Look at it like this: when you asked someone how important IT was for strategy in the 80s, people would answer: “not at all.” But in this day and age, the CIO often has more to say about the business’ strategy than the CEO. The "I" in their title might have something to do with that, "Information". Knowledge is power, so they say. Well, that same shift is happening in HR right now: Once process engineers, now evolving to strategy enablers.
A Shift in Role for HR
Since every company has access to the same "cheap raw material” we call technology, it’s not your location, assets or processes that make the difference, but your people.
For example, let's say you have a firm that helps people invest their money. All of your competitors have the same kind of technology-enabled service that enables clients to follow-up on their investment within seconds. It gives them total transparency about your product formulas and minimises direct contact if they want to change their portfolio. In this scenario, there are only two ways to make the difference with your competitors.
First, you’ll need great employees on the front line that can give your clients the ease of mind they’re looking for when leaving their money somewhere. Second, by developing new technology & products that serve the changing needs of your customers at an unseen speed. So again, it’s the developers, UX designers, functional analysts... that will make the difference, not the fact that you bought a good piece of software. And it’s enabling those talented people to create true differentiating service/products that will move your HR into that new role.
There's a pressure for HR to show their value.
Traditionally HR was defined as a four-headed role: administrative expert, employee champion, strategic partner and change enabler. The emphasis used to be on the first two roles, but is moving towards the latter two in recent years. So be sure to catch up on these skills to be ready to be the HR manager of the future:
New Organisational Design and Fancy Models
The organisation of the future doesn’t look like a family tree anymore. It’s all about circles, squads, chapters, large scale Scrum or becoming teal. Whichever of the models your company will implement, the reason is generally to have a faster time-to-customer process when offering services or new products, or getting more done with less effort. Below we’ve listed some of the models that give an introduction.
By the way, the great opportunity here is that these models enable people to have more autonomy, work closer together in teams, apply fewer politics and use their strengths to deliver value (instead of a predefined set of competencies that matches their job description). And coincidentally, those are three things that increase happiness at the job.
The Business Acumen
If you want to prepare for the future, it is important to understand the present very well and that everything you do in HR has an added value for the business (even if they don’t see it themselves). From the company’s perspective, it is crucial that HR understands the particular company’s and sector’s challenges, so they don’t invent processes for the sake of inventing processes. From a personal perspective: when working in a more HR oriented role you will have more impact with a business background. If you want to coach and advise your line managers, it will ease your job if you can speak from experience.
Added tip: dive into some alternative business models and innovative companies, so you can help drive innovation as well. (Bright Shiny Objects And The Future Of HR, It's Time To Split HR, 27 Revenue Model Options Curated By Arne Van Balen)
Data Analytics to the Rescue
Because HR’s role is shifting to that of a profit centre, there’s more pressure for HR to show their value. Some companies and institutions are experimenting with the creation of accounting rules to capture the value of their social capital, but it doesn’t even need to be that formal. Using data to show that certain initiatives have an impact in the context of human beings has proven to be difficult, but more advanced technology and predictive algorithms are changing that. Google has shown for example that certain tests about initiative-taking are better predictors of job performance than good grades in ivy-league schools.
If we would like to execute our company’s strategy, the involvement of our employees is key. On a company level, we’ll have to change our organisation structure, our processes, culture, and leadership. We will design HR initiatives with their desired outcome. And we will measure our progress and impact. Do not forget to use your data analytical skills to measure your company’s progress on the implementation of the strategy.
Next to the change management on the company level, it is key to look at it from an employee’s perspective. So as HR we should be able to show our employees the interesting impact on their career and way of working. This will be key to drive a faster strategy adoption.
The classic role of HR as talent manager will stay crucial. First, we have to coach and advise our company’s leadership, so they are ready for a future-oriented management style. Second, we should define those people that have an impact on our organisation. They will be key to thrive our strategy. They have to be aware of their influential role, and you will have to coach them to increase their influence. Third, we have to make sure that every employee is aware of our strategy and their individual impact. You should know their skills and passion, their engagement and their involvement in the company. A powerful tool to get into the heads of the employees is creating an employee journey. It will offer you an interesting insight into your employees’ impact on the company. On top of that, you will be able to translate your strategic goals in a more individual and personal way to each of your employees.
Co-written together with An Brosens, HR Director at Tobania.