Human Resources Conference for Legal Professionals

HR22: The Evolution of HR: Tips for

How We Must Continue to Grow

Presented by Richard Vosburgh, Ph.D.

10/6/2017

The handouts and presentations attached are copyright and trademark protected and provided for individual use only.

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The Evolution of HR:

Developing HR as an

Internal Consulting Organization

Richard M. Vosburgh, Ph.D.

President, RMV Solutions LLC &

Chairman of the Board, HRPS

rmvsolutionsllc@gmail.com

History of “Where HR Has Been”

Evolution of HR Accountabilities

HR As An Internal Consulting Organization

Content Areas for Internal Consulting

Continuum of HR Practice: Transactional to Transformational

Agenda

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HR Already Has a ReputationJune 2005: Why HR Gets No Respect (Business Week), Liz Ryanhttp://www.businessweek.com/careers/content/jun2005/ca2005051_7881_ca009.html

August 2005: Why We Hate HR (Fast Company), Keith Hammondshttp://www.fastcompany.com/magazine/97/open_hr.html

July 2016: It’s Time to Split HR (Harvard Business Review), Ram Charan

Dilbert Through the Years: Catbert, the Evil HR Director. Example:

It’s Not a New ReputationSeptember 1981: Big Hat, No Cattle: Managing Human Resources (Harvard Business Review), Wickham Skinner http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml;jsessionid=5FX4B2X0AJC1EAKRGWCB5VQBKE0YOISW?id=81512&referral=2340

“Why not blow the sucker up? I don't mean improve HR. Improvement's for wimps. I mean abolish it. Deep-six it. Rub it out; eliminate, toss, obliterate, nuke it; give it the old heave-ho, force it to walk the plank, turn it into road kill.”

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Defining “The Problem With HR”:Many Roles and Angles

The Profession: Art vs. ScienceFill in the BlankSales evolved into more strategic Marketing;

Accounting evolved into more strategic Finance; and

Human Resources evolved into more strategic __________1

1Boudreau, John W. and Ramstad, Peter M. (2006). Talentship and Human Resource Measurement and Analysis: From ROI to Strategic Organizational Change, Human Resource Planning, 29(1); and Boudreau, John W. and Ramstad, Peter M. (2007). Beyond HR: The New Science of Human Capital. Boston, MA: Harvard Business School Publishing Corporation.

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Influence: Boardroom vs. Department

In US companies, the CHRO reports to1: • The CEO (52%)• The COO (17%)• The CFO (13%)

Potentially leading to:• Inferiority complex• Seat at the Table whining• Outsourcing of HR

1CFO Research Services and Mercer Human Resource Consulting (2003). Human Capital Management: The CFO’s Perspective, February, 2003.

Two Different Kinds of Skills

Transactional Skill Set:• Administrative Skill Set• Efficiency• Scalable, Repeatable Processes• Executional Mindset• Data/Analytic Skills

Transformational Skill Set:• Internal Consulting Skills• Effectiveness• Flexibility and Change Management• Strategic Mindset• Interpersonal Skills

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Perception: Enforcer vs. Advocate

1HR as the “henchmen for the chief financial officer”; anda “dark bureaucratic force that blindly enforces nonsensical rules, resists creativity, and impedes constructive change.”

1August 2005: Why We Hate HR (Fast Company), Keith Hammonds

History of “Where HR Has Been”

Evolution of HR Accountabilities

HR As An Internal Consulting Organization

Content Areas for Internal Consulting

Continuum of HR Practice : Transactional to Transformational

Agenda Summary

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Decade Business Realities HR Name Changes Issues

Pre-1900 Small Business & Guilds Did not yet even exist Owners owned the HR issues

1900 Industrial Revolution Labor Relations People as interchangeable parts1920 Civil Service & post-WWI Industrial Relations Workers’ Rights and more formalized

processes1940 Scientific Management &

WWIIPersonnel Administration Efficiency experts and more highly

evolved HR processes1960 Civil Rights & Compliance Personnel Legal compliance and reporting; “policy

police”1980 Human Relations, the

Knowledge/Service Economy, and Mergers & Acquisitions

Human ResourcesPeople

Relevance in a fast changing world; motivation and “human relations” theories abound

2000 Modern Organizations Organization Effectiveness?Human Capital?Org Capability?

No new official names, but lots of “morphing” as the transactional parts get outsourced and the transformational parts get defined

2010 Global Economy and E-Enabled Technologies

TBD Still Evolving, focus on Talent; Capability; Culture; Consulting—Challenged to be an effective Internal

Consulting Organization

The Reactivity of HR in its Evolution

From HR Executive magazine; comparing all words in the first issue (1987) and the May 2017 issue. . .

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Four HR Roles1

1Ulrich, Dave (1997). Human Resource Champions. Boston, MA: Harvard Business School Press; and Ulrich, Dave and Brockbank, Wayne (2005). The HR Value Proposition. Boston, MA: Harvard Business School Press.

Four HR Roles and Sixteen Accountabilities

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HR Continues to Evolve

John Boudreau and Pete Ramstad (2006 & 2007), HR must:• Shift from a focus on the services that HR provides to the

decisions that HR informs and supports• Increase the success of the organization by improving

decisions that depend on or impact people• Seize the opportunity to become more of a decision

science that is focused more squarely on talent

And our Thought Leaders Know It

Boudreau, John W. and Ramstad, Peter M. (2006). Talentship and Human Resource Measurement and Analysis: From ROI to Strategic Organizational Change, Human Resource Planning, 29(1).Boudreau, John W. and Ramstad, Peter M. (2007). Beyond HR: The New Science of Human Capital. Boston, MA: Harvard Business School Publishing Corporation.

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EuropeMcKinsey research (Lawson, Mueller-Oerlinghausen & Shearn, 2005):

• European companies appear to be struggling to find human resources professionals with the right mix of skills to support business unit managers• There were problems with the inefficient and ineffective delivery of HR services• And deficits in the service focused skills in order to become a true partner of the business• To deliver on what the business needs, HR must put its own house in order, starting with the skills and capabilities of its staff

The Global Perspective is Similar

Lawler, Edward E., Boudreau, John W. and Mohrman, Susan (2006). Achieving Strategic Excellence, Palo Alto, CA: Stanford University Press.

China• HR historically was in a classic Personnel Administration role• That’s evolving quickly with fast growth enterprise• Less reliance on expats from formerly British countries (Singapore; Hong Kong)• Chinese Nationals proving to be quick learners on the free enterprise system

India• Exploded as the Back Office to the World• Selection and Training are key competencies• Expectations for movement/quicker smaller salary progression• Strong “British” business infrastructure to build on• Efficient, scalable, low cost transactional models

More on the Global Perspective

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cHReate Project: The Future

CHREATE, the Global Consortium to Reimagine HR, Employment Alternatives, Talent and the Enterprise, began in January 2014 under the leadership of John Boudreau and Ian Ziskin, with funding from HRPS, SHRM and others. Originally referred to as the Future of HR Project, this initiative began as a movement to advance the future of the HR profession faster. Grounded in the beliefs that CHREATE is open source, voluntary, inclusive, messy and agile, the initiative has grown to over 120 CHROs and other HR leaders. For more information about the CHREATE foundational values and beliefs, and the background of the initiative, please visit http://chreate.net/about/

cHReate Project: Forces of Change1. Exponential pattern of technological change Technological breakthroughs will force organizations to adapt and reinvent themselves more quickly. The workforce faces the risk of job loss and skill obsolescence, requiring them to adapt and reinvent themselves.2. Social and organizational reconfiguration The workforce’s increased autonomy and decision-making authority will make the workplace more power-balanced and less authoritative. The workplace will be structured more through social networks and less through hierarchy. Work relationships will be more project-based and less exclusively employment-based. 3. A truly connected world Information will be more abundant, richer and more available to everyone. Work will be accomplished from anywhere, creating a truly global talent ecosystem. Seamless global and real-time communication, will lead to faster product development. Go-to-market strategies will be more diverse, and have shorter product/strategy durations. Organizational reputation will become a pivotal currency.4. All inclusive, more diverse talent market Multiple generations will increasingly participate as workers, today’s minority segments will become majorities, older individuals will work longer, and work will be seamlessly distributed around the globe through 24/7 operations. Organizations that win will develop new employment contracts and hone new leadership styles and worker engagement approaches to address the varied cultural preferences.5. Human and machine collaboration Technological breakthroughs will produce exponential disruptions in markets and business. The rapid adoption of robots, autonomous vehicles, commoditized sensors, artificial intelligence, and global collaboration will renew the thinking about work.

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cHReate Project: Future Roles1. Trend Forecaster & Technology Integrator Strategic thought leadership—and the ability to anticipate and respond to trends—will be increasingly important. This includes a deep understanding of data and talent analytics to drive decisions, as well as the ability to effectively leverage technology to deliver value.

2. Global Talent Scout, Convener & Coach Given the changing workforce dynamics of an increasingly global, connected world, HR will find new ways to source, engage, and connect talent in more agile, diverse and effective ways.

3. Culture Architect & Community Activist There will be a shift away from legacy, company-centric world views and towards increasingly considering the ecosystem of all stakeholders—customers, suppliers, shareholders, ‘employees’ and the community at large. This requires companies to more actively engage this broad community while prioritizing the importance of culture and brand.

4. Organizational Performance Engineer Diverse forms of ‘employment’ and new ways of organizing and collaborating will challenge the traditional ways of working and require expertise in how organizations align, enable, inspire and reward people to accomplish shared goals and deliver results.

History of “Where HR Has Been”

Evolution of HR Accountabilities

HR As An Internal Consulting Organization

Content Areas for Internal Consulting

Continuum of HR Practice : Transactional to Transformational

Agenda Summary

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To develop the strategy, structure and skills

to evolve into an effective internal consulting organization

that addresses talentand strategic, change-oriented issues.

HR’s Challenge

The HR Effectiveness Pyramid: Developing HR as an Internal

Consulting Organization

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Internal Consulting is Consistent with What Boards & CEOs Expect of HR

“HR meets our needs when they”:• Drive change management• Have a human capital strategy that is integrated with business strategy• Partner with line management in developing business strategy• Make rigorous data-based decisions on human capital management

Lawler, Edward E. and Boudreau, John W. (2006). HR Support for Corporate Boards, Human Resource Planning, 29(1).

Internal Consulting is Consistent with What Boards & CEOs Expect of HR

On HR organizational design, Boards believe “HR meets our needs” when: • HR Service Teams represent Centers of Excellence that provide new organizational capabilities• IT Systems provide relevant data for meaningful decision making

On Metrics & Analytics, Boards believe “HR meets our needs” when they:• Identify where talent has the greatest potential for strategic impact• Make decisions and recommendations that reflect the competitive situation• Contribute to decisions about business strategy and human capital • Assess the feasibility of new business strategies

. . .all in the upper transformational part of the HR Pyramid.

Lawler, Edward E. and Boudreau, John W. (2006). HR Support for Corporate Boards, Human Resource Planning, 29(1).

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Internal Consulting SkillsUnderstand your internal client’s frame of reference:

• Background• Experiences• Personal biases• Thinking, communication and decision style preferences

Build empathy: • Pay attention to the emotion around the factual issues• Reflect back that you understand how important this is to them• Ask: “Tell me more about why you care so deeply about this issue?”

Distinguish yourself:• Provide key information to help solve a problem• Make him or her look good in front of management and peers• Bail them out of a tight spot• Demonstrate the willingness to invest in the relationship

Internal Consulting Skills3 Key Principles*

In every interaction:

1. Maintain or enhance self-esteem2. Listen and respond with empathy3. Ask for help in solving the problem

*DDI Interaction Management program from the 1980s.

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The HR Effectiveness Pyramid: Developing HR as an Internal

Consulting Organization

Processes & systems account for 18% of the impact of HR on business performance, and effectively using HR technology accounts for 5% of the impact

Ulrich & Brockbank (2005)

History of “Where HR Has Been”

Evolution of HR Accountabilities

HR As An Internal Consulting Organization

Content Areas for Internal Consulting

Continuum of HR Practice : Transactional to Transformational

Agenda Summary

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• HR Strategy: Aligned to Business Strategy• Talent: Right Seat on the Bus

• Organizational Capability: Delivering Business Results• Organizational Culture: Mirroring the Customer’s Value Proposition• Renewal: Growth and Development• Innovation: Creative, Continuous Improvement

Content Areas forInternal HR Consulting

1Ulrich, Dave and Brockbank, Wayne (2005). The HR Value Proposition. Boston, MA: Harvard Business School Press.

HR Strategy Aligned to Business Strategy

What accounts for the largest % of HR’s impact on business performance1?

• 43%: Contribution to business strategy• 11%: Business Knowledge

Example PepsiCo HR PlanningBusiness Issues HR Implications

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Peters, Thomas J. and Waterman, Robert H. In Search of Excellence, New York, NY: HarperCollins.

One Example:The McKinsey 7-S Model

Talent: Right Seat on the BusTo create “the talented organization”1: 1. Don’t try to identify the competencies required for each role. Instead identify the outcomes expected of each role.2. Don’t try to select people based on whether they possess the required competencies. Instead, identify the natural talents common to the best in each key role, and design interviewing systems to select people who possess similar talents to that best.3. Don’t measure each person on the required competencies. Instead measure each person on the required outcomes.4. Don’t identify which competencies each person lacks. Instead identify each person’s areas of talent and non-talent.5. Don’t encourage each person to improve in areas of non-talent. Instead, encourage each person to strengthen talents with skills and knowledge, and then find ways to manage around areas of non-talent.6. Don’t label each employee’s weaknesses as “areas for improvement.” Instead apply this label to areas of talent. A person’s greatest opportunities for improvement lie in talents, not in weaknesses.7.Don’t rate people next year on whether they improved on the required competencies – this is mere mimicry. Instead, rate people on whether they have improved on the required outcomes. This is real performance.

1Buckingham, Marcus and Vosburgh, Richard (2001). The 21st Century Human Resources Function: It’s the Talent, Stupid!, Human Resource Planning, 24(4): 17-23.

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People (1) eager to cooperate (2) across boundaries (3) with an igniting purpose:“You always know when you are in a Hot Spot. You feel energizedand vibrantly alive. Your brain is buzzing with ideas, and the peoplearound you share your joy and excitement. The energy is palpable, bright, shining. These are times when what you and others have always known becomes clearer, when adding value becomes more possible. Times when the ideas and insights from others miraculously combine with your own in a process of synthesis from which spring novelty, new ideas, and innovation. Times when you explore together what previously seemed opaque and distant. We can all remember being in Hot Spots, when working with other people was never more exciting and exhilarating and when you knew deep in your heart that what you were jointly achieving was important and purposeful.”

Gratton, Lynda (2007). Hot Spots. San Francisco, CA: Berrett-Koehler Publishers.

Talent: Right Seat on the Bus

How can HR better manage talent in an organization?Make it a priority but keep it simple. The CEO and senior leaders need to believe it, talk it and walk it.

Link talent to business strategies. Show the connection in multiple compelling ways.

Develop disciplined systems for assessment. Require leaders to know their people’s talents and conduct regular reviews (e.g. quarterly updates) as well as an annual deep dive.

Use the data. Integrate talent assessments and organizational needs back into internal search and/or recruitment; retention and motivation programs; professional and leadership development programs; performance management; and workforce planning.

Talent: Right Seat on the Bus

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History of “Where HR Has Been”

Evolution of HR Accountabilities

HR As An Internal Consulting Organization

Content Areas for Internal Consulting

Continuum of HR Practice: Transactional to Transformational

Agenda Summary

Transformational Innovation

Transactional Excellence

Continuum of HR Practice

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An HR Department of One

• Align HR’s goals with the company objectives• Keys to building credibility and influence • Overview of compliance, federal and state issues, and best practices• The strategic HR planning process• Training for organizational excellence • Prewritten forms, policies, and HR checklists

https://store.shrm.org/managing-an-hr-dept-of-1.html

www.shrm.org

Advancing the HR Profession

www.hrps.org

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Advancing the HR Profession

www.hrps.org

Advancing the HR Profession

www.hrps.org

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Advancing the HR Profession

www.hrps.org

Advancing the HR Profession

www.hrps.org

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Advancing the HR Profession

www.hrps.org

HRPS is focused on results at three levels:

The Individual…preparing you for personal and professional success.

The Organization…driving business effectiveness and results.

The Profession…advancing the practice and potential of HR.

HRPS Knowledge Areas

www.hrps.org

HR Strategy Enhancing the impact of HR: • Aligning business and HR strategy to maximize impact • Contributing to corporate governance and decision making • Creating purpose and meaning at work as a differentiator • Leveraging technology to improve productivity and enhance the employee experience • Leveraging talent analytics to forecast trends and drive decision making Leadership Development Impacting leadership skills and attitudes individually and collectively: • Acquiring, motivating and developing leaders • Planning for leadership succession • Providing effective organizational leadership • Inspiring collaboration for greater collective influence • Driving a culture of excellence Organizational Effectiveness Strengthening the organization’s effectiveness in achieving its intended outcomes: • Leading culture and organizational change • Optimizing organizational design and networks • Developing and managing intellectual capital • Ensuring organizational learning, agility and transformation • Valuing diversity and inclusion Talent Management Securing diverse talent to meet the needs of the organization: • Acquiring talent for competitive advantage • Developing retention strategies • Driving engagement • Fostering development • Leveraging various sources for talent

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HRPS Journal Themes

www.hrps.org

38.1 Winter 2015: Organizational Health and Wellness38.2 Spring 2015: HR’s Evolving Role with the Board38.3 Summer 2015: The Future of Work38.4 Fall 2015: Advancing the HR Profession

39.1 Winter 2016: HR’s Role in Enterprise Security39.2 Spring 2016: The Science Behind HR39.3 Summer 2016: The New Talent Ecosystem39.4 Fall 2016: Candor & Transparency

40.1 Winter 2017: Leadership Transitions40.2 Spring 2017: Transforming Organizations: The Role of Alignment40.3 Summer 2017: The Digital Evolution and HR40.4 Fall 2017: How HR & Marketing Can Grow Business Together

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