HR’s path to a bright future

‘Evolutionary HR management’ about customization, says professor
By Amanda Silliker
|Canadian HR Reporter|Last Updated: 10/03/2013

The future of HR: Luca Solari, professor of human resources management at the University of Milan, spoke at a Strategic Capability Network (SCNetwork) event about how the HR function will be evolving through 2020 and beyond. For more information, visit www.scnetwork.ca.

Maintaining status quo inadequate strategy (Leadership In Action)

Ecology the better option (Organizational Effectiveness)

Out-of-the-box HR (Strategic Capability)

There are two big eras in management. The first started in the early 1900s with the “founding of management.” This is where companies started to understand how to best divide people throughout an organization and use them in a way to help achieve organizational goals, according to Luca Solari, professor of organizational theory and human resources management at the University of Milan.

Since then, HR has gone through a lot of changes. The HR function has been divided into a variety of different roles such as a shared-service model, centre of expertise and business partner, and it has reached the “maximum point of standardizing its practice,” said Solari, speaking at a Strategic Capability Network (SCNetwork) event in Toronto in June.

The second big era of management will be “evolutionary human resources management” in the 2020s.

“It’s the move toward customization. We have to break out of this standardization and try to re-customize,” he said. “It’s easier to get there from the marketing side, but it’s not so easy to see how that might relate to what we should do with people within organizations. When (customization) is happening, how can HR not react to it but act upon that?”

Role of HR

In the second era of management, HR will move away from loosely coupled roles and take a more integrated, problem-solving approach, said Solari. While the shared-services approach can remain for routine activities, an aggregated, interdependent model will be needed for HR innovation and all practices related to development, he said.

“I don’t believe HR is a support function; I think now HR needs to move into being an inspiring function to management,” he said.

“There are a lot of things changing out there, new generations bring about new values and you need a function that’s able to capture that and help top management make sense of what’s going on.”

Tools, practices

The tools and practices employed by HR will also be undergoing many changes. Performance management will move away from the current system of setting and achieving fixed goals to a more conversational approach, he said.

“We need to embrace the idea that performance management is an ongoing conversation that is focused on the future and that is pushing people toward expressing new behaviours and new ways of obtaining goals for the organization.”

HR will move away from “talent framing” to “talent hunting.” Instead of trying to prescribe what talent should be, HR needs to discover what talent is out there, said Solari.

“Get out of the HR offices and see what’s going on. At the end of the day, it’s where we started from.”

Traditional training and development will be replaced by self-guided learning and discovery. Much like university students, top employees will learn on their own and then check in with their superiors to discuss what they are learning and make sure they aren’t missing anything, said Solari.

Job descriptions will be replaced by a “job laboratory.”

“There are so many new jobs being created, there are so many new ideas being had by people out there that we don’t know. We don’t know because we don’t go there, we don’t see the processes, we don’t work where things happen,” said Solari.

“We are missing out on a great chance to do something other companies cannot do.”

And succession planning will be replaced by “succession hiking” where employers help workers understand what kind of path they can go through by themselves, he said.

Competencies

HR needs to move away from the idea that the profession is about standardizing, controlling and defining procedures and instead embrace the culture of HR as a function to “discover what’s going on.” It needs to foster innovation at the workplace and stay abreast of new technology to ensure its organization is keeping up with the change, said Solari.

“There are so many companies where the powerful force of change is not coming from HR, it’s coming from marketing — people out there that are experiencing the new ways of relating to customers and are trying to bring those back into the company, clearly without the same competence HR has.”

This means HR professionals need to embrace their multidisciplinary abilities and hone their qualitative and quantitative analysis skills, said Solari.

“Unfortunately, most of the processes both within education and business schools, in the earlier stages of the development of HR professionals, don’t really capture those competencies. They are so much connected to the old way of dealing with HR processes.”

Ideology

In 2020 and beyond, HR will swap its “implicit behaviourism” ideology for “educated humanism,” said Solari. Implicit behaviourism is the belief we can exert such a powerful influence that we can change the behaviour of people — which is how companies operate today.

“If that were true, I wonder why we are paying for change management?” he said. “If it were true, we could just change our practices and everything would work smoothly.”

Educated humanism is an ideology that brings the human factor to the core — the human being becomes the centrepiece of our tools, said Solari.

“I’m talking about thinking (about) how the whole organization is built around a more mature model of how a human being reacts to our practices, and I think that’s going to be the biggest challenge in the coming years.”

Epistemology

Lastly, normative epistemology will move to collaborative management research. This means researching what’s going on at organizations and using all the available tools to figure out how to change organizational thinking, said Solari.

“There’s no secret formula out there, no magic wand, only the ability to understand what’s going on in our specific context at this specific time, and that requires a big change in the way we frame our role in HR.”

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SCNetwork’s panel of thought leaders brings decades of experience from the senior ranks of Canada’s business community. Their commentary puts HR management issues into context and looks at the practical implications of proposals and policies.

Maintaining status quo inadequate strategy (Leadership In Action)

By Trish Maguire

In today’s global world, where talent management is the greatest challenge, according to ongoing research by Ed Lawler and John Boudreau, HR’s strategic role continues to decline.

In listening to Luca Solari’s recent analysis, I wonder what or where was the tipping point that pressured HR leaders to marginalize their capacity and contribution?

When did HR leaders lose their strategic edge to be perceived as a business partner that supports business leaders with HR data and opinion as opposed to delivering an inspiring and leading edge strategic talent management focus?

The good news is Solari presents a new opportunity and vision for HR leaders with his premise that three new values are emerging with generation Y in the workforce: freedom, collaboration and sense.

The word of caution from Solari, however, is if HR leaders persist in supporting both management and executive teams by delivering traditional HR policies and practices that promote stability, structure and status, the opportunity to initiate and lead strategic talent management decisions will continue to backslide.

This would more than likely result in many organizations failing to excel at securing the top talent needed to maximize their competitive advantage.

Should these new values materialize, the new possibility Solari subscribes for HR may well reverse its “strategic decline” and reposition the strategic role of HR.

Solari is encouraging HR to take the lead in cultivating a more fluid and agile workplace where freedom, collaboration and sense are essential values; a workplace where new behaviours, practices and processes are developed and implemented with the express purpose of cultivating greater interaction, mobility and meaning.

As a human resources leader, take a few minutes and think about how radically these three values could impact your culture. Assess how many HR policies and practices you might need to re- create to accelerate integrating the values with HR strategies.

The combined insights from Solari, Lawler and Boudreau indicate HR leaders need to reinstate their roles as fully fledged strategic business partners versus respected advice-givers. Maintaining the status quo is clearly an inadequate strategy.

If you truly believe an organization’s talent makes a strategic difference to the bottom line and delivers a competitive advantage, what will you need to change to reshape your business leaders’ awareness, thinking styles and decision-making models regarding expert talent management strategies?

Trish Maguire is a commentator for SCNetwork on leadership in action and founding principal of Synergyx Solutions in Nobleton, Ont., focused on high-potential leadership development coaching. She has held senior leadership roles in HR and organizational development in education, manufacturing and entrepreneurial organizations and can be reached at synergyx@sympatico.ca.

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Ecology the better option (Organizational Effectiveness)

By Barbara Kofman

There is almost always merit to systematically rethinking past assumptions and practices in order to clarify a function’s present and future value proposition.

According to Luca Solari, the time is now for HR to throw out old paradigms and figure out how it will adapt to the rapid changes taking place in society as a whole — the “context” in which it operates. Failing to do so will result in obsolescence.

To demonstrate the scope of the evolution required, Solari equated HR’s current state to the field of geology, arguing persuasively that emulating the field of ecology would be more in keeping with where HR should be directing its energy.

Digging more deeply makes this connection clearer. Geology is about the study of what the earth is composed of and the processes by which it undergoes change, whereas ecology focuses on the study of the interaction of people with their environment.

In order to survive and thrive, Solari is suggesting HR go through a fundamental metamorphosis.

It should start by abandoning its long-time focus on organizational effectiveness through the application of traditional structural and change management practices, and moving to a more nimble role that embraces and leverages the dynamic nature of its relationship with the organization’s current and prospective employees and the internal and external environments in which they operate.

There are companies already putting these kinds of changes into practice. Google, for example, has successfully challenged conventional HR policies and procedures in order to attract and retain the best by abandoning and completely rethinking accepted performance appraisals systems — a step Solari also counselled.

HR could also take a page out of the way wholesale transformations have taken place within other functions. A few decades ago, this kind of sweeping, rational change was applied to the way managers prepared their annual budgets.

It was called zero-base budgeting and, as championed by Peter Pyhrr at Texas Instruments, eschewed the widespread convention of basing the following year’s budget on the previous year’s. Instead, managers were required to prepare their budgets without any point of reference, as if the last one didn’t exist.

This provided an opportunity to look more strategically at the way business was being conducted, to rethink what had “always been done” and hone in on what truly was needed.

This made it simpler for senior leaders to decide on the best allocation of scarce resources among competing priorities. Additionally, it forced them to re-evaluate and justify the purpose of their function within the organization and identify alternative ways of contributing.

While this practice is no longer widely used, it presents HR with one option for how it might go about reconsidering its mission and relationship to organizational goals in order to play the more forward-thinking and valued role Solari envisions.

Barbara Kofman is SCNetwork’s lead commentator on organizational effectiveness and founding principal of CareerTrails, a strategic coaching and HR solutions organization focused on enabling individuals and organizations to resolve their work-related challenges. She has held senior roles in resourcing, strategy and outplacement, and taught at the university and college level. She can be reached at (416) 708-2880 or bkofman@careertrails.com.

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Out-of-the-box HR (Strategic Capability)

By Karen Gorsline

Luca Solari described the evolution of people management and HR practices from the historical and current models of standardization to one of customization in the 2020s. Customization balances employee and organization needs for a combination of freedom with identity, collaboration with accountability, and meaning with recognition.

To illustrate how different HR’s thinking could be with an approach that supports customization, Luca Solari compared two different disciplines: geology and ecology. Geology focuses on stability, strata and structure while ecology focuses on dynamics, interaction and networks.

Taking an ecology approach allows HR to address the challenges faced by organizations in today’s complex global context. Literally, it allows HR to “get out of the box” and become a more relevant business partner.

While it sounds easy, the shift requires human resources to completely rethink how it operates. Here are some of the challenges HR will confront in this transformation:

• HR must continue to maintain specialized expertise while shifting emphasis to fully integrated solutions to problems. HR will be required to be more multidisciplinary and demonstrate the ability to undertake research and experimentation to discover innovative approaches to dynamic, interactive technical and social challenges.

HR will provide fact-based insights into the underlying nature of problems and suggest approaches to specifically address the dynamics. And HR will need to track the effectiveness of the chosen approach and adapt it as necessary.

• HR will need to shift from supporting management to challenging, enlightening and inspiring management, functioning as a true business partner and force for change.

• HR will need to move from trying to mold an environment where people behave in desired ways to one that recognizes that understanding humans and human nature can unleash human potential and business success.

• HR will need to understand that predetermined solutions using standard HR management tools and programs will not necessarily be appropriate. Off-the-shelf products and programs often fail to meet the specific needs of a business and social environment.

Instead, the focus shifts to identifying key people processes directly relevant to the business that can be customized for different employees. Processes will have to support business operations and also create an environment supportive of learning, discovery and conversations in recognition of the importance of interactions and networks.

All this involves risk — but there is an equal risk in failing to change. The potential reward for HR is that in 2020, it is no longer plagued by the feeling of being important or unappreciated. Instead, HR will come out of its box to contribute as a true business partner.

Karen Gorsline is SCNetwork’s lead commentator on strategic capability and leads HR Initiatives, a consulting practice focused on facilitation and tailored HR initiatives. Toronto-based, she has taught HR planning, held senior roles in strategy and policy, managed a large decentralized HR function and directed a small business. She can be reached at gorslin@pathcom.com.

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