Some initiatives by HR, though difficult, can have significant results for business and enhance competitive advantage of a company
Moon shots are initiatives that are hard to do, but when done well will deliver incredible results. Human resource function has come to hold centre-stage in most organisations today. It is a long journey whereby human resource (HR) professionals moved from being picnic organisers to policy police to welfare watchdog to becoming business partners. Today businesses and corporations are valued on the basis of the intangibles that business analysts attribute over 65 per cent of the value to. Traditionally, intangibles like goodwill and brand have been key contributors to the enterprise value. Today, topping the list of intangibles that investors value are quality of talent, leadership bench, execution bias, agility and a culture of high performance and innovation. All these are in the domain of HR and so become the key contribution areas for HR professionals.
If HR professionals recognise that they are in the spotlight and their contributions determine competitiveness for their organisations, they need to worry about what next! Doing the same thing and expecting different results is often described as madness.
Competitive advantage for firms take different forms. In the past, organisations spent a fortune on such initiatives as total quality management, process re-engineering, blue ocean strategies, big hairy audacious goals, balanced scorecards, vitality or bell curves and the like. Implemented well, many of these initiatives provided measurable relief and results. But then, as with any management tools and techniques, these tend to become commoditised over time. Everyone has access to it and, therefore, continued implementation tends to offer more of a competitive parity than advantage.
It is in this context that HR professionals have a huge opportunity to create value and difficult-to-copy competitive advantage for their organisations. This value does not come from tweaking and tinkering with traditional HR systems, such as training and development, performance appraisal, workforce planning and compensation systems. Improvements here represent routine management of systems and not lasting competitive advantage.
We need real ‘moon shots’ that can deliver significant difference for our companies. The ones I have discussed in the article are illustrative in nature and not exhaustive. HR leaders driving the people agenda with the Chief Executive officer (CEO) and senior leadership team will do well to determine the moon shots as may be relevant for their business and industry.
Higher purpose for HR
Let us begin with the moon shot that helps the people function to shoot for a higher purpose than managing the life cycle of employees well — from recruitment to separation. Most of us are awfully tied with this for almost our entire career. With technology, bulk of this can be automated. Also, today HR has nothing to fear about outsourcing, unlike a decade ago. If I may take an aggressive stand, barring culture building, employee engagement, leadership development and building chosen intangibles, everything about HR can be outsourced — to the benefit of the HR professionals!. This requires a deeper commitment and articulation of a higher purpose to which the HR will devote its time. Determining this higher purpose will become the first and foremost moon shot for HR.
The moon shot here could as well be building a serious sense of urgency and bias for action as a capability across the organisation. There is enough evidence in public domain in the nature of research findings and thought leadership that the single biggest challenge for organisations to succeed in difficult times is lack of sense of urgency on the part of people at all levels.
The next moon shot that HR can focus on is doing periodical energy audit either across the entire organisation or in different teams and departments. In fact, I am of the view that energy audits are more beneficial than the engagement audits that organisations are investing in heavily today. All wisdom we have on employee engagement confirms that we can only engage one employee at a time! And, therefore, employee engagement becomes a daily task for the individual managers and should ideally move into their key result areas to be tracked.
On the other hand, what HR needs to focus on is the moon shot of energy audit. Given that the organisational energy can be high or low intensity on the one axis and positive or negative on another axis, HR will discover that either pockets of the organisation or a whole lot of them may suffer from “corrosive energy zones” (negative energy of high intensity). This leads to unproductive behaviour or an extreme even violent reaction as we have witnessed from time to time in many organisations across the industry, leading to strikes and lockout and loss of human lives in some cases.
When the energy audit reveals that the team, department or organisation as a whole suffer from “resignation” zone or “comfort” zone, there is a distinct danger of losing out to competition. Reminded of the ‘boiling frog syndrome’? That is what happens if this is not noticed in time and corrective actions are not initiated. HR is well placed to take a shot at this moon shot at regular intervals and help businesses avoid nasty surprises.
Democratising the firm
Well, this is easier said than done. You hear this in many CEO speeches and interviews and in many annual reports. Closer look at most organisations will show that we have not even inched ahead on this moon shot! Authority is still at the very top, middle management is relatively clueless and the work bees feel like victims! Decentralisation of authority is only for public consumption. “Letting go” seems to be the single-biggest challenge for senior managers. Leaders have not learnt to influence without positional authority. Managers have not given their teams autonomy. Sure enough there is only a thin line between paying attention to details and micro-managing. However, it is much more paying to let go and let people manage after defining the basic boundary conditions. Malcolm Gladwell, author Drive makes a very compelling case for ensuring “mastery”, “autonomy” and “purpose” for people of the present generation as the winning formula for bringing out their very best. His examples of organisations that have given high level of autonomy to people at grass-root levels and their stellar performance should be an eye-opener for today’s managers. Sadly, many HR leaders themselves do not subscribe to the idea of granting autonomy to grass roots. Lynda Gratton’s book Democratic Enterprise offers ample case studies of how organisations have attempted to provide meaningful autonomy to people at all levels and how such initiatives have catapulted these organisations to great glory and success!
Next moon shot is clearly a nerve-wrecking one for the uninitiated! I am asking to abolish performance appraisal systems especially where they have been reduced to a ritual and role of HR is “checking the box” for completion! Ask anyone in any random organisation and you will discover how fruitless the arguments around ratings are and the futility of feedback once a year. Instead what we need is a few broad goals that each department or function has to pick up that are aligned with the larger organisational goals. Ask everyone in the team to make commitments to further the goals in their sphere of activity.
This is the first half of the equation. The second and more important half is a clear decision and practice to make each other accountable. Team members make their bosses and peers accountable and bosses make their team members accountable. And something wonderful begins to happen. Productivity shoots up; excuses disappear; support structure evolves where necessary. For an average HR professional, where performance appraisal is the mother of all HR systems, this advice to throw the appraisal systems out the window must sound very absurd and idiotic! But then, their implementation in most organisations is no less idiotic and absurd if an honest introspection and inspection is ever done!
Focus on outliers
For many years now, HR scorecards are a bunch of key performance indicators that represent what I call the “satisfactory averages.” Measured against SLA’s, these are average hiring time, average hiring cost, average employee engagement score, average training evaluation ratings, average XYZ. There is so much comfort that we thrive on averages to prove our existence and contribution as HR. What matters in reality is “outliers” that hide important misses that count a lot. Remember what Aaron Levenstein from Baruch College said of statistics: “Statistics are like a bikini. What they reveal is interesting. But what they hide is vital!” What more needs to be said of averages that we all hide under.
My favourite question to anyone who presents to me averages to prove a point is: Well, if your head is in a cold storage and legs in a furnace, you should feel comfortable, on an average, is it not?” They get the message loud and clear. Learning to manage outliers without shame and working on them to contribute better is a moon shot for HR professionals! Again, not an easy one. When done, true value of HR can be achieved.
I have attempted to present just a few moon shots that can bring about significant results to the business and enhance competitive advantage for a long time. By definition, moon shots are difficult. After all, if it is easy, it is neither a moon shot nor any serious case needs to be made. Change is not easy but building competitive advantage in a turbulent environment demands nothing short of moon shots!
Warren Buffet was right when he said: “It is only when the tide runs out, we will know who has been swimming naked.”
(The author is an Executive Coach and HR Advisory.)