Peter Drucker said, “The best way to predict the future is to create it.” HR leaders have an unprecedented opportunity to create the future of HR by understanding where we have been as a profession, identifying strengths and gaps, and taking high-priority actions to close the gaps. HR people must also develop a shared understanding about the evolving business context and environment in which HR and other business leaders operate—as well as the resulting required changes in work, the workforce, and the workplace.
Six Factors Changing the HR Landscape
There is a seemingly endless array of shifts taking place in where, how, and when
work gets done, and by whom. For purposes of this essay, let’s briefly address six such
factors to set the context.
1. Jobs are scarce as a result of the economic downturn that has gripped the global economy since 2008. Economists at the time predicted it would take five years for the economy to fully recover, but things have improved more slowly. This recovery has, in fact, been the slowest in history. But we are finally reaching the point where the economy is growing, jobs are being created at a steady pace, and unemployment is below 6 percent and dropping. Despite these improvements, we continue to face the dilemma that many of the jobs being created do not match the skill sets of available talent, and these people may therefore remain structurally and permanently unemployed or under-employed.
2. While globalization has been on the radar screen for a long time, only in recent
years has it become obvious that the majority of jobs, growth, and the math and
science skills required to do them are increasingly located outside the United
States. This shift is putting significant pressure on US companies that need to
find and keep talent.
3. From a technology standpoint, the internet is often credited with creating 2.6
jobs for every job it has destroyed. That’s the good news. The bad news is that
there is a complete disconnect between the technology-based jobs being created
and the skills possessed by many of those looking for work. This skills mismatch
is a fundamental source of tension in job markets around the world.
4. A scarce supply of talent inevitably leads to questions about workforce
engagement and the ability to attract and keep key people. Several engagement
studies suggest that 25 percent or more of high-potential employees are at
significant risk of leaving their current companies within the next year. This
challenge is becoming even more pronounced as the economy slowly but steadily
improves, thereby creating more opportunities and less anxiety related to the
risks of changing jobs and companies.
5. Likewise, the very nature of work and the definition of “employee” are also
rapidly evolving. Increasingly, people are looking for short-term, project-based
gigs rather than traditional long-term, full-time employment relationships. They
want to work where they want, when they want, on what they want, with whom
they want—and then move on to the next thing when they are ready, not when
the company is ready. Think about the challenges associated with employee
engagement when we are trying to engage people who are not employees by
traditional definitions.
6. In large measure, when it comes to the workforce demographics challenge,
demographics are destiny because the numbers are what they are. For example,
in the United States, 10,000 Baby Boomers will turn 65 every day for the next
19 years. That’s an aging population, and an aging workforce. Critical skills will
be leaving the workforce in droves, even if people are increasingly delaying their
retirement due to personal financial pressures.
The above external environmental factors provide a contextual backdrop for other
trends shaping the future of HR, including:
• Agile co-creativity and open innovation
• Analytics and big data
• Collective leadership
• Gamification
• Generational diversity
• Globalization
• Mass customization
• Personal technology
• Social media
• Sustainability
To learn more about these and other key trends, visit: http://www.sciencedirect.com/
science/article/pii/S0090261611000568.
Mass Customization: A Deeper Dive Example
For purposes of illustration, let’s consider the implications of just one of these trends—
mass customization. Mass customization at its core is a marketing concept that focuses on combining the mass production and delivery of products or services with specific
customization to individual consumers or consumer groups. At its most extreme, it
means creating and building each product or service to a specific customer’s set of
requirements while maintaining large-scale production and delivery.
Examples of mass customization include NikeiD, which allows consumers to design
their own sneakers with patterns and colors to fit their style; Chocomize, which
allows consumers to create their own gourmet chocolate bars by adding fruits, nuts,
and even sugared rose petals; and Pandora, which streams music to personalized
“radio stations” by learning listener preferences.
Mass customization in HR will include shifts from employment value
proposition to personal value proposition and from sameness to segmentation. Both concepts employ the use of marketing-related principles to solve people related
organizational challenges.
As consumers, people have learned to expect and value some choices within a reasonable range of alternatives. For example, when purchasing a new car, consumers have a choice of colors, interiors, electronics, and the ability to buy or lease.
The shift from sameness to segmentation is a related trend that continues to build
on the notion of using accepted marketing principles to address people issues. It
is probably the shift that makes HR leaders uncomfortable more than any other,
because it challenges our definition of fairness.
Fairness taken to extremes has evolved into sameness. We have equated fairness with
treating everyone the same because it is easy to explain and defend, both practically
and legally. In an environment of scarce resources, however, organizations can no
longer afford to peanut-butter-spread solutions and programs across all employees
in an effort to keep everyone happy.
As HR leaders, we must begin to shift our perspective from a focus on sameness to
an emphasis on segmentation. Rather than practices that ensure we treat everyone
the same, HR leaders will instead be called upon to segment talent, identify pivotal
roles and individuals, understand their unique needs, and fashion compelling ways
to attract, retain, develop, reward, and engage these key people.
The question we might ask ourselves as HR leaders is, “Can we reasonably expect
employees and potential employees to be satisfied with the same one-size-fits-all
HR practices and other elements of the employment value proposition, when they
are increasingly becoming beneficiaries of segmentation and mass customization
as consumers?”
Implications for Reaching Out Beyond HR
A survey that John W. Boudreau and I conducted a few years ago with more than 300 HR people from 11 different companies revealed four very enlightening things:
1. Some of the trends listed above have already arrived for most HR leaders.
Trends such as globalization, generational diversity, sustainability, and social
media are in evidence in daily work challenges and routines.
2. Other trends have not quite arrived but are increasingly being felt and talked
about, including personal technology, mass customization, open innovation, big
data, and gamification.
3. There is a significant gap between the role HR people are playing today regarding
these trends and the role they think they should be playing in the future.
4. HR people want to be equally involved in all the above future trends—as well as
many others—whether they have already arrived or are still emerging. We want
to be great at, and directly involved in, virtually everything.
These findings beg some questions. Is it possible or even desirable for HR leaders
to be equally knowledgeable about and personally prepared to contribute to each of
these trends on behalf of their organizations? Furthermore, can HR leaders expect
to master these trends fast enough to keep pace with their organization’s need to
address them?
I believe the answer is “no,” on all counts. It would not be possible for HR people
to become equally knowledgeable or prepared, nor could they address these things
simultaneously. It would not even be desirable for them to try. And, they could not
move fast enough to be personally relevant and savvy in all these areas.
We might eventually learn how to address many of the present or emerging trends
facing HR leaders. But we don’t need to. That is not our role or the best way to
approach the challenge. Our role is to lead, follow, or get out of the way—to reach out beyond the boundaries and traditional disciplines of HR to bring together expertise and capabilities from multiple functions. We don’t necessarily need to solve big hairy problem by ourselves, but we do need to ensure they are solved.
To learn more about how HR needs to lead, follow, or get out of the way, visit: http://www.talentmgt.com/authors/966-john-boudreau-and-ian-ziskin.
HR as Orchestra Conductor
Most challenges that organizations face today and will confront in the future are
large, complex, multidisciplinary, and cross-functional in nature—including the
issues mentioned in this essay. And, like the mass customization trend described
above, they imply the need for solutions that extend well beyond the traditional
boundaries of HR.
HR executives will therefore be challenged to reach out to other disciplines to deliver
an integrated set of solutions to complex organizational challenges. Think of HR as an orchestra conductor, bringing together a highly diverse set of people and capabilities to harmonize answers to these complex organizational issues.
The symphony orchestra conductor is not an expert at playing the violin, clarinet,
flute, trumpet, and timpani. Rather, he or she is adept at finding the very best
musicians who are expert at their respective instruments and bringing them together
to produce beautiful music. The differentiating leadership role is orchestration, not
universal expertise.
The orchestra conductor metaphor suggests a new role for emerging HR executives.
Bring together and partner with experts from a variety of disciplines such as
anthropology, communications, finance, law, marketing, project management,
statistics, and supply chain management. Reach out beyond the traditional boundaries
and comfort zones of HR. Orchestrate integrated solutions to multidisciplinary
problems.
It is probably impractical for us to start hiring a bunch of PhD anthropologists or
experts in customer intimacy into our HR organizations. And, we might be thinking
to ourselves, “Why would these non-HR people want to work in HR anyway?”
They may or may not want to work in HR, but they may be very interested in solving complex organizational challenges. We need to engage these experts on a part-time or full-time basis. Let’s bring them into HR, second them to HR for a specified period, or simply partner with them across boundaries. The willingness and ability to orchestrate business solutions to complex issues may indeed by the single most important factor that will differentiate the next generation of highly successful HR leaders from all the rest.
CEOs and other operating leaders don’t care where these integrated solutions come
from, or who leads them. They don’t care whether they fit neatly into the traditional
HR competency or operating models. All they care about are solutions and results. So,
why don’t we HR leaders take the lead in orchestrating these solutions? That’s what
organizational capability is all about. And, who better to deliver it than us?
Previously posted on HRCI Rise of HR