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Neil Roden

Berkeley Research Group LLC

Managing Director

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HR, is the search for relevance and meaning doomed?

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There is nothing the HR profession loves more than ‘the next big thing.’ The initiative, activity or idea that will finally give the function its desired relevance and meaning to the organisations they work in. Moving on to the new ‘big thing’ is also helpful of course given the fact that very often the ‘last big thing’ didn’t work or deliver the nirvana-like benefits claimed.

HR as a function is very fadish by nature. The positive side of this is openness to new ideas and thinking, the downside a butterfly-like approach to newness for its own sake and often a lack of relevance and connection to the businesses in which HR operates.

And one of the big things that apparently has HR professionals crawling over Wikipedia is neuroscience – the science of human behaviour which its advocates claim ‘gives us deeper insights on people and group behaviours.’

It was given a very high profile at last year’s CIPD conference. The caveat is that whilst this has had lots of press coverage, not many organisations are actually applying these techniques. This highlights an enduring problem for HR professionals. They often appear to be people with a solution looking for a problem. Not surprisingly this often leads to an immediate disconnect with line managers who funnily enough spend a lot of their time trying to deal with actual business problems.

How many times has this happened over the years?

Hundreds if not thousands and yet there does not seem to be much evidence of the 10,000 hours of learning practice helping HR learn not to make the same mistakes over and over again.

It’s highly likely and probable that neuroscience will go the same way as many other similar fads and in a couple of years we can all move on to the really ‘next big thing’. A report from the Boston Consulting Group (BCG) stated that only 33% of HR departments claimed to have the support of top management behind their projects.

HR as a function is very faddish by nature. 

It makes you wonder where these ideas and projects came from. I suspect not from actual line management and business concerns. The BCG finding is probably a good indicator of why HR struggles for relevance. And, if neuroscience is the thing we should be focussing on, not at all surprising.

A serious issue when we’re looking for credibility…

And yet there is a serious side to this as the HR profession struggles to attain credibility and meaning. I suspect most mangers would look slightly confused at a conversation around neuroscience given the issues they have to deal with.

And this leads straight into a major problem for HR – the problem of language. Most people in organisations – IT excepted – normally speak English yet in HR we seem determined to create a new language where recruitment becomes talent acquisition, induction changes to onboarding and workforce optimisation might be translated as productivity.

This highlights an enduring problem for HR professionals. They often appear to be people with a solution looking for a problem.

And let’s ‘frame’ this ‘in the box’. Language is important and the tendency for HR to speak in what’s become known as ‘HR speak’ reinforces the function as being ‘over there’ and not connected to the day-to-day problems that businesses and managers face.

Time to stop speaking on tongues?

What would actually help the credibility of HR is not speaking in tongues about behavioural psychology but fixing some of the things HR itself says its businesses want fixing – and this is where CEOs are happy to sponsor HR projects.

In 1997 McKinsey published its now (in)famous report on ‘The War For Talent’, a war that nearly 18 years later the HR function is no nearer winning. The top five challenges for HR in surveys every year include ‘talent management’ whether these surveys are from HR directors, CEOs or the multitude of HR consultancies.

Yet it would appear every year nothing greatly changes and the problem remains. If, however, you define talent management as having the the right people with the right skills in the right place at the right time then it is a fundamental organisational issue and should be core to what HR does. It is not an unreasonable suggestion to make that if this is such a strategic and important issue for companies then maybe it’s too important be left to HR who seem unable to fix it.

The ability of HR to actually fix real organisational issues is directly related to the way HR organises itself and the quality of the people it has.

Maybe strategic talent management should fall under the remit of the whole business ‘strategy?’

Can HR really fix organisational problems?

The ability of HR to actually fix real organisational issues is directly related to the way HR organises itself and the quality of the people it has.

The last 10 to 15 years have seen a plethora of ‘HR transformation’ programmes – some actually lasting 15 years (!) – that have generally failed to deliver, many in spectacular fashion. I suspect the amount of money wasted on these programmes is the GDP of a small country. These programmes are categorised externally as generally being over time, over budget and not delivering the benefits claimed. Guess which way credibility goes?

If you can’t change yourself how can you help change your organisation? A report from PwC [PDF] found that these HR change programmes failed because they focus on administrative process improvements, the people in charge lack the skills and accountability and the leadership in HR lacks the competencies to deliver on its vision. Damning to say the least.

Related to this has been the debate – also going on since 1997 – on the Ulrich Model and the introduction of HR Business Partners. HR does spend a lot of time talking to itself. In general, the introduction of Business Partners has failed. According to the CEB fewer than 20% of line managers rate HR as an effective partner. I think a better way to present this is that over 80% of line mangers don’t rate HR as an effective partner.

Ouch. After all these years? And no wonder. Simply changing someone’s job title but having them do the same things with the same processes and technology and, crucially, the same people isn’t really going to change anything. In this context it was inevitable that ‘HR reinvention’ was doomed to failure. But it did lead to dashed expectations that something was going to be different and credibility has declined as a result.

HR talks a lot about change management but is extremely poor in applying it to itself.

After Ulrich?

And ‘what’s after Ulrich?’ is a continual discussion in HR circles. How was Dave for you? ‘Well it was 1997 and it didn’t really work out but let’s keep hoping he has that next big thing.’ Despite all the books and articles not much from Ulrich or anyone else has really taken HR thinking much further forward this century. So, for example, an article by Ulrich in March this year stated that ‘The Future of HR is about Relationships‘. Well I never, that’s what its all about? No I don’t think so. The article also focussed on relationships within HR when the real issue is HR’s relationship with its businesses.

HR has also not helped itself – rightly or wrongly – by being the champions of some of the most hated and least effective processes in organisations.

Firstly, performance management. Managers don’t like it, employees don’t like it and there is no real evidence it actually drives performance but it does drive everybody crazy. The process. the forms, the ratings, the debates all contribute to this frenzy of activity that no one can demonstrate actually adds any thing of worth to anything. Not that many people try anyway.

Secondly, this feeds right into performance-related pay. This basically doesn’t work either. The evidence that it actually drives improved performance is scant at best and its negative impacts are fatefully ignored.

Fundamentally, we do not effectively measure job performance sufficiently to understand the input/output relationships which would then drive remuneration. The time, effort and resources expended however is huge with little real measured return.

Studies unhelpfully show that people’s view of fairness is a much bigger driver of performance in organisations than performance-driven remuneration.

Time to listen to line managers?

Finally, having had line managers rate people which they are not keen on, had them make pay decisions they don’t want to make, HR gets them to have a career management discussion which they really don’t want to have either. Line managers in general would prefer, if they had a choice, not to rate their people as poor or tell them their career has plateaued.

And of course some are just never going to be competent at doing so yet they are forced to.

Who would let a poor electrician knowingly rewire their house? Good people managers are a minority yet we are determined to get the majority to undertake tasks they just can’t or won’t do well. What is the point of that? Freeing HR and line managers from all of this would be a great first step.

This ‘one-size-fits-all’ approach is a big part of the problem. In an increasingly individual and digital world the HR mantra of consistency, fairness, precedent and standard processes looks increasingly out of place. If we are going to have 20 year olds and 70 year olds in the workplace then maybe we should recognise the differences between them and not drive uniform processes and practices across very different people. Yet I suspect the performance management, pay and career management processes will be exactly the same. Partly this is because it’s easier and partly because there is a lack of real thinking going on.

The opportunity to individualise the workplace applying mass customisation and marketing techniques is fantastic but its unlikely to happen on a wide scale. This is where confidence comes in.

Widespread lack of confidence

As many others have remarked over the years one of HR’s biggest issues is its lack of confidence and it is clearly a factor that holds HR back. However, as the last 15 years have shown it is a difficult thing to fix. How do you give all these HR professionals the confidence they lack, how long will it take, will it work and at what cost? Can you actually transform a function that isn’t confident into one that is?

Sounds like a job for a consultant….HR also has so little confidence in itself that it spends millions and millions of pounds with external consultants who actually often know less than HR does itself about its organisations and their issues. This use of consultants actually undermines both the confidence of the function and its credibility with the business.

It’s depressing the number of times you hear HR say that having a piece of work completed by a consultancy will give it a better chance of success or reassure top management it’s a good piece of work. Even though the HR function could have done it itself! It has come to this.

I suspect that many of the people who are attracted into HR are not attracted into it by numbers yet in organisations managers manage using numbers, data and information. HR is notoriously data and information light. The whole area of analytics, long heralded as part of HR’s future has never really taken hold in the function.

The transformation of HR into a marketing organisation may yet come to pass

Deloitte in a survey last year said that 86% of organisations do not have any HR analytics capability and this is the time of ‘big data’.

A report from Accenture argues that the digital revolution is set to radically disrupt HR predicting that many aspects of HR will become fully embedded in how work gets done throughout an organisation. The transformation of HR into a marketing organisation may yet come to pass.

But I suspect if HR does not step up to the data challenge it will simply be picked up by another part of the organisation. A huge own goal and it doesn’t fill you with confidence that HR can take advantage of the opportunities that its actually has before it.

A major reason behind this are the types of people who self-select themselves into HR in the first place. A survey in the US looking at what training HR professionals viewed as necessary and desirable for success in their careers found that employee relations, interpersonal skills and compensation were the top issues.

The bottom issues? Change management, strategic management and financial management. I guess in a way it’s obvious that HR people are interested in HR. If they were interested in general business management they would have chosen that route.

This is not universal but I think it does apply to the majority just as it applies to IT, for example. And I think it is a strong possibility that HR too will become a predominantly technical and expert function.

But frustrations are building. Ram Charan’s article in the Harvard Business Review last year suggesting the HR department should be split into two separate parts – with one HR ‘A ‘for Administration reporting to the finance function, the other HR ‘LO’  reporting to the CEO and focussing on leadership and capabilities – caused a stir in the HR community, or at least that part that reads the Harvard Business Review.

This is understandable but why did he write it? Because he says CEOs – and he meets lots – are frustrated with HR, as they have been for many years. There are always exceptions to this and they are that – exceptions. Allied to the point that HR transformation programmes have failed then you have a function that seems incapable of changing itself to meet the needs of its business.

Allied to the point that HR transformation programmes have failed then you have a function that seems incapable of changing itself to meet the needs of its business.

A report from KPMG in April this year stated that HR leaders are facing a crisis of credibility among their senior peers. Apparently, business leaders often failed to see the relevance of talent management, performance and reward practices to solving business needs. But they did want HR to be numerically proficient, to use analytics and provide human insight.

Interestingly, the response from some of those who commented on it were to state… well finance people like numbers and can’t deal with peopl so let’s retrain CEOs who see no benefit in HR and if executives can’t see the contribution HR can make then that’s their fault. I suspect that’s not going to be a winning strategy.

The time of crisis

In my view, HR is already in a crisis. This may not be a view shared by others but it is at least worthy of debate and consideration. The biggest critics of HR are funnily enough often senior HR leaders themselves but for various reason they tend not to be as vocal in public as they are in private.

They have as a group always been heavily under represented in the CIPD, for example, despite many attempts to engage with them. For them the influence of HR is declining and the quality of HR is not improving. Interestingly, this year’s Deloitte Human Capital Trends report stated that there had been little progress since the previous year in reinventing HR and that both HR and business leaders rated HR’s performance as low,

Business leaders performance score was 20% below that of HR and increasingly frustrated CEOs were appointing non-HR professionals, not CHRO positions. I think crisis is appropriate.

It’s hard to see anything thats radically going to change this as these trends have been visible for many years. Maybe I am underestimating neuroscience….

2 Responses

  1. Really interesting piece.
    Really interesting piece. Funny how many organisations have forgotten the open-door policy or see it as old-school. If you want a team to follow you then set a great example. Shouldn’t be more complicated than that, regardless of whether you work for a FTSE100 company or a groundbreaking charity.

  2. Hits the nail on the head.
    Hits the nail on the head. There are interesting insights coming from neuroscience. Unfortunately I expect these to be misinterpreted and turned into dogma. Pessimistic conclusion that the trends are not going to change, but hard to disagree.

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Neil Roden

Managing Director

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