Organizations lack agility
The consulting firm PA consulting recently predicted that in five years, 1 in 6 organisations will cease to exist. They will disappear because they are unable to respond to changing market conditions in a timely manner.
IBM and Josh Bersin have studied hundreds of organisations over the past two years in their HR function. They have discovered 3 “phases” of HR:
- HR 1.0 teams, teams that focus on getting all administrative HR matters in order;
- HR 2.0 teams that focus more on training and supporting managers;
- HR 3.0 teams where the team uses design thinking to find innovative solutions, create transparency and provide good tools.
The researchers conclude that only 10% of organisations have found a HR 3.0 situation.
This is as interesting as it is shocking:
- 1 in 6 organisations will cease to exist within 5 years because they cannot adapt fast enough.
- Only 10% of organisations have a HR team to help achieve this adaptability.
So there is work to be done!
The IBM researchers mention the importance of a sustainable workforce: it is people who shape the necessary transformations and make them successful. It is people who demonstrate agility. It is time that we stop seeing people as resources we can tap, but as a resource that needs to be well cared for, protected and nurtured.
Such a new view of HRM implies that we need to ensure a diverse and inclusive workforce. We need to bring together people with different skills, talents, visions and ideas and give them space to contribute and innovate.
It means giving employees clarity, security and trust.
“You can’t be on the outside what you aren’t on the inside”
Zummit’s app is designed from a clear vision on People Enablement: Your outside world is changing rapidly, it is important to stay well connected to changing customer needs.
In order to anticipate and respond to these needs, with new products, services, new channels, better experiences and so forth, you need a well-connected and highly agile network of highly engaged and competent employees.
Employees who know what is expected of them. Who are able to act with a high degree of ownership to move the organisation forward at the required pace.
An organisation that organizes its work in this way is called a Connected Company™.
Management too optimistic
Many organisations seem to pay too little attention to developing their agility.
The researchers mentioned earlier have found a possible cause: “The study finds a significant disconnect between what executives and employees believe about how effectively organisations are addressing these gaps. Seventy-four percent of managers believe they are helping their employees learn the skills needed to work in a new way. But only 38% of employees agree.”
HR 3.0 – 5 focus areas
So there is much to be done. Many HR managers recognise this need: more than two-thirds of the managers surveyed see HR as ripe for disruption.
The first have already begun, and the best companies are already convinced. In these companies you will find 8 x more HR managers driving this innovation.
These innovators seem to have five factors in common in their renewal of the HR function.
- Personalized employee experience
- Skills at the core
- Data-driven decision making powered by AI
- Agile working
HR 3.0 – 10 best practices
The researchers examined what winners do in transforming their HR functions. They also rated them on their impact on business operations. This led them to the next 10 best practices:
1. Measure performance continuously and transparently
Ensure clear goals, continuous dialogue about performance, and sufficient coaching.
2 Invest in leadership
A rapidly changing environment requires different leadership behaviours and new skills. Select leaders where these behaviours and skills can be developed internally. Invest heavily in their development.
3. Apply agile and design thinking
Make sure you are ready to help the organisation work agile and apply design thinking for continuous innovation.
4. Pay according to performance and skills, fairly and transparently
Say goodbye to paying by years of service. Pay according to actual contribution and demonstrated skills.
5. Work continuously on skill building
Both managers and leaders benefit from continuous learning.
Provide development and growth opportunities in the workplace and combine them with “skills academies” to help employees improve their specific skills.
6. Design valuable experiences
Employees, especially the younger generation, expect a valuable and personal experience when interacting with their employer. Provide them with this personal and show that you are constantly looking to improve.
7. Modernize HR IT tools
Many current HR tools are based on outdated principles. Make sure you offer your employees tools that match the convenience and value of the apps they use privately.
8. Apply insights from data analysis
Create and use analytics from data to better understand and manage team and employee performance.
9. Train and coach HR business partners
HR is the strategic advisor and trusted partner to the organisation, armed with data insights to solve problems.
10. Search well for the right talent
Not really a new insight, but a best practice: top talent can come from new sources, so look inside and outside the organisation to stay competitive.
The full report from the IBM Institute for Business Value and Josh Bersin can be found here: Accelerating the journey to HR 3.0