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Should we do away with Hour? In recent years, a number of people who written report and write near business—forth with many who run businesses—take been debating that question. The contend arises out of serious and widespread doubts about HR'southward contribution to organizational functioning. And every bit much as I like HR people—I have been working in the field equally a researcher, professor, and consultant for twenty years—I must hold that in that location is good reason for HR's beleaguered reputation. It is often ineffective, incompetent, and costly; in a phrase, information technology is value sapping. Indeed, if HR were to remain configured every bit it is today in many companies, I would accept to reply the question above with a resounding "Yes—abolish the thing!"

But the truth is, HR has never been more than necessary. The competitive forces that managers face up today and will continue to face in the future need organizational excellence. The efforts to reach such excellence—through a focus on learning, quality, teamwork, and reengineering—are driven by the fashion organizations become things washed and how they treat their people. Those are fundamental Hr problems. To state it plainly: achieving organizational excellence must be the work of HR.

The question for senior managers, then, is not Should we practise away with 60 minutes? only What should we exercise with 60 minutes? The answer is: create an entirely new role and agenda for the field that focuses information technology not on traditional 60 minutes activities, such as staffing and bounty, but on outcomes. Hour should not exist defined by what it does but by what information technology delivers—results that enrich the organization's value to customers, investors, and employees.

More specifically, Hr can assistance evangelize organizational excellence in the following four ways:

  • Outset, HR should become a partner with senior and line managers in strategy execution, helping to move planning from the conference room to the marketplace.
  • Second, it should become an adept in the style piece of work is organized and executed, delivering administrative efficiency to ensure that costs are reduced while quality is maintained.
  • Tertiary, it should become a champion for employees, vigorously representing their concerns to senior management and at the aforementioned time working to increase employee contribution; that is, employees' commitment to the organisation and their power to deliver results.
  • And finally, HR should become an agent of continuous transformation, shaping processes and a culture that together meliorate an arrangement's capacity for alter.

Brand no fault: this new agenda for Hour is a radical difference from the condition quo. In about companies today, HR is sanctioned mainly to play policy police and regulatory watchdog. It handles the paperwork involved in hiring and firing, manages the bureaucratic aspects of benefits, and administers compensation decisions made by others. When it is more empowered by senior management, it might oversee recruiting, manage training and development programs, or pattern initiatives to increase workplace diversity. But the fact remains: the activities of 60 minutes announced to be—and frequently are—disconnected from the real work of the organization. The new agenda, even so, would hateful that every one of HR'due south activities would in some physical manner assistance the company amend serve its customers or otherwise increase shareholder value.

HR's activities appear to be—and often are—disconnected from the real piece of work of an organization.

Can HR transform itself lone? Absolutely non. In fact, the chief responsibility for transforming the function of HR belongs to the CEO and to every line manager who must achieve business goals. The reason? Line managers have ultimate responsibility for both the processes and the outcomes of the company. They are accountable to shareholders for creating economical value, to customers for creating product or service value, and to employees for creating workplace value. Information technology follows that they should lead the way in fully integrating 60 minutes into the company's real work. Indeed, to practise and then, they must get 60 minutes champions themselves. They must acknowledge that competitive success is a role of organizational excellence. More important, they must hold HR accountable for delivering it.

Of grade, the line should not impose the new agenda on the Hour staff. Rather, operating managers and HR managers must form a partnership to chop-chop and completely reconceive and reconfigure the function—to overhaul it from one devoted to activities to one committed to outcomes. The process will be different in every organization, simply the upshot volition be the same: a business concern era in which the question Should we do abroad with 60 minutes? will be considered utterly ridiculous.

Why HR Matters At present More Than Ever

Regardless of their manufacture, size, or location, companies today face five critical business challenges. Collectively, these challenges crave organizations to build new capabilities. Who is currently responsible for developing those capabilities? Anybody—and no ane. That vacuum is 60 minutes's opportunity to play a leadership role in enabling organizations to meet the following competitive challenges:

Globalization.

Gone are the days when companies created products at dwelling and shipped them abroad "as is." With the rapid expansion of global markets, managers are struggling to residue the paradoxical demand to think globally and act locally. That imperative requires them to move people, ideas, products, and information around the earth to come across local needs. They must add new and important ingredients to the mix when making strategy: volatile political situations, contentious global trade problems, fluctuating substitution rates, and unfamiliar cultures. They must exist more literate in the means of international customers, commerce, and competition than e'er earlier. In brusque, globalization requires that organizations increase their ability to learn and collaborate and to manage diversity, complexity, and ambiguity.

Profitability Through Growth.

During the past decade, virtually Western companies have been clearing droppings, using downsizing, reengineering, de-layering, and consolidation to increase efficiency and cut costs. The gains of such chiliad work, however, have largely been realized, and executives will now have to pay attending to the other role of the profitability equation: revenue growth.

The drive for revenue growth, needless to say, puts unique demands on an organization. Companies seeking to larn new customers and develop new products must exist creative and innovative, and must encourage the costless menstruation of information and shared learning amongst employees. They must also become more market focused—more in touch with the fast irresolute and disparate needs of their customers. And companies seeking growth through mergers, acquisitions, or joint ventures crave other capabilities, such as the finely honed skills needed to integrate different organizations' work processes and cultures.

Engineering science.

From videoconferencing to the Net, technology has made our world smaller and faster. Ideas and massive amounts of information are in abiding movement. The claiming for managers is to brand sense and good use of what technology offers. Not all technology adds value. But technology can and volition affect how and where work gets washed. In the coming years, managers will need to figure out how to brand technology a viable, productive part of the work setting. They volition demand to stay alee of the data curve and learn to leverage information for business organization results. Otherwise, they risk beingness swallowed by a tidal wave of information—not ideas.

Intellectual Capital letter.

Noesis has go a direct competitive advantage for companies selling ideas and relationships (think of professional person service, software, and technology-driven companies) and an indirect competitive advantage for all companies attempting to differentiate themselves past how they serve customers. From at present on, successful companies will exist the ones that are the nearly skilful at alluring, developing, and retaining individuals who can drive a global organization that is responsive to both its customers and the burgeoning opportunities of engineering. Thus the challenge for organizations is making sure they accept the capability to find, assimilate, develop, compensate, and retain such talented individuals.

Modify, Alter, and More Change.

Perhaps the greatest competitive challenge companies face is adjusting to—indeed, embracing—nonstop change. They must exist able to larn rapidly and continuously, innovate ceaselessly, and have on new strategic imperatives faster and more comfortably. Abiding change ways organizations must create a healthy discomfort with the status quo, an ability to discover emerging trends quicker than the contest, an power to make rapid decisions, and the agility to seek new ways of doing business concern. To thrive, in other words, companies will need to be in a never-catastrophe country of transformation, perpetually creating fundamental, enduring change.

Hr'south New Part

The 5 challenges described to a higher place have i overarching implication for business organisation: the merely competitive weapon left is arrangement. Sooner or later, traditional forms of competitiveness—cost, applied science, distribution, manufacturing, and product features—can be copied. They have become table stakes. You must take them to be a player, but they do non guarantee you will exist a winner.

In the new economy, winning will bound from organizational capabilities such every bit speed, responsiveness, agility, learning capacity, and employee competence. Successful organizations volition be those that are able to speedily plough strategy into action; to manage processes intelligently and efficiently; to maximize employee contribution and commitment; and to create the weather for seamless change. The need to develop those capabilities brings united states back to the mandate for HR set along at the offset of this commodity. Permit'due south take a closer wait at each 60 minutes imperative in turn.

Becoming a Partner in Strategy Execution.

I'm not going to debate that HR should make strategy. Strategy is the responsibility of a visitor's executive team—of which Hour is a fellow member. To be full-fledged strategic partners with senior management, however, HR executives should impel and guide serious word of how the company should be organized to carry out its strategy. Creating the conditions for this discussion involves four steps.

First, Hr should be held responsible for defining an organizational compages. In other words, it should identify the underlying model of the company's manner of doing business. Several well-established frameworks can be used in this procedure. Jay Galbraith'southward star model, for example, identifies 5 essential organizational components: strategy, construction, rewards, processes, and people. The well-known seven-S framework created past McKinsey & Company distinguishes vii components in a company's compages: strategy, construction, systems, staff, style, skills, and shared values.

It's relatively unimportant which framework the HR staff uses to define the company'due south architecture, every bit long equally information technology'south robust. What matters more than is that an architecture exist articulated explicitly. Without such clarity, managers can get myopic about how the company runs—and thus about what drives strategy implementation and what stands in its style. They might think only of structure as the driving force behind actions and decisions, and neglect systems or skills. Or they might understand the company primarily in terms of its values and pay inadequate attention to the influence of systems on how piece of work—that is, strategy execution—actually gets accomplished.

Senior management should ask Hr to play the office of an architect called into an already-constructed edifice to depict up its plans. The architect makes measurements; calculates dimensions; notes windows, doors, and staircases; and examines the plumbing and heating infrastructures. The result is a comprehensive set of blueprints that contains all the building'southward parts and shows how they work together.

Adjacent, Hr must be answerable for conducting an organizational audit. Blueprints tin illuminate the places in a house that require immediate comeback; organizational-compages plans can exist similarly useful. They are critical in helping managers identify which components of the visitor must alter in club to facilitate strategy execution. Over again, Hour's part is to shepherd the dialogue about the visitor's blueprints.

Consider a company in which HR divers the organization'due south compages in terms of its culture, competencies, rewards, governance, work processes, and leadership. The HR staff was able to use that model to guide management through a rigorous word of "fit"—did the company'south civilisation fit its strategic goals, did its competencies, and and then along. When the respond was no, Hr was able to guide a discussion of how to obtain or develop what was missing. (For an instance of the questions asked in this discussion, run into the chart "From Compages to Audit.")

From Architecture to Inspect Subsequently Hour has determined the company'south underlying architecture, information technology tin use a framework like the one below to guide the organization through the word and debate of the audit procedure.

The third role for HR every bit a strategic partner is to place methods for renovating the parts of the organizational compages that need it. In other words, 60 minutes managers should be assigned to take the lead in proposing, creating, and debating best practices in culture change programs, for instance, or in appraisal and advantage systems. Similarly, if strategy implementation requires, say, a team-based organizational structure, HR would be responsible for bringing state-of-the-art approaches for creating this construction to senior direction'due south attention.

Fourth and finally, Hr must take stock of its own piece of work and prepare articulate priorities. At whatsoever given moment, the HR staff might have a dozen initiatives in its sights, such as pay-for-performance, global squad-work, and activity-learning development experiences. But to exist truly tied to business outcomes, HR needs to join forces with operating managers to systematically appraise the affect and importance of each one of these initiatives. Which ones are really aligned with strategy implementation? Which ones should receive attention immediately, and which tin can wait? Which ones, in short, are truly linked to concern results?

Because becoming a strategic partner means an entirely new office for Hour, information technology may take to larn new skills and capabilities. Its staff may need more education in order to perform the kind of in-depth analysis an organizational inspect involves, for example. Ultimately, such new knowledge will let HR to add value to the executive team with confidence. In time, the concept of 60 minutes every bit a strategic partner will make business concern sense.

Condign an Administrative Expert.

For decades, HR professionals have been tagged as administrators. In their new role as administrative experts, still, they will need to shed their traditional image of dominion-making policy police, while still making sure that all the required routine work in companies is done well. In guild to move from their erstwhile part every bit administrators into their new role, Hr staff volition have to improve the efficiency of both their own office and the unabridged organization.

Within the HR role are dozens of processes that tin can be done better, faster, and cheaper. Finding and fixing those processes is part of the piece of work of the new HR. Some companies have already embraced these tasks, and the results are impressive. One company has created a fully automatic and flexible benefits program that employees can manage without paperwork; another has used technology to screen résumés and reduce the cycle time for hiring new candidates; and a 3rd has created an electronic bulletin board that allows employees to communicate with senior executives. In all three cases, the quality of HR work improved and costs were lowered, generally past removing steps or leveraging technology.

Many HR processes can be done meliorate, faster, and cheaper. Finding and fixing them is part of the new Hour'southward work.

Just decreased costs aren't the only benefit of HR's becoming the organization's administrative expert. Improving efficiency volition build Hour'south credibility, which, in plow, will open the door for information technology to become a partner in executing strategy. Consider the case of a CEO who held a very low stance of the company's HR staff after they sent a letter to a job candidate offer a bacon figure with the decimal point in the incorrect identify. (The candidate called the CEO and joked that she didn't realize the job would make her a millionaire.) Information technology was only after the HR staff proved they could streamline the arrangement's systems and procedures and evangelize flawless administrative service that the CEO finally felt comfortable giving HR a seat at the strategy table.

Decreasing costs and improving efficiency will assist HR become a partner in executing strategy.

HR executives tin can also bear witness their value as authoritative experts by rethinking how piece of work is washed throughout the arrangement. For example, they can design and implement a organisation that allows departments to share administrative services. At Amoco, for instance, Hr helped create a shared-service organisation that encompassed xiv business concern units. HR can also create centers of expertise that gather, coordinate, and disseminate vital information about market trends, for instance, or organizational processes. Such groups can act equally internal consultants, not only saving the company coin simply likewise improving its competitive situation.

Condign an Employee Champion.

Work today is more than demanding than ever—employees are continually existence asked to practice more with less. And equally companies withdraw the old employment contract, which was based on security and predictable promotions, and replace information technology with faint promises of trust, employees answer in kind. Their relationship with the arrangement becomes transactional. They give their time but not much more.

That kind of curtailed contribution is a recipe for organizational failure. Companies cannot thrive unless their employees are engaged fully. Engaged employees—that is, employees who believe they are valued—share ideas, piece of work harder than the necessary minimum, and relate better to customers, to name only three benefits.

In their new role, 60 minutes professionals must be held accountable for ensuring that employees are engaged—that they feel committed to the system and contribute fully. In the past, HR sought that commitment by attending to the social needs of employees—picnics, parties, United Way campaigns, then on. While those activities must still exist organized, Hour's new agenda supersedes them. Hour must now take responsibility for orienting and grooming line management about the importance of high employee morale and how to achieve it. In add-on, the new HR should exist the employees' voice in management discussions; offering employees opportunities for personal and professional growth; and provide resources that help employees meet the demands put on them.

HR must at present train line management in methods of achieving loftier employee morale.

Orienting and training line management about how to achieve loftier employee morale can be achieved using several tools, such as workshops, written reports, and employee surveys. Such tools can help managers empathise the sources of depression morale inside the organization—not but specifically, but conceptually. For instance, HR might inform the line that 82% of employees experience demoralized because of a recent downsizing. That's useful. Simply more than than that, HR should be responsible for educating the line about the causes of depression employee morale. For example, it is more often than not agreed by organizational behavior experts that employee morale decreases when people believe the demands put upon them exceed the resource bachelor to meet those demands. Morale also drops when goals are unclear, priorities are unfocused, or performance measurement is ambiguous. HR serves an important role in holding a mirror in forepart of senior executives.

Hour can play a disquisitional role in recommending ways to improve morale problems. Recommendations can be every bit elementary as urging the hiring of additional support staff or as complex every bit suggesting that reengineering be considered for sure tasks. The new part for Hour might too involve suggesting that more teams be used on some projects or that employees be given more control over their own work schedules. It may mean suggesting that line executives pay attention to the possibility that some employees are being asked to do tedious or repetitive work. HR at Baxter Healthcare, for case, identified boring piece of work equally a problem and then helped to solve it by redesigning work processes to connect employees more directly with customers.

Along with educating operating managers about morale, 60 minutes staff must as well be an advocate for employees—they must represent the employees to direction and exist their voice in management discussions. Employees should take conviction that when decisions are fabricated that bear upon them (such equally a plant closing), 60 minutes'due south interest in the decision-making procedure clearly represents employees' views and supports their rights. Such advocacy cannot exist invisible. Employees must know that HR is their voice earlier they will communicate their opinions to Hr managers.

Becoming a Modify Agent.

To adapt a phrase, Change happens. And the pace of modify today, because of globalization, technological innovation, and information access, is both dizzying and dazzling. That said, the primary difference between winners and losers in business organisation will be the ability to respond to the pace of change. Winners will be able to adapt, learn, and human activity quickly. Losers will spend time trying to control and master modify.

The new HR has as its 4th responsibility the job of building the organisation'due south capacity to encompass and capitalize on change. It will brand sure that change initiatives that are focused on creating loftier-performing teams, reducing bicycle time for innovation, or implementing new technology are defined, developed, and delivered in a timely style. The new 60 minutes can as well brand certain that broad vision statements (such as, We will be the global leader in our markets) get transformed into specific behaviors by helping employees figure out what work they can stop, outset, and continue doing to brand the vision real. At Hewlett-Packard, Hr has helped make certain that the company's value of treating employees with trust, nobility, and respect translates into practices that, for example, give employees more command over when and where they work.

Modify has a fashion of scaring people—scaring them into inaction. HR's function as a change agent is to replace resistance with resolve, planning with results, and fear of change with excitement near its possibilities. How? The answer lies in the creation and use of a change model. (For an case of a very effective change model, developed with and used extensively by GE, see the chart "Change Begins by Asking Who, Why, What, and How.") HR professionals must introduce such a model to their organizations and guide executive teams through it—that is, steer the conversation and debate that answers the multitude of questions it raises. The model, in short, must be a managerial tool championed by Hr. It helps an arrangement identify the key success factors for alter and assess the organisation'southward strengths and weaknesses regarding each gene. The process can be backbreaking, but it is 1 of the nigh valuable roles HR can play. As change agents, HR professionals do not themselves execute change—but they make certain that it is carried out.

Change Begins past Request Who, Why, What, and How HR staff at GE used this change model to guide a transformation procedure at the company.

Consider the example of a company whose senior direction team announced that "valuing variety" was a height priority in 1996. 6 months into the year, the squad best-selling that the diversity initiative had received more than rhetoric than action. The company'southward Hour professionals asked the team to spend several hours profiling the multifariousness initiative using a change model. (See the graph "Profile of a Change Initiative in Distress.") The resulting analysis revealed that the diversity initiative would fail unless the senior management team explored several critical questions, amid them: Why are nosotros seeking diverseness? What will be the benefit to the business concern and its customers? What is the ideal grade of variety for this organization? Who needs to be supportive and involved to make the initiative come up to life?

Profile of a Alter Initiative in Distress Ane company's 60 minutes professionals used this chart to aid senior management understand why a high-contour variety initiative was going nowhere.

60 minutes leaders spent several more hours with the management team guiding a conversation that answered those questions. Shortly after, they were able to nowadays the team with an activeness program for moving the diversity initiative forrad. Thus HR did non decide what changes the arrangement was going to cover, but it did lead the process to make them explicit.

Peradventure the hardest and nearly important challenge facing many companies in this era of flux is changing their culture. In helping to bring about a new civilization, HR must follow a 4-pace procedure:

  • First, it must define and clarify the concept of culture alter.
  • Second, it must articulate why culture change is cardinal to concern success.
  • Third, it must ascertain a process for assessing the current culture and the desired new civilization, as well as for measuring the gap betwixt the two.
  • And fourth, it must identify alternative approaches to creating civilisation modify.

HR played an of import part in changing the civilisation at Sears, which underwent a transformation of its business organization beginning in 1994. In facilitating that alter, Hour start took on the chore of getting the organization to define and clarify the concept of civilisation. It helped atomic number 82 the summit 100 managers through discussions and debates of the questions, What are the top three things we want to be known for by our customers? and What do nosotros practise that is globe class in those things? Ultimately, those conversations led to a consensus that Sears would define its civilization as "the identity of the visitor in the minds of the best customers." In add-on, HR at Sears took on the responsibility of making the business organisation case for a transformation of the company's culture. It compiled data showing that even a small increase in employee commitment led to a measurable increment in customer commitment and store profitability. The data illustrate conclusively that Sears'south transformation affected employees, customers, and investors.

Hour at Sears guided the visitor'south civilisation alter in numerous other ways.1 The specific details, nevertheless, are not nearly as important as their implications. 60 minutes tin exist the architect of new cultures, but to do then, its purpose must be redefined. Virtually every imperative of the new mandate for 60 minutes requires such a redefinition. And for it to happen, senior managers must lead the way.

Four Changes for the Line

The new mandate for Hr requires dramatic changes in how Hour professionals recollect and conduct. But maybe more important, information technology as well requires that senior executives change what they wait from Hr and how they behave toward the HR staff. The post-obit are 4 ways senior operating managers can create an era in which HR is focused on outcomes instead of activities:

Communicate to the organization that the "soft stuff" matters.

At Hewlett-Packard, managing people was one of the ii hoshin (major objectives) of the CEO for 1997. At General Electrical, CEO Jack Welch claims he spends xl% of this time on people issues. At Southern Company, senior managers are working to create an empowered organization to ensure faster and ameliorate decision making. The point? For Hr to exist taken seriously, senior managers must demonstrate that they believe typical HR issues—the soft stuff like culture change and intellectual uppercase—are critical to business success.

Operating managers can indicate this belief in several ways. They can talk seriously about how organizational capabilities create value for investors, customers, and employees. They tin invest the time needed to make certain organizational changes are debated and implemented. They can include 60 minutes professionals in strategy discussions and state explicitly that without the collaboration of HR, strategies are more hopes than realities, promises than acts, and concepts than results.

Explicitly ascertain the deliverables from Hour, and hold HR accountable for results.

It is 1 thing to tell HR that it is responsible for employee contribution and quite another to set up a specific goal—say, a 10% increase in employee morale as measured by a survey. And once such specific goals are set up, consequences must follow if they are missed.

The new mandate for HR is like any other business organization initiative in this way. A visitor has a much better take chances of achieving its goals if senior managers state specifically what they expect from Hour and then rails, mensurate, and reward performance.

Invest in innovative Hour practices.

Similar every other expanse of business organisation, Hour gets its share of new technologies and practices, and senior line executives should exist e'er on the lookout for such practices. Conferences and management literature are always adept places to hear of new ways of approaching Hr, but senior managers should also be aware of innovative HR practices going on at other companies and of new practices that are existence advocated by respected consultants.

Investing in new HR practices is another way to signal to the organization that HR is worthy of the company's money and attention. It is also a way to make certain that 60 minutes has the tools, information, and processes that it needs to execute its new mandate.

As new practices are identified, line managers should expect 60 minutes to adapt to them, non prefer them. Too often, after learning nigh an innovative idea, 60 minutes immediately tries to copy information technology wholesale. Such efforts oftentimes fail, and at a high emotional cost. Instead, investment in new Hour practices should focus on learning not only what works elsewhere merely as well how a new practise should work in the company's unique competitive situation.

Upgrade Hr professionals.

Finally, the hardest but perhaps almost important thing senior managers can practise to drive forwards the new mandate for 60 minutes is to amend the quality of the HR staff itself. Too ofttimes, HR departments are like computers made upwards of used parts. While the individual parts may work, they don't piece of work well together. When more than is expected of 60 minutes, a higher quality of Hr professional must be found. Companies need people who know the business, empathize the theory and do of HR, tin manage culture and make change happen, and have personal credibility. Sometimes, such individuals already exist within the HR office but need additional grooming. Other times, they accept to be brought in from other parts of the company. In still other cases, they must exist hired from outside.

When more is expected of the HR function, a higher quality of HR professional must be found.

Regardless, HR cannot expand its role in an organization without the requisite expertise. Becoming a strategic partner demands a degree of knowledge about strategy, markets, and the economy. Condign an authoritative expert demands some knowledge of reengineering, as well as the intricacies of what the line really does. If HR is to effect existent change, it must be made upward of people who have the skills they need to work from a base of confidence and earn what too oftentimes it lacks—respect.

Difficult Work Alee

To meet the increased expectations of their organizations, 60 minutes professionals must begin to act professionally. They must focus more on the deliverables of their work and less on only getting their work done. They must clear their part in terms of the value they create. They must create mechanisms so that business results quickly follow. They must mensurate their effectiveness in terms of concern competitiveness rather than employee condolement and lead cultural transformation rather than consolidate, reengineer, or downsize in society to plow a company around.

Senior executives who recognize the economic value and the benefit to their customers of intellectual capital and organizational adequacy need to demand more of the 60 minutes function. They need to invest in HR as if it were a business. And they must go beyond the stereotype of 60 minutes professionals as incompetent value-sapping support staff. It's time to destroy that stereotype and unleash Hr's total potential.

1. For more than on the transformation of Sears, run into The Employee-Customer-Profit Concatenation at Sears, by Anthony J. Rucci, Steven P. Kirn, and Richard T. Quinn, in this issue of HBR.

A version of this commodity appeared in the January–February 1998 result of Harvard Business organization Review.