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HR strategies that liberate minds, bodies and souls
We begin with a visit to the future:
Julie’s day in 2030 is different than it was in 2015. Each day is broken into thematic segments called mind, body and soul, work, family and leisure. The day begins with mind, body and soul then some family time before work begins. Work is broken into four 45-minute sessions with short physical breaks punctuating the day, then a longer period of leisure/family time. Julie’s working week is 20 hours long. Everyone agreed to work shorter hours in exchange for improvements to their lives in 2027.
HR can act as a huge enabler of a company culture that multiplies its collective intelligence or a massive obstacle to such things. All too often I have seen great companies disabled by bad HR, having sat in far too many meetings at HR institutes where such things have been discussed in terms of reputation management and so on but too little action has followed discussion. Yet, great HR is a transformational force for an enterprise that learns. What then can HR people bring to the table to encourage enterprise-level learnacy? How can HR encourage people to collaborate in areas outside their professional expertise or comfort zones? How can it embed such strategies and practices to create a culture of curiosity and collaboration within and outside the boundaries of the enterprise?
If you have not got several years to study an MSc in Strategic and Operational HR, here is the shorthand of HR Strategy and Practice, based on my tuition of one-year MBA SHRM programmes over many years.
HR strategy unplugged
A great HR strategy responds to the business strategy by encouraging beliefs, capabilities and behaviours that are consonant with that business strategy, while minimising or extinguishing those beliefs, capabilities and behaviours that are dissonant with the strategy. This is a ‘best-fit’ approach. It does this by the setting of a culture and structures that enable the enterprise to deliver. The underlying philosophy is that you can design culture rather than culture being the sum of the collective beliefs and values of the people. If you are to design culture into an enterprise, there will be a heavy emphasis on recruiting people with values that fit the desired culture rather than training people to fit in. Companies such as Virgin, Innocent Drinks and Metro Bank place great emphasis on recruiting the right people rather than trying to mould people to fit the culture and I concur that for every pound you spend on HR you are better off spending it on recruiting good people rather than trying to fix people that do not fit your company. However, the paradox here is that most innovative companies need some ‘misfits’ in order to maintain a certain level of ‘edginess’ in their business strategy. Nothing is black and white when we are talking about people. People are analogue misfits and to try to digitise them is to miss out on those things that make them both special and occasionally infuriating.
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Other enterprises are fond of adopting the ‘best-practice’ approach, simply bundling together those HR practices that have been shown consistently to be ‘good things’ and applying them to the enterprise. These include things like careful selection, good training and so on. Public sector organisations are quite fond of importing best practices in HR and there can be a case for doing so when adequate performance is sufficient to serve the enterprise’s needs. Often best practice is nothing more than ‘keeping up with the Joneses’ and, at best, it allows an enterprise to stay in the middle of its peers with respect to performance. A best-practice approach is generally less helpful when we need exceptional performance.
In both cases the HR relationship is usually one of service. In other words the HR strategy serves the business strategy. There can be arguments for a reversal of this order, especially in industries where people are the only source of advantage. This is essentially what academics call a ‘resource-based strategy’ or what I call working with the raw materials that you have to create your unique offering. Some charities are rather good at making the best of what they have as an HR strategy. In some cases it is their only choice.
Finally there is the question of designing the enterprise as one that learns continuously. It would seem that this is a staple element of any BBE’s HR strategy and practice and we have discussed this at length previously.
HR tactics unplugged
At an everyday level, HR operations are about an alignment of business and HR strategy with the so-called ‘HR Six Pack’, in other words Recruitment and selection, Assessment and appraisal, Reward and recognition, Training and development, Career management, Succession management. Alignment and integration are often discussed at great length, yet mathematically we are trying to achieve coherence between eight things. This is, of itself, a complex task, especially when you consider that these elements are about ultimately variable things, i.e. human beings. It is not, therefore, resolvable as a mathematical or cybernetic equation as some HR academics might suggest. At best we can hope to reach a sense of coherence and eliminate the worst contradictions of strategy and tactics.
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TABLE 12.1
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GROUND CONTROL
Balancing HR strategy
Consider the HR strategy for your enterprise for a moment.
Name one thing that would make people want to work harder for the enterprise.
What is stopping them doing this? What can you do about it?
Name one thing that is preventing people from working harder. What can you do about it?
HR strategy 2030
I engaged in a dialogue with Peter Cheese, the CEO of CIPD and a group of opinion formers: David D’Souza, Head of London; Warren Howlett, Head of HR Content and; Ruth Stuart, Head of Strategy Development to discuss some of the impacts of these questions on the way we run BBEs in 2030. Here is a summary of the rich dialogue that ensued.
The future’s already here. It’s just unevenly distributed.
William Gibson
The CIPD takes the fundamental view that work is not only a platform for a successful society, but also that work is a means through which people as individuals derive (and create) value and meaning, and make a wider contribution. Work is a part of being human and we must take time and care to shape that well. The employment relationship will be different as is the role of the HR professional in such a world. More than ever it is important for us to decide what we would like work to be like in 2030. In making such decisions, it is clear that the outcomes from work in a human and social sense have not always been good. We know from CIPD surveys that problems with wellbeing and mental health have been by-products of modern pressures from work. Inequalities in wages and opportunities have also grown. If we do not address these things then we will be in a worse place, as will our enterprises.
In 2014, 90% of US workers were doing jobs that already existed 100 years earlier. Some economists estimate that up to 47% of American workers could lose their jobs due to automation. The World Bank puts that number closer to 57% with particular emphasis on industrial robots affecting manufacturing jobs thus far, which might help to explain the disaffection of blue-collar workers in the Rust Belt of America who largely voted for Donald Trump as their saviour.
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In 2030, a hallmark of a great place to work will be the ability to navigate difficult (what we call VUCA or wicked) problems. Fons Trompenaars’ work on reconciliation is a useful starting point in this regard and this points towards the adoption of higher-level communication skills such as David Bohm’s idea of dialogue and Peter Senge’s concept of Systemic Thinking. In a world of work that has become more complex we need such things even more than ever.
CIPD are increasingly working across functions and disciplines to address the principles of what they call ‘Good Work’. More humanistic approaches to work are not new. The Victorians recognised that if you look after the people then the business looks after itself. Talking in a seminar, Tom Peters was also clear that if staff are looked after, shareholder interests are also served. It is encouraging that many more business leaders now also wish to discuss such things. Unlike the past where business leaders have expected HR professionals to prescribe rules, there is currently an active thirst to engage on these topics and discuss principles from which good work can evolve. As a result of this dialogue, CIPD have identified a set of professional principles for better work and working lives. HR professionals must lead by principles, which are also evidence-based and outcomes-driven, to deliver better workplaces. The skill of a great HR professional is helping people navigate the tensions and contradictions between these principles to come up with ones that best fit the context of a given enterprise.
Better decision-making will flow from a system-wide and economy-wide view. Good decisions combine inductive reasoning and deductive reasoning, in other words we don’t have bad decisions or decision avoidance, i.e. the wilful blindness approach. Better decisions will be characterised as: more balanced; more transparent; the ability to speak truth unto power and so on.
David D’Souza, Head of London, CIPD
All good HR strategies are tied to the ground by HR practices that reflect the broad vision down to the last small detail. In our next visit we examine what 21st-century recruitment might look like where people chemistry is determined by the body of evidence from our everyday behaviour through the application of big data.
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TABLE 12.2 CIPD professional principles for better work and working lives
HR practice 2030
I also visited The Chemistry Group, a leading edge recruitment firm who are inventing the future of HR practice, blending analytics, AI and automation with great HR skills, working in collaboration with the University of Cambridge to give them rigour and sustainability. Gareth Jones leads The Chemistry Lab, a disruptive business within the business, to invent Chemistry’s future organisation.
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In the past HR would attempt to glean information about your knowledge, skills and experience from quite crude tools such as an interview, a CV, an assessment centre and so on. All such techniques put the interviewer into what could be described as ‘clinical trial conditions’ and are therefore relatively poor predictors of the person’s overall job performance as they are effectively a ‘laboratory animal’. Gareth observed that we now have the potential to corral masses of big data across many fields, e.g. social media, face tracking and other tools, to produce a much more rounded picture of the individual, their behaviour across many situations and their habits. This increases the reliability and validity of the selection process many times over, as used by SAP, Telefonica, Diageo and so on. As he points out, “Every time you ask a question in an interview, you are leading the witness. It is better to study people’s everyday behaviour to see the whole person”.
The inspiration for the Chemistry Laboratory came from the world’s largest language and personality study. This suggested that a comprehensive scan of people’s social media activity would provide a personality profile as accurate as a 5 Factor Psychometric profile. It is rather like tapping into the world’s largest focus group on you. Chemistry studies five factors – Intellect; Values; Motivation; Behaviours; Experience – to build a rounded profile of a person. This is a much better approach to building a picture compared with some of the amateurs in the field. Experian are a case in point. I was astonished to find out that they rated someone I know as a high risk when he had been in business for 25 years, had no debt, no mortgage and had built his business on cash, yet another colleague was rated more highly when they had bankrupted their business in order to avoid paying debtors. Their defence was that they had just copied and pasted data from Companies House and therefore they were not responsible. I would agree with that, as reputations are made on good or bad data.
In conversation with Gareth, he explained the Chemistry’s purpose in setting up the lab was threefold: To prove the use of AI/big data in real experiments and not just in theory; to demystify the use of these technologies in the HR world; and to spin out a new business from it.
To do this we stack the data and look for connective patterns. We look for points of intersection within the data – if we have proved these points of intersection across large data sets, we can pick out correlations without having to go back through the big data search. This means that we are able to make much more accurate predictions about people without all the usual HR tools.
Science hangs its hat on causation whereas big data has legitimised the idea of correlation. We can see patterns if we stand right back and look across vast amounts of data. A good analogy is that if we stood in the Sahara we would say the world is flat and made of sand. If we viewed it from another planet, we would say it is round and we would see a number of land masses and so on.
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In practical terms, Chemistry is transforming the recruitment funnel so that it is filled with more of the right sort of people for a given position, making recruitment more satisfying for the individual and more efficient for the business. In Gareth’s words:
“If you pour sh*t in the top of the funnel, sh*t will come out.”
SAP have pioneered this by building the Company DNA into the personas, words, narratives etc. in their company branding and their recruitment funnel. Chemistry built SAP an app that integrates SAP’s brand DNA into their Facebook page, websites etc. so that the very first touch by a potential hire helps them to find a fit between themselves and the business. It does this by scraping the applicant’s social media profiles and then recommending particular job families within the company if appropriate. SAP wanted to give potential candidates a great initial experience by helping them to understand their potential while also helping to guide them into particular jobs at SAP if they fit the profile. Chemistry also developed a ‘serious game’ to help candidates find out aspects of their style.
The tools that Chemistry Lab are developing will be of wider application in helping people to understand their potential to switch careers as jobs are displaced. This will be tremendously important for people who do not understand their transferable talents in the age of machines. Gareth concluded by saying that there is no war for talent, but there is a war for achievement. We started this book by asking the VUCA question “What Do You Want from Life?” At Chemistry they now have the tools to help people get better answers to the question.
Human competences for 2030
Given the plasticity of the human mind, it is possible that humans have the capability and capacity to adapt to the challenges of an automated world. At the same time, we are creatures of habit and our active engagement will be needed to change the habits of a lifetime if we are to remain relevant in the age of machines. So, whether we adapt and survive or ossify and decline comes down to willpower more than ability. I have already indicated that emotional and spiritual intelligences will be in massive demand, perhaps more so than formal IQ. Intelligence will become the ability to use knowledge more than simply store it in our brains.
Frey and Osborne’s research indicates that cognitive automation or augmentation can replace almost any job without one or more of these characteristics:
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• perception and manipulation of things requiring high manual dexterity and discrimination between different objects in a complex environment, e.g. a hairdresser;
• creativity and originality, e.g. a classical musician; and
• social interaction/intelligence, e.g. social workers, primary school teachers, and mental health nurses.
In his book, The Fourth Industrial Revolution, Schwab describes examples of jobs most likely to be automated as telemarketers, bookkeepers, insurance assessors, referees, secretaries, hosts, estate agents, couriers and so on.
Frey and Osborne went on to say that jobs least likely to be automated are “generalist occupations requiring knowledge of human heuristics, and specialist occupations involving the development of novel ideas and artifacts”. Schwab’s list of jobs least likely to be automated includes specialist social workers, choreographers, physicians, psychologists, HR managers, computer systems analysts, anthropologists, marine engineers, sales managers, CEOs and so on.
So, what does that mean in terms of competences we will need in 2030? In a connected world, Schwab suggests we will need cognitive abilities, systemic thinking, complex problem solving, content skills, process skills, resource-management skills, technical skills and physical abilities. I asked thought leader and leadership consultant Jennifer Sertl for further comment on Schwab’s analysis. Jennifer is CEO of Agility 3R and Strategy Leadership and the Soul. She discusses 3R’s that are necessary for a connected world: Resilience; Responsiveness; and Reflection. Jennifer offers ten elements to mobilise your potential:
1. Our coopetive advantage is how quickly we learn. Knowing has lost traction. Our power is in velocity and depth. We are all students of the Fourth Industrial Revolution. This era asks us to build these skills.
2. Our coopetive advantage is the power of our peer community. There is a discernable value shift from organisational power to that of organised peer communities aka P2P Production.
3. Our coopetive advantage is how we participate within our teams. Google has spent a lot of time and research studying thriving teams, and their research points to Dr Deci’s Self Determination Theory. He suggests that these three attributes must be present for a person to thrive in a team:
• Competence: a belief that he/she is capable to contribute what is necessary
• Autonomy: a belief that he/she has freedom to make choices that impact the work
• Connectedness: a feeling of belonging
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We tend to overplay competency and autonomy in Western culture. However, feeling part of something bigger than oneself and a clear understanding of how one’s contribution supports the collective is something that algorithms have yet to find the magic sauce for. We are moving from an attention-based ecosystem to an intention-based platform.
4. Our coopetive advantage is how well we govern our work groups. In an era with so much collaboration and value centred work. It is important that we keep in circulation the wisdom of Nobel laureate Elinor Olstrom. People put a lot of time and effort into designing output. We need to invest more time in how we work, how we collaborate, how we build community. There is an art to governance and we need more capability here. Here are eight principles for managing work groups:
• Define clear group boundaries.
• Match rules governing use of common good to local needs and conditions.
• Ensure that those affected by the rules can participate in modifying the rules.
• Make sure the rule-making rights of community are respected by outside authorities.
• Develop a system, carried out by community members, for monitoring members’ behaviour.
• Use graduated sanctions for rule violators.
• Provide accessible, low-cost means for dispute resolution.
• Build responsibility for governing the common resource in nested tiers from the lowest level up to the entire interconnected system.
5. Our coopetive advantage is how well we leverage cognition. Ginni Rometty, CEO of IBM reminds us that machine learning is about the cooperation and coordination of smart individuals and smart machines. Human interaction in conjunction with technology enables insight. Data is data. What turns data into information is context. She says: “Ultimately your coopetive advantage is being cognitive. The advantage will go to those who will go and extract insights from the data we all talk about.”
6. Our coopetive advantage is being able to offer value beyond an algorithm. Scenario planning needs to strengthen as we see the horizon. We are adaptable and will continually learn new ways to create value. Denial is not a strategy.
7. Our coopetive advantage is how well we educate our youth. I am not talking about ‘inform’ and skill build. Let us go back to Latin ēducāre, to draw out.
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If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.
Antoine de Saint-Exupery
8. Our coopetive advantage is how well we share information.
9. Our coopetive advantage is the power of our questions. We keep inviting the categorical imperative as defined by Immanuel Kant. We inquire about belonging and ensure humanity transcends the gadgets.
10. Our coopetive advantage is equal to our curiosity. Intelligence is given too much credit. Innovation comes from either pain or hunger. Perhaps our greatest hunger is to experience life in a way that gives us goosebumps. Living with curiosity always finds the sunlight in darkness, the pathway in a trap, and the flaw in an algorithm. May we find our ‘awe’.
We further assert that organisations, every one of them, have their own soul, the internal, intangible yet extremely present and powerful set of inner beliefs that make the organisation one of a kind. We believe that recognition of this has immense value, and alignment of this ‘soul’ factor across customers, employees and business partners is a fundamental necessity for success. Following on from Jennifer’s work here, I assert that the notion of a collective soul is effectively the company culture. If your collective soul encourages intelligent action you have no need for the other HR devices such as tools and techniques.