More on Digital HR

Digital HR has been coming up at HR Tech World again, largely as a result of Josh Bersin's presentation there and the focus on this in Deloitte's Human Capital Trends report.

(I'm not at HR Tech World or HR Tech Conference in Las Vegas again this year but I will be at Tech HR in Gurgaon in August.)

So what is digital HR?  Well I've been posting on this since 2008 and speaking about it since 2011) and have been trying to develop my own understanding of this since then.

I've previously suggested that it is primarily about technologies which help people be more productive, eg social, mobile, wearable and augmented (augmented / virtual reality plus augmented performance / augmented humans).  Social recognition is a great example.

It also includes a big focus on analytics, often through the use of embedded tools which can take the exhaust data produced once face-to-face processes are automated and digitised and produce insight from it.  And because digital systems make it easier to collaborate it includes tools like social network analysis to measure and analyse the extent and quality of collaboration.  Of course increasingly SNAs are being undertaken within or on the back of email systems and enterprise social networks too.

Digital HR doesn't include information technologies like HR or talent management systems as these are about managing people rather than enabling them to manage themselves.  And it doesn't include other exciting developments in technology like robots (especially humanoid robots / androids) and AI.

Appisisation

However the other thing it definitely does include which I didn't refer to previous is apps, increasingly available for download from internal app stores, discussed best in Bersin@Deloitte's Predictions for 2016, rather than Deloitte's HC Trends report.

"As one large company in India recently put it, this new world is focused on building HR “platforms”—infrastructure and technology standards that allow us to rapidly build new solutions, collect data about people and business processes easily, and quickly iterate and improve our employee digital experiences to make them perfect. Think about what happens in the App Store—apps are updated almost weekly. We need to follow this model. 

The best example I can give is the development of an exciting mobile application, Sidekick, by Commonwealth Bank of Australia. I learned about this app roughly 18 months ago and we recently wrote a case study on this platform. This app brings all employees’ HR, collaboration, administration, and support apps to their phones. Within two weeks of rolling out the app, 20,000 employees had actively adopted it. I do not know of a cloud or web-based app which has ever been that successful." 

The future of HR technology is about apps rather than big e-HR systems.  This shift is already well under way with the Big Three vendors SAP, Oracle and Workday and others appisising their existing HR systems.  There's also an increasing number of start-ups producing independent point apps which support small specific bits of functionality more powerfully or creatively than big systems.  I think some of these apps are amazing, however I agreed with the suggestion during HR tech World that employees will get weary of using many unco-ordinated applications.

Better would be a single platform which provides apps and even more importantly the design of bespoke apps.  That's exactly what Salesforce HR provides - core HR functionality (eg Work.com for social performance management), an HR app store and the ability to have an organisation's own 'citizen developers' (teams of HR, IT, managers and employees) using Salesforce's CRM platform capabilities to develop their own bespoke apps.

I think this is a really useful change, particularly as it challenges the existing move, resulting from the move of systems into the cloud, away from the ability to customise systems to simply being able to configure them.  That provides certain benefits but it limits the ability to design best fit approaches which I think needs to be part of the digital age.

So I'm surprised that Salesforce aren't pitching at conferences like HR Tech World as part of a new Big Four (or perhaps along with IBM Kenexa and Watson Talent Insights as a Big Five).

Platformification

Bersin mentioned platforms in terms of technology based environments for development and delivery of apps etc.  The even more important type of platforms is those systems enabling employees and employees, plus others providing knowledge and skills, to connect and focus their work more easily.   A good example is PwC's Talent Exchange which has been in the news over the last few weeks.

However there's also the opportunity to use these platforms internally to enable employees offering skill and others to connect with managers or others offering work. 

McKinsey have been writing about this.  Their suggestion is that digital platforms can put the right person in the right job, identify gaps in skills, help employees as they gain new capabilities, chart career paths, and nurture the development of the next generation of leaders.

"The impact of digital labor platforms and tools is significant and measurable: on average, according to our research, companies can realize an increase of 275 basis points in profit margins. Of course, not every organization will reap the same advantages. The extent of a company’s benefit will depend on the mix of people and skills it needs in its workforce and on its specific operating model. The biggest winners will have a large share of highly skilled workers and a frequently shifting mix of project teams. But even companies with mostly low-skilled workers will benefit, since digital platforms improve the assessment, deployment, and performance of candidates and reduce attrition and the need for costly recruiting. 

Some of the largest gains online labor platforms generate will accrue to professional-services firms. Because they have so many client-facing workers and so few back-office ones, the productivity gains will be reflected mostly in increased output, which we estimate can rise by up to 9 percent, while employee-related costs can fall by up to 7 percent... In global firms, where expertise is dispersed across offices and client work spans industries and functions, digital platforms can help catalog individual expertise at a detailed level. Team-formation tools also take knowledge, interpersonal traits, timing, and geography into account."

These are both exciting, important changes for HR, however the biggest, highest impact and most difficult to implement changes come from within the HR arena itself.  As Josh Bersin suggested at HR Tech World, "digital is a new way of working and behaving - not just tech."


More on this tomorrow...

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#HCTrends - Networks of Teams and new Organisation Designs

Deloitte's Human Capital Trends for 2016 is interesting reading again this year (marred slightly by a few proofing errors such as referring to a third of the workforce being contingent even though the report is supposedly global in scope and the statistic only relates to the US workforce) and have prompted these thoughts, centred around the top trend: organisation design.

Firstly, I like the theme of the whole reports - different by design.  As people and organisation become more important so does its deliberate design, rather than just letting things happen, as has often been the case in the past.  But so does the need to create difference, rather than designing everything the same as other organisations.  And for this reason we do need to be careful about reports such as this - we can pull out common themes and possibly identify a single main journey of travel, but we also need to recognise that every organisation is different and should / must therefore do different things.

Secondly, I also like the increasing focus on experience, recognising the same shift in the importance of people, the creation of human capital, and therefore the positive management of the people who provide this.  But it's important we do't go to far - titles matter little but if an evolution from Chief Talent Officer to Chief Experience Officer marks a real shift in responsibility it isn't a positive one.  Experience isn't an end to itself.  Talent is - in the sense it can create value and lead to better business results.  Experience is only useful to the extent it informs improvement in talent, or directly in business results.

Moving on to organisation design itself, the report points to the rise of networks of teams.  And here I have a few more important criticisms of the thinking building on the research.

Firstly I'm not sure this type of organisation form is very new - to me it's just a continuation or maybe a partial resurrection of the well documented horizontal organisation form, with a newer focus on agile projects rather than end to end business processes.  The nature of the work and organisation is similar, it's just that people will move from team to team more rapidly and possibly work on more than one team at the same time.

This shift from waterfall to agile projects isn't a new organisation form, it's simply the introduction of new organisation principles (agile, decentralised, customer centred, empowered etc) and the consequent tailoring ('difference by design') around these principles.  Ie whether people are told what to do or set goals at the bottom depends upon these principles, not the organisation form.  So does the formality or informality of the structures in which ever form (functions or horizontal teams etc).

I'm not sure there's really a move from functional designs to 'networks of team's / horizontal designs (by the way we should never write or speak about moving away from a functional structure - it's the whole design including the structure but also the other elements of an organisation which need to change.  Anyway at least Deloitte doesn't refer to a move from hierarchies to networks which is very badly confused.  Changing the organisation chart isn't just a small part of the transition to a network of teams its pretty much inconsequential compared to the other changes which would be required.)

I agree there's a move from process to projects within horizontal forms.  The remaining trends are from functional forms to community and network based designs which I try to explain this in my organisation model below:

Also, despite Deloitte's findings (only 38% of companies are functionally organised) most organisations are still functional / divisional or a matrix based largely on functions and divisions with aspects of these other forms (and even if Deloitte believes matrices are unwieldly remnants of the 1960s they're clearly not).

This is the way McKinsey describe it:

"Agile organizations, by contrast, deliberately choose which dimension of their organizational structure will be what we call their “primary” one. This choice will dictate where individual employees work—in other words, where they are likely to receive coaching and training and where the infrastructure around their jobs is located. Day-to-day work, performance measurement, and the determination of rewards, on the other hand, are more likely to happen in teams that cut across formal structures. The primary home of employees remains an anchor along their career paths, while the crosscutting teams form, dissolve, and reform as resources shift in response to market demands. Sometimes these dynamic teams show up in the org chart, typically in the form of business lines, market segments, or product units. At other times, they don’t, notably in a holacracy or other start-up organizational forms."

The remaining prevalence of the matrix is why Deloitte find that most networks of teams are managed by expert team leaders not 'professional' / traditional managers.  It's because there's a functional (or possibly community based) organisation in the background where professional managers are still managing the development and the careers of their people (as in a professional services firm).  If this main matrix dimension wasn't there, project managers would take a more traditional set of responsibilities too.

Also note that a lot of the criticism of functional models is criticism of poor functional organisation, not of the organisation form itself.  Eg networks of teams apparently replace silos with co-ordination between teams.  Well well designed functional organisations avoid siloisation through co-ordinating mechanisms too.  And who ever said that leaders in a functional organisation could only operate out of corporate headquarters?  As for functional organisations focusing on making a manager happy rather than being someone whom the team would want back on the team that's just poor performance management.

It's interesting that Deloitte see the rise of digital technology as a key enabler for their networks of teams.  Actually it was largely the rise of ERP type systems which led to the decline of process based horizontal organisations as businesses found that ERP functionality meant they didn't need to take on the complexity of horizontal working.  It sounds as if digital is now making a further shift back to horizontal organisation (projects vs processes) more possible again.

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Social Reward

I've already posted on some of the other opportunities for innovation that I've addressed in the ATD's Talent Management Handbook.  However probably the most important of these is team based, or social reward.  This is about transferring the focus of reward from individual employees to teams and reflecting on the necessary innovation to support this change in focus.

Here are my comments from the Handbook:

Team Based Reward

One of the biggest changes underway in many organizations is a move away from hierarchies towards teams, supporting increasing needs for collaboration.  Making this shift work requires team based pay.

This is a difficult shift to make work and involves high risks for example it can increase competition between teams just as it reduces this within teams.  Supporting this, research on cases where team based reward has been used, particularly where this has involved knowledge workers, tends not to be that favourable.  However the results of team based reward will obviously depend upon how it is used and in many of the cases which have been reviewed team rewards had not been designed that smartly.  The main problem seems to be that communication has been left too late.  Garbers and Konradt’s recent meta analysis of 30 different studies of team rewards also suggests that team rewards work best for smaller teams and mixed gender teams.  It also notes the importance of distributing rewards equitably rather than just equally between team members.

The best suggestion I have heard to make team based reward work is to reward a team for the performance of the individuals and divide this reward between the individuals according to their contributions to the team.  This ensures individuals focus on collaboration not competition within the team but also that they and the whole team are focused on helping increase the individual performance of each person, avoiding any tendency towards social loafing.

An alternative is to combine team and individually based reward.  For example Whole Foods Market provides an individual base pay but further rewards are linked to team performance.  To help make this work, employees have some say about the people working in their team.

Anyway just because it is difficult should not be enough of an argument to mean that we should not try to do it.  Also the major challenges probably lie out of the reward area itself, for example in developing effective team based performance management which will be a requirement for team based pay to work, and also efective team building.

Also see:

• Social recognition

• Personalised reward

• Reward gamification

• Pay transparency

• Pay ratios

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HR Academy Asia: Strategic HR Business Partnering

I'm training on HR business partnering in Asia next month - in Singapore on 18-19 April, KL 21-22 April and Hong Kong 25-26 April.

The sessions are being organised by Human Resources Online's new HR Academy.

If you're in the region and you get a chance to, do come and spend a couple of days with me.  It's an important area and I've got some great suggestions to share.

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#HRGV2016: HR Analytics and Artistry

I'm at HR Grapevine's annual HR and talent management conference.  This year it's focused on the role HR plays in combining left and right brain thinking to create balance in the force, sorry talent pool, ensuring creativity and an entrepreneurial spirit are grounded with analysis, logic and planning.

We've had two sessions this morning - one on culture, purpose, values etc which was headed up by Paul Lambert from Korn Ferry Hay and Lynne Weedall from Selfridges and also featured Stephen Lochhead from Unilever, Pauline Prow from Monarch, Liz Burton from GSK and Heather Melville from RBS.

Then there was a session on the digital revolution and the use of the data this produces.  This was led by Eddie Short from AON together with Tony Strudwick from Manchester United, supported by Tess Smillie from Samsung, David Connell from Peugeot Citroen, Darren Philpott from Barclays and Ann Pickering from O2.

It's been a great morning and I particularly liked the way that both sessions - the one on the more right brained concept of culture and the other on the more left brained requirements for measurement - actually combined the need to both science and artistry.

Ie we need to measure culture even though it's ambiguous and intangible (the key for me is to dig below the idea of culture and to express what you really need to build.  Once you've done this the more specific requirement which generally be much more easily measurable.)

And I liked that suggestion in the second session that there are two types of decision making - the human type demonstrated by Alex Ferguson at MUFC - the last of the great intuitive coaches, and the analytical type where the goal is to quantify human capital and the way business performance is provided through people.

Speakers suggested the analytical approach is important because currently we don't apply same rigour to HR as other areas of our business and we need to place HR on a par with Finance or Marketing.  It was suggested that one way of doing this is building a data warehouse to get a global view of information - absence levels, accident data, talent trends etc.  The belief was that data mining will help us talk about our strategy - how we can predict where next levels of stress will be, and spot peak absences and test hypo or performance processes etc.

Actually I should have said hope rather than belief.  I'm personally very suspect that data mining will ever provide a useful insight on strategy as the human information which is the most useful in developing HR strategy tends not to lend itself to being included in a data warehouse.  As one of the other speakers noted there's a good reason we've been slow to measure the link from HR to business impacts which is that we're dealing with human beings which once again are more difficult to measure.

However I agree with the same speaker that this can't mean that we don't measure what we can.  It's just that we have to be more open to qualitative and subjective forms of evidence than those that other areas of our businesses tend to use.  I loved the suggestions that we mustn't give up on using gut feel and that we have the right to use judgment along with data.

It's why I suggest we don't need data scientists in HR as much as we need wisdom artists.

There's a problem with this of course in that our business colleagues tend to expect that we'll start producing more quantified, reliable data for everything that moves.  Well either we can pretend that everything can be monetised and forced into a ROI calculation.  We'll probably get lots of kudos for doing this but won't ultimately have much impact on our organisations as we'll be over-simplifying things which are enormously complex and that will lead to poor decision making too.  Or we can be honest about the complexity and ambiguity of HR data, be criticised for being too pink and fluffy, but have bigger impacts on the performance of our businesses.

I know which choice I would make if I was still an HRD.  It's about resisting the Finance department's Kool-Aid, pushing back against Ram Charan's offer of a trip to Mars and being comfortable with our Venutian future (see my post on Finance is from Mars, HR is from Venus).

It's why I worry when I hear, as some speakers said, that we should make sure our programmes are business initiatives not HR initiatives, and that our analytics are business analytics not HR analytics.  I think this type of talk undersells, undervalues and distorts the work we do in HR.  And that we'll never really have the impact we want to until we, and then our business colleagues, understand that people and therefore HR are different to other areas of a business.

And why I wish there hadn't been quite as loud a round of applause supporting a challenge that HR isn't pink and fluffy.  Well people may not be fluffy but they are squishy.  And you can tell from my branding that I've got no issues with pink!  Actually I was interested to see a tweet from David Macleod at Engage for Success this morning suggesting "We have lost our humanity in business, we need to put it back."

Well maybe being a big more pink and fluffy would be a step in the right direction?

It was a provocative conference and I've been provoked to post a little bit further than I'd intended.  But I'd like to think you might still agree with me.  If you're an HR scientist I doubt that you will.  If you're an HR artist I'm more hopeful you might.

The good news is that most of you are artists at heart - or at least the majority of attendees at the HR Grapevine conference suggested they thought HR is more of an artist than a scientist.

Thanks to HR Grapevine for raising the debate.  We do need both art and science, logic and creativity, but the focus in HR has been on logic and science too long (eg the CIPD's HR framework).

Restoring the balance is about putting more art back into our roles - and into business too.

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Little Satisfaction from Zero Hours

Zero hour contracts are back in the news today (the picture above - not my best look! - is from my interview about them on BBC News).  The reporting started earlier in New Zealand where the contracts have been abolished, and the continued, but for rather different reasons, here in the UK where the number of employees working on them has increased 15% over the last year.

The Office for National Statistics suggests this number is now 800,000 people, or 2.5% of the working population.  However their suggestion is growth may not have been so high as these figures suggest because the contracts are now better known and the response may just be a result of people tuning into the term.

That's partly supported by Glassdoor's findings that 20% of unemployed people don't understand what the contracts are about (research completed before the ONS figures).  However Glassdoor also found that 25% of unemployed people have been offered a ZH contract and that about half have taken the offer.  That suggests a substantially higher number of people will be on ZH contracts and that the result of not understanding the term is that the ONS is understating not overstating the growth figures.

That matters because as I've posted previously, most of the people who have taken on ZH contracts feel they have had to do so because they needed the money or for other requirements.  A much smaller proportion of people value the flexibility they provide.  This contrasts with CIPD findings but Glassdoor has got real vs just survey data on its side ie if you look through Glassdoor comments on ZH contracts it's quite clear that people with them are no where near as satisfied with their employment as those on traditional full or part time contracts are.

These examples were published in the Daily Mail today:

• "Never worked longer than a 4 hour shift because they didn't want to have to give me a break."

• "The 0 hour contract is bad because you can end up not getting work for days, or even weeks."

• A part-time shop worker described the contracts as a "nightmare", saying staff wanted four-hour contracts to be doubled.

If you think these comments are biased just check the Twitter stream for a search on zero hour contracts (ignore the tweets from New Zealand).

We can debate the pros and cons of ZHCs but the bigger issue for employers at least is the way they're perceived so negatively, whether this is fair or not.  Whilst this is the case they're unlikely to play a role in improving employment flexibility and instead are more likely to be contributing to a continuation of the UK's low-commitment, low-productivity economy.

For more on this debate, here are some of my comments in the Guardian:

“The most common reason that unemployed people turn down zero-hours contracts is the need for a guaranteed level of income to make this a viable alternative to receiving unemployment benefit. These contracts favour the employers over the employees. 

With 38% of these contracts held by 16- to 24-year-olds, it means there is now a significant proportion of the young workforce without guaranteed incomes.

This pay-as-you-go employment causes issues and judging by the comments on Glassdoor, this is not a preferred choice of employment in the long term.”

And there's more on the research in these blog posts too:

• UK HR / Glassdoor / Zero Hour Contracts

• BBC Breakfast: Zero Hour Contracts (a previous BBC interview talking about the research)

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Picture credit: @Mid247

#HRGV2016 HR Grapevine: Is HR logical or creative?

I'll be attending HR Grapevine’s annual HR & Talent Management conference, Left Brain vs Right Brain, next week.

I'm looking forward to the event firstly as I admire HR Grapevine's nerve in using the left and right brain idea.  Most HR practitioners probably think this still applies to the way people think (no disrespect but just a recognition that the profession isn't always as up to date as it should be) but there's a small minority who knows it doesn't (though there are still certain differences in the two sides I think) and who are very proactive and vocal in shooting down anyone who use the term.  And of course there are those of us who understand it can be used figuratively without implying anything about the structure of the brain.

Secondly the need to be creative as well as logical was one of the themes we explored in the Art of HR conference in 2014.  I thought this event really brought out of the opportunities of, and I certainly felt inspired by HR's creative, right brained side.  I'm looking forward to more stimulation at the event next week.

In fact HR Grapevine have also looked at the issue of artistry and science.  That's not quite the same as the difference between being logical and creative (as both art and science need but logic and creativity) but there's clearly a level of connection between the two.  Science is more logical and art more creative.

As comments from HR practitioners suggest, we do need both.  To be both logical and creative, scientific and artful.  But I still suggest, as I did around the Art of HR event, that the priority for the profession at the moment is to focus on our creativity and artistry.  That's partly because the big problems in organisations at the moment are mainly about a lack of humanity - evidenced by low levels of engagement etc.  And also because HR profession seems to be moving in completely the opposite direction, becoming obsessed with measures, analytics, and it's own credibility within a business.

To be cold, clinical, observant, precise and law abiding surely can't be the basis for our future?  Even in analytics, the core need is to demonstrate validity not reliability.  But cold management of people as if they were widgets is going to spell doom.  The rest of business management may often be cold but that doesn't mean we need to be.  Instead we need to convince the rest of the business to be a bit warmer.  More emotional, creative and artful in their management of people.

In fact many business leaders and managers already understand this need.  If HR doesn't get with the programme there's a real risk we'll pass each other light ships in the night, with HR taking responsibility for people analytics, and Finance being given accountability for love, empathy, passion and everything's that important in an organisation.

Let's see where we get to next week...

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Top 75 HR Blogs

I like this list of top blogs to follow in 2016 - great to see Strategic HCM in there once again as well.

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Top Employers and other benchmarks

One of things I've been meaning to post about is Top Employers and other forms of benchmarking.

Top Employers released their 2016 lists of certified organisations a few weeks back and invited me to their swanky dinner at London's Guildhall which was good fun (I'm sitting behind the table sign in the pic above).  

Best Companies have recently released their lists too.  Then there's Great Places to Work - their list's out in April.  Investors in People have their awards in March.  And the lists go on.

So what do companies get from appearing in these lists - other than the engagement benefits of a nice dinner and the recruitment and retention benefits arising from the social proof that you're looking after your people well?

I tried to talk to quite a few of the certificated attendees (let's just call them winners) at the Top Employers do and the main thing I picked up was that it's seen as an opportunity to validate that they're as good as they think they are.

But this only applies if you're sure you want to manage your people in the same way as the awards suggest.  That's not always easy to do - it's easy to develop a standard which is so loose it's no use to anyone (valid but not reliable), or to make it so tight that it's not seen as relevant by many firms (reliable but not valid) or worse, that it encourages them to do things they shouldn't be doing.  That's a particular risk when you apply the same standard globally even though differences in national cultures mean you really need to do different things.

I talked about this with some of the winners at Top Employers too.  They seemed happy that they could tell Top Employers which things they didn't see as relevant and just be assessed on the things which are.  I'm not sure quite how this works, but if it's the case, that seems a good way to square the circle.

Other employers will be happy with the trade-off in validity vs reliability and they might want to engage in process benchmarking ie going to and studying one organisation in-depth.  Or other organisations will trade off reliability vs validity and use something like PwC Saratoga's benchmark dataset to compare their data against lots of other organisations.

There are also other ways to deliver high levels of validity / meaning and the reliability provided by comparing your data with lots of other organisations.  For example Glassdoor's newish Employee Choice Awards (and last year's) provides both high validity and high reliability by enabling a comparison of employees own comments about their employer, without the intervention of an assessor in the process.

Picture credit: Changeboard

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HR Analytics training in Australia

I've been touring through Australia delivering HR analytics training with Clariden for the last few weeks so have got a bit behind with a few things, including blogging, so I'll be making a quick attempt at catching up over the next few days.

But first a few thoughts on my four two-day sessions in Australia.  Firstly it was great to be there.  It was my first trip back since speaking at AHRI's national convention last August and the Summer is even nicer than the Winter.  I got to spend quite a bit of time outside and was particularly pleased to get an opportunity in Perth to walk a mile in the shoes of a shark attack survivor courtesy of Roman Krznaric's Empathy Museum (see my post on Roman's session at HRPA in Toronto last year). 

But other than the weather it was great to hear everyone (Perth excluded) talking about growth in their businesses and corresponding opportunities in HR.  I sometimes forget that the ongoing tentative approach to investment so prevalent in the UK isn't the global norm.  Australia is helped by its closeness to Asia rather than the EU but I think their generally more sunny disposition is part of their advantage as well.

Secondly I was pleased that my Aussie participants weren't as wedded to a hard HR measurement approach as is often the case in the UK (that measurement always needs to be quantitive and ideally financial, that more analytics means dispensing with intuition, etc).  The Australian perspective on this seemed much more open to recognising and tolerating the squishy nature of HR outcomes and the qualitative and subjective response to HR analytics this implies.  I normally manage to convince UK participants of the need for this perspective but it was nice in Australia to have this understood without having to sell it.

I'm aware that other HR analytics commentators may feel the difference in perspective means that Australia is further back in their development of analytical approaches but to me it means they're more mature and will be able to make more progress in their use of measures and analytics too.

Reflecting back on the trip I'm also wondering if my two insights are partly connected.  Is the more positive economic environment connected to the more mature analytical perspective too?  I wouldn't suggest that the two things are causally related any more than I'd suggest a real link between shark attacks and ice cream sales but there might be a real causal factor underpinning the two - for example a less US oriented focus on short-term earnings?

Anyway, I look forward to going back again soon.

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