Paul Sparrow: We need HR for a horizontal world
Paul Sparrow, January 30, 2015
If HR wants to build and retain a reputation as a vital function then it must embrace horizontal management strategies and build cross-functional skills
In a recent blog for HR magazine, I argued that changes are taking place in ?the nature of professional knowledge that – unless HR begins to respond – will risk the core of the function becoming ?increasingly marginalised with only a secondary influence on strategic matters. The forces that might bring this about are already at play.
In this article I lay out the implications for HR and some of the responses that are now needed.
If the fate of HR is to become fragmented, this would ?be disastrous for the wisdom and quality of the organisation’s strategies, for its employees, its customers and society. Paradoxically, at the very time we are asking ourselves ‘do we need HR?’ (the title of the book written by myself, Martin Hird and Cary Cooper), we also know that people management and organisational behaviour issues have never been more central.
All of the major performance challenges – productivity, lean thinking, innovation, customer centricity, globalised capability – and all of the key enabling business logics, such as ‘big data’ and analytics or corporate social responsibility (CSR), are people-centric.
Beyond traditional functions
However, both the performance drivers and enablers are ‘horizontal’ problems and they sit above the traditional functions. They can only be properly understood and solved by cross-functional action, and need a focus both internally as well as connections to people beyond the organisation (such as partners, the supply chain and governments). In solving these problems we need to create new breeds of professionals educated and equipped with more holistic skillsets and networks.
I was recently at a conference where, in debating the lack of progress on CSR, representatives of global consulting firms were saying that despite significant investments, initiatives and pockets of activity, few firms had coherent strategies, and the activities remained narrow and not integrated across functions. Investments were inefficient, and this could not go on.
One of the chief executives (from a firm that shall remain nameless) responded by saying they were aware that their marketing spend on CSR had merely produced PR that few people felt was authentic, and they had ?re-directed their investment from marketing to product development and design. The idea: it is better to spend the money on researching the problems that lead to potential reputational issues, and find new and better solutions. In my view, this is a sensible response. And it signals what is happening, slowly, by default and not necessarily by design, inside organisations in response to all the performance drivers and enablers I mention above.
In pushing more resource into these important horizontal and non-functional activities, businesses will have to redistribute resources from one function to another, and from vertical functions into the new horizontal strategic units and activity streams. That is why the sub-title to our book is 'Repositioning People Management for Success'. The game is not over for HR.
Take each of the performance drivers I mention and consider their horizontal nature. Look at productivity – that growing menace that has to be solved if we are to break out of an increasingly ‘egg-timer shaped’ labour market and organisation design. To solve productivity issues we need co-ordinated investments at national and institutional level, coupled with changes inside organisations that combine technology, space and design, knowledge and people in new ways. It draws upon know-how from technology management, R&D, economics and organisation behaviour.
Innovation requires similar joined-up thinking, but also brings in strategy, business model, organisation design and work psychology. Lean management at its heart combines operations management with organisation behaviour. Customer centricity crosses marketing, consumer behaviour, organisation design and IT. There will be also be disciplines that will shout that I have forgotten their essential input to these challenges.
And there is the rub. What is the essential input that HR can provide to these issues? And even if it has the skillset to make such input, has it gained the credibility to have a voice? And do its delivery mechanisms and structure facilitate this voice?
A new HR structure
I don’t think HR is structured in the right way. I don’t think it is fair to ask those who are supposed to be its embedded business people – the HR business partners – to undertake these activities on top of the general people support they must offer. I am not convinced that they are cross-business enough anyway.
I don’t think our traditional centres of competence (or expertise), which are functionalised and siloed into issues like organisation development, talent and resourcing, engagement and so forth, are flexible enough to be parceled up and assigned to these horizontal business endeavours. Sucking business partners out into generic project teams risks these individuals becoming jacks-of-all-trades but masters of none. This leaves the poor HR director to carry the burden of making the strategic decisions about allocation of resources, across multiple calls on the function’s services.
A far better solution is to build and bring in small groups of new multi-skilled and cross-business educated professionals who can be attached to the performance drivers and enablers. I doubt that many HR functions have got the resources to develop new centres of excellence around areas like productivity and innovation.
Even if they did, the people in these units would need to be a shared resource, and their role, as far as the organisation is concerned, has to be impartial and horizontal. They might have to tell HR that its contribution was less important and resources would need to go elsewhere. They might be party to decisions that would re-invest in people management.
In short, in enabling new performance-linked expertise in the function, and ceding these people to strategic units that sit above the function, HR directors need to create ‘mini-mes’. HRDs will have to hope that these newly empowered strategic leaders will be able to fight their corner and persuade the other (less functional but also other-functional experts) to invest in the people aspects of the performance project.
The future for HR
Is this going to happen any time soon? Well, probably not. Organisational politics will undoubtedly slow down these developments, and what I have outlined above actually requires a shift away from the annual corporate planning rituals with their supporting functional strategies.
But will new horizontal management strategies and resource allocations come? Inevitably. HR has time to prepare. But if HR is to avoid a future of slowly losing its interesting projects to non-HR people, and reverting to a traditional and simplified personnel management role as it becomes leaner, it must act now.
HR needs to build up its cross-functional skills and expertise in performance drivers and enablers, it needs to ready the people who will fight its corner, and it needs to lay out a vision for the function that explains what the future will look like. It needs to move on from managing itself as a professional service, to managing itself as a centre of excellence that can punch above its weight.