Scenarios for HR's future in the global reset ~ Strategic Human Capital Management (HCM) Blog

Tuesday, 24 February 2009

Scenarios for HR's future in the global reset

I've been posting on how organisations may change, and how HR may need to respond, to what the world leaders gathering in Davos earlier this month referred to as a 'fundamental reboot', or 'global reset', a turning point in the way that the world, and its' businesses, work. I've also explained how scenarios can be constructed for potential futures by identifying two main dimensions of change, and looking at how these dimensions interact.

For the global reset, I think the two main dimensions that concern HR are: 1. whether or not business will bounce back, eg whether stock markets will return to their former levels in 2010, or not until 2020, 2030..., and 2. whether HR is seen as a critical part of a business' strategy in responding to whatever economic conditions they find themselves in.

These two dimensions can be drawn up into the following matrix:

The four quadrants, which I've named after forms of transportation, and have linked to levels in the value triangle, are reviewed further below:

Milk float round (flat lining business environment, no change in the role of people management)

Milk floats have a motor (the people in an organisation) - but don't expect anyone to get excited about it! The focus here is on value for money - increasing the efficiency of the workforce, and of HR, for example by outsourcing. HR will keep a mainly administrative role.

Yachts at sea (business has bounced back, but people management isn't seen as key to the recovery)

Yachts also have motors, but they travel fastest, or at least most excitingly, when they're powered by other forces. The role of people management and HR is adding value - supporting the business to do what the business needs to do. Key people management processes will be leadership development, succession planning, talent management, organisation development etc.

Deep sea submarines (business is still flat lining, but organisations realise that if they're going to compete, they can only do so through their people)

I like a submarine as a metaphor for this scenario because I can picture the careful use of sonar to identify new opportunities, but also the risky nature of this means of transport. And it's nuclear powered of course - so maintaining the motor (people) is critical to its use. The focus of HR is about creating value - finding new ways of doing things based upon the capability and engagement of people in the business. Key activities will include innovative approaches to reduce costs, perhaps tapping human capital that lies outside of the organisation, the use of performance management, variable compensation etc.

Formula One track (business has bounced back - but needs to be done in a different way - people are king)

Brrm, brrm. The Formula One track scenario is about unleashing potential in people, liberating them to perform and to take advantage of opportunities for innovation and growth. Organisations are human capital-centric and like the deep sea submarine scenario, HR is about creating value - but here it's about using innovative approaches to provide new opportunities rather than to save costs. This may include, for example, segmenting the workforce and personalising support to key individuals. Key activities include developing and implementing employee value propositions; engaging and retaining talent.

The formula one track is the environment I've been writing about in my last series of posts, but I'll leave it to you to judge whether it's likely to come around, and of course different countries, sectors and organisations may find themselves in different places on the chart. But one thing is clear - the opportunity for HR looks very different in each one.

Photo credits: Oxyman, RLing, Kamalsall.