Rethinking HRM in an era of rapid change and flux

Edward Erasmus MA University of Aruba

Organization, Governance and Management June 1, 2012

HRM Seminar New perspectives on Human Resource Management – Moving Aruba forward

What we will do in the next 30 minutes…

Have a conversation about key forces shaping the role of Human Resources (HR)

• Discuss some mega trends • How organizations adapt • Rethinking the role of HR • HRM challenges

A growing attention for the role of HRM in organizations…

Megatrends impacting organizations

Speed of innovation

Social movement

Sustainable enterprising

Hyper-connectivity

Complexity of Growth

Changing lifestyles

1. Speed of innovation

if you walk you stand still, so you’ll need to run pretty fast to advance just a little.

Disruptive innovation is going to dominate your daily schedule….

Disruptive innovation …….an improvement or advancement that enhances a product, service or a process in a manner that has never been expected by the market…..

• Good for consumers • Disruptive for existing industries (some will adapt, others will fade away)

Disruptive innovation

Disruptive innovation

Disruptive innovation

Disruptive innovation

Radical innovation…

The biggest fear by big companies in this innovation era is not to be able to recognize radical innovation and (timely) capitalize on it when it appears….

Radical innovation… are we catching up?

XX: “Doing business via the internet is leading to the death of many businesses in Aruba and consequently unemployment of many people?”

EE: “So what you do think businesses in Aruba should do?”

XX: “We should do something about that darn internet...”

Radical innovation… (Aruba example)

2. Technology and hyperconnectivity

Technology

Technology

Technology

Technology….

Techs and gadgets used at home will exceed level of technology being used at work and being taught at schools…

Telecommuting

• Increasing webification of applications • Cloud computing • Online storage • Remote access

3. SOCIAL MOVEMENT & CONSUMER-CONTROLLED MEDIA

You don’t control consumers… Consumers control you...

Thanks to social networking:

• Society is moving towards a more social, collaborative, interactive and responsive web

• Higher interconnectivity

• Building communities

SN gives people a powerful voice…..

From social media to social movement

Say goodbye to the era of

monologue

The new communication model is

dialogue

Social Networking has changed the ‘game’ in marketing and communication, but also how organizations need to respond to consumer needs….

Mass customization…. Co-creation… and co-branding…. take on new forms

Co-creation….

Starbucks gave consumers a voice....the result:

over 50,000 product ideas

• Forget B2C or B2B……

it’s now P2P (person-2-person) …customers want to connect and interact with

companies on a 1:1 social level …and those who can deliver that, will gain

substantial competitive edge...

The end of traditional marketing…

• Opportunities to engage with customers in a new ways….

• However, managing SM is posting new challenges for organizations

• Everyone is a marketer

4. THE COMPLEXITY OF GROWTH

“This is the end of easy growth” -Raghuram Rajan

‘Questioning growth is deemed to be the act of lunatics, idealists and revolutionaries. But question it we must.’ - Tim Jackson

Revenue growth will not be easy…

• Increasing cost control

• Upturn in productivity

“We are living on this planet as if we had another one to go to.” - Terri Swearingen

5. SUSTAINABLE ENTERPRISING

• Environmental resources are limited and are quite sensitive to everything that we do.

• We are starting to experience the effects of the actions of generations that came before us.

To make sure that future generations will not experience worse, we need to be aware of the ideals and requirements of sustainability….

Think sustainable….

Why adopting sustainability practices..?

• Without a sustainable society, there is no sustainable business….

• Not only sustaining the necessary environmental resources, but also the social resources, including employees, customers (the community), and corporate reputation

Sustainable enterprising

1. Incorporating principles of sustainability into each business decisions.

2. Supplying or consuming environmentally friendly products or services that replaces demand for non green products and/or services.

3. Greener than traditional competition. 4. Enduring commitment to environmental principles

in the business operations.

6. CHANGING LIFESTYLES AND SOCIAL VALUES

‘Gen Y is an “experience” culture. They do not want to be told what to like or what to do. They want to experience the world for themselves and pass their own judgment.’

- Bea Fields

Millennial (Generation Y)

Generation Y What they think of themselves:

“Brilliant, thought-provoking, eager, and exciting” What older generations think of them:

“Over-entitled, egotistical, know it-alls”

Fun - Fabulous Fortune - Fame

Juvenile crime Performance in

education Narcissistic

behavior Workforce challenges

Changing values…

If you think you’ve got everything under control….. Think again….

The main question is…

How can organizations remain competitive, be able to attract, organize, nurture and retain that core of talented people, in order to deliver value in a sustainable manner to a diverse group of demanding consumers?

How organizations are coping

• Create and embrace diversity in knowledge, people and resources.

• Focus on ‘creation’…not just ‘operation’. • Think in terms of value, ‘Win-Win’ and

long-term. • Embrace new forms of capital.

Reth

inki

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rgan

izatio

ns…

Organizations?.. • An organization is way more that just structure and

system...

• An organization is a series of conversations and dialogues between people, external or internal, in pursuit of solutions….

Sir, yes sir!

Hierarchy models

Matrix Organizations

Network-based structure

Totally new radical forms of organizations

Building organizations around values …and NOT the other way around

Creating value (Apple example) • Unparalleled stream of breakthrough products • Re-defined how people engage the world with

digital devices • Significant contribution to culture • High quality

Reth

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apita

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New forms of capital

Intellectual Capital

Social Capital

Creative Capital

Intellectual capital Collective knowledge (whether or not documented) of

the individuals in an organization or society. This knowledge can be used to produce wealth, multiply

output of physical assets, gain competitive advantage, and/or to enhance value of other types of capital.

IC can include: • skills and knowledge that a company has developed about how to

make its goods or services; • individual employees or groups of employees whose knowledge is

deemed critical to a company's continued success (knowledge about processes, customers, research results, and other information)

Social capital

= Social relations that have productive benefits.

People acting and interacting well in communities can create better solutions, greater accountability, and more economic growth.

“Social capital is about the value of social networks, bonding similar people and bridging between

diverse people, with norms of reciprocity.”

(Dekker and Uslaner, 2001)

Creative capital

People/societies exploring, embracing, and nurturing creativity.

Creativity -> Invention -> Innovation

human creativity is the ultimate economic resource

“…creativity will be the single most important leadership quality for organizations forging a path through the complexity of today’s marketplace, workplace, and community.” ~IBM Global CEO Study (2010)

Time to start educating our leaders in a new paradigm…

Time to start educating our future leaders in a new paradigm…

Reth

inki

ng H

RM

Back to pragmatism and contextualization

• No ‘one size fits all’ model • HRM should fit within the organizational

context • Strategic of nature • Value-driven

The Organizational Context for HRM

Organizational Context For HRM

Systems

People

Culture Structure

Processes

Size Resources

Changing role of HRM

• Strong HR leadership - develop clear visions, motivate others to join, and help them work toward achieving it.

• Acute future orientation - how changing environmental, organizational, and workforce factors will likely influence the business, and be prepared to deliver appropriate solutions.

• Flexibility and creativity - responsive to the changing needs of its client organization.

• Delivering value – from a non-revenue generating function to a value-creating activity.

Changing role of HRM

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.

Some new HR challenges

Social media policy – managing and monitoring what is being said about the company and how social media is used Millennials – how to motivate and meet the expectations of the millennial generation? Changing norms and values – re-evaluate existing policies or not?

Security and privacy issues –use of company smart phones, tablets (iPads) and other gadgets Team building vs. flexibility in the workplace – cloud computing and remote access Work-life blend –intertwined work and private lives, 24/7 on-call

Some new HR challenges

Managing the ageing workforce –managing ‘brain drain’, attracting new talent Continuous learning – learning as an ongoing activity, which is carried out daily and ad infinitum ??? - ……

Some new HR challenges

HRM: a macro/micro approach

• Preparing the Aruban workforce for the challenges ahead requires a holistic approach.

• NISP (Nos Aruba 2025), The Green Gateway, Chamber of Commerce, etc.

Title We see innovation as a means to:

• unlock talents of all of our people

• develop every area of the economy and, in particular, wherever high value added businesses can flourish and grow

• generate sustainable prosperity

“Transforming the (current) resources of our nation (Aruba) through the creativity of people into new resources and wealth.”

Our own definition of innovation…

So in essence….

• The global landscape is changing quickly. • These trends have an impact on Aruba as

well. • No ‘cook-book’ approach for organization

and HRM design (pragmatic and contextual). • The role of HR today is one that is far more

strategic than ever before. • New challenges are coming along. • Micro/macro approach.

Edward M. Erasmus, MA e.erasmus@fzanv.com erasmus.bpas@gmail.com Facebook: http://www.facebook.com/edwardmerasmus Twitter: http://www.twitter.com/em_erasmus LinkedIn: http://www.linkedin.com/in/edwardmerasmus Blog: http://edwardmerasmus.wordpress.com