthy “boundaryless” organization. No one wants to work in an organization where no decisions get made.

Ashkensas et al (2002) argue that a major myth about hierarchies is that delayering creates healthy hierarchies (p.52). It is easy for CEOs to promote “we’ve cut three layers of management this year” but forget that hierarchy is also a cultural mindset, not just boxes on an organization chart. It is complex to begin fixing an unhealthy hierarchy, but the solution is definitely not trying to eliminate it altogether.

Ashkensas, R., Ulrich, D. ,Jick, T. & Kerr, S. (2002). The boundaryless organization. San Francisco: Jossey-Bass.