The Future Of Work: Rethinking HR
by Rowan Gibson
The unmistakable message from my books and speeches is that ‘Linear thinking is useless in a non-linear world.’ I contend that we are in the midst of one of biggest changes - if not the biggest change - in business and society in several hundred years - a significant moment in history that is redefining all our basic notions about work and organizations and careers. None of us can assume that the business practices of the last 20 years - including the traditional HR model - make any sense whatsoever compared to the next 20 years. Therefore, HR professionals need a new imperative: to radically rethink work and jobs and talent - and the fundamental role of HR - for a new business era.
Whether we like it or not, we are moving into a world of ‘more machines and less people’. The revolution that took place over the last 30-60 years in the blue collar world is now being unleashed on the white collar world of office workers and clerical jobs. Over the next two decades, sophisticated information and communication technologies - new high-tech software, artificial intelligence, expert systems, the Internet, mobile communications - will make large numbers of white collar jobs absolutely irrelevant.
Currently, white collar work is being increasingly outsourced or ‘offshored’ to lower wage economies - India, China, S.E. Asia, Africa, the list goes on. This trend will continue to decimate jobs in traditional Western economies. And these jobs are never coming back. Global outsourcing will continue until ‘no-wage’ microchips can do the job more efficiently and more effectively than ‘low-wage’ people. Eventually, it’s possible that computers may completely phase out mass employment.
In a world where we may soon be outsourcing or computerizing 75% to 90% of what an organization does, the remaining 10% to 25% - the core of company - becomes the crucially important part of any business. It’s the part that makes all the difference between one company and the next - the ‘human capital’ part that is so awesomely vital that it can’t possibly be computerized or outsourced.
This is why we see a shift in management focus: from the concept of ‘hired hands’ who are basically just tools a company uses to implement its strategy, to the concept of ‘hot talent’ - people who in fact are the company’s strategy. They are what make the company unique. Their brains and their skills represent the company’s only enduring basis for competitive advantage.
Thus, the issue becomes: how do we attract, organize, nurture and retain that core of talented people who are the company’s key to success and survival in the future? This issue moves Human Resources to center stage and demands a radically new role for the HR department - one that is far more strategic than ever before.
These days, the focus of competitive strategy is on building unique organizational capabilities. Companies are finding out that the only way they can win in the new economic era is by developing the kind of capabilities that meaningfully differentiate them from the rest. Capabilities that make them the fastest, or the most responsive, or the friendliest, or the most innovative, or the most flexible, or the most competent player in their field. How does a company build these kind of capabilities? By bringing together a unique mix of resources, processes and values that makes it hard for rivals to match what they do. And by reinventing the company from the customer backwards.
This has obvious implications for the role of a company’s HR department. Rather than busying themselves merely with policies, regulations, hiring and firing, employee comfort, compensation and generic training initiatives, HR professionals should be striving to build and strengthen the unique set of organizational capabilities that give the company its competitive advantage - that help it to serve its customers in a meaningfully differentiated way. This requires HR to shift from an employee focus to a strategic customer focus.
Many organizations are asking themselves the following questions:
Office design can act as a catalyst for accelerating organizational change by providing the conditions that make change possible. The office communicates to people about the values of the company. It sends out a strong cultural message. And what we see has a tremendous impact on what we do and how we do it. By changing the physical space, we are finding that we can influence and even change organizational behavior. And we can more easily tackle the kinds of cultural issues that most companies face:
For years, there has been a lot of talk about aligning HR plans and practices with corporate strategy. This sounds very logical and very easy to talk about, but it’s very hard to do in practice. What sounds simple in the boardroom can be very, very complex to implement across an organization, and it can have massive consequences for the way things are done on a day-to-day basis.
How can HR help every individual in the company to understand the link between his or her own job and the attainment of the company’s strategic goals? In most cases today, employee performance is still measured using an appraisal form which is based on generic criteria. What is needed is a more specific measure of individual achievement, based on criteria which are aligned with the firm’s overall strategic intent. How can HR go about providing such a measure?
What is obviously needed is some form of tool or mechanism. This has sparked renewed interest in initiatives like Performance Improvement (PI). The benefit of this approach is that it encourages an understanding of the organization as a system of interdependent functions and people. When used properly, Performance Improvement can help HR professionals and managers at all levels of the organization to assess and improve people’s individual capabilities in the context of their organization’s strategic performance needs. The metrics for performance improvement are therefore not whether some generic industry benchmark for quality or timeliness or productivity is being reached or surpassed, but whether the company’s strategic business model is actually being strengthened, and whether added value is being created for internal and external customers.
People don’t trust business institutions anymore. We all know there is no such thing as job security. Companies talk about their people as their most important assets and then they lay-off thousands of them in the latest cost-cutting exercise, or they outsource their jobs to low wage economies. On the other hand, do companies trust their employees? Look at the latest enterprise security software which creates a ‘big brother’ type of situation throughout the company.
Trouble is, where there is no trust, there is no commitment. People are far more skeptical today about committing their brains and their energies to the interests of the organization that employs them. Increasingly, they are entering much looser, more independent or interdependent relationships instead of traditional employment contracts. This helps many people to lead more balanced, liberated and autonomous lives compared with the industrial period. It also creates a win-win situation for the companies that hire them.
Jobs, therefore, are being radically reinvented in a new technology-enriched society. The emphasis has shifted from ‘jobs for life’ and ‘corporate slavery’ to short-term project work and team-based collaboration. Increasingly, a person’s skin color, age or gender have become irrelevant compared to the level of talent that they can bring to their job.
Is HR really up to the task of redefining jobs for a new age?
Rethinking HR is not optional. It’s imperative, and will clearly make the difference between companies who succeed in the twenty-first century and those who become footnotes in the history books.
This is a message that must be communicated to the HR community and to those in leadership positions. Most people still think of Human Resources as a stodgy old personnel department - and in many cases it still is. As David Ulrich, author of Human Resource Champions points out, many HR professionals find it hard to shake off this image (and this reality!) due to a kind of inferiority complex within the organization. They keep seeking respect (like a second class department) rather than acting as if they had respect. In this sense, HR continues to be its own worst enemy.
The time has come for business leaders and other executives to take HR seriously, and this can only happen if they become convinced that HR can really add value and deliver results in a new strategic role. By examining the future of work and the role of Human Resources in the 21st century organization, they can be helped to create a new mandate and a new agenda for rethinking their field.
Rowan Gibson is founder and chairman of a company which helps organisations to rethink core strategies, and author of the international bestseller Rethinking the Future.
Copyright Rowan Gibson. All Rights Reserved.
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