what executives really want from HR
I am often asked what HR issues keeps CEOs and other executives up at night.
And, for a change, I have some good news to report. More and more, C-level executives tell me that HR has found a seat at the leadership table. This is a big change from a few years ago and one that was very necessary for organizations to compete in the knowledge economy.
But let’s not pop open the champagne just yet. While HR has found its way to the table, many executives still feel that HR can do more to contribute to the strategic direction of the organization. There is no question that, in today’s knowledge economy, talent is a competitive advantage; yet, in many organizations, HR is still primarily reactive to business challenges and not focused enough on advancing the organization’s strategy. HR also still lags behind other departments in using data to inform decisions. Executives are looking for HR leaders to bring new opportunities and ideas to the table to maximize organizational capabilities and to grow, innovate, and sustain the business in the long term. To facilitate this, I believe HR will need to shift its mindset in three critical areas.
connect to the business’s goals
The first shift in the HR mindset is to strongly connect its work to business goals in a direct and measurable way. Here is a case in point.
CEOs and executives tell me they are concerned about not having the right skills and leadership to drive business growth. They discuss these challenges in the context of things like revenue growth, profitability, new products, and new markets that they want to penetrate.
HR leaders echo the executives’ concerns; however, when they talk about the same challenges, they use terms like talent reviews, leadership development, competency models, assessments, and succession.
Do you see the disconnect?
Many HR leaders focus on tactical execution without seeing how it drives the strategy of the business. When I see this happen, I always ask HR leaders if they’ve figured out what the critical skills are that will drive the business over the next three years, what the gaps are, who they can cultivate from their existing workforce, and who they will need to find externally. Unfortunately, most of the time, they have not done this upfront work. Without specific answers to these questions, executing talent reviews and leadership development will lead to generic results, rather than achieving the business goals.
But that’s not all; HR must then measure its performance based on the achievement of actual business results, like every other group whose leader sits at the table. If the organization’s goal is to achieve 30% revenue growth over the next three years, HR must be held accountable and ensure its programs and services are advancing that particular goal. Having a real stake in the business is a critical part of HR making a more meaningful contribution to the leadership team.
experiment with technology
Emerging technological trends, like big data and artificial intelligence, are top-of-mind for many executives. These new trends will dramatically change how we work and live. Many companies are exploring and investing in these trends as they want to get ahead of new external competitive threats.
Executives are looking to HR to embrace these tools to create agile organizations that can stay ahead by adapting to these new trends. They want to make sure that HR is innovating to create and sustain a competitive advantage with the organization’s talent.
Yet I still see many HR leaders who are reluctant to try new tools and technologies that could improve the way work gets done, develop a more agile workforce, open up new talent pools, and create a better employee experience.
This is the second critical shift in mindset that HR will need to make to meet executive expectations. In this dynamic business environment, HR leaders must be curious about technology trends and be willing to pilot and experiment to understand what new opportunities these tools can uncover.
For example, I believe there is broad applicability of artificial intelligence across HR processes and the employee experience. Can you imagine knowing the engagement level of your workforce in real-time and not having to rely on surveys? What if any employee could get accurate information on their benefits by asking a chatbot? And how about if we could predict the training needs of the workforce and reinforce learning after it happens?
All of these technologies exist or could be easily built today with a little artificial intelligence. And here’s the other thing: the adoption time is likely low as most employees already use similar tools in other aspects of their lives.
HR must adopt a mindset of experimentation to help maximize organizational capabilities by proactively thinking about how these tools and technologies could make a difference to the organization.
evolve into an anticipator
Embracing these tools and technologies will also provide the data and analytics for HR to evolve from a business partner that reacts to trends, to an Anticipator that helps the business stay ahead of trends and creates and sustains a competitive advantage with talent. This is a third critical shift needed in HR’s mindset to meet the expectations of executives.
There is no question that new competitive threats emerge every day, and from unexpected places. Executives remain sensitive to what happened several years ago when nearly every organization across almost every industry found themselves falling behind emerging internet start-ups. While many of these companies tried to create a website or an online presence, they struggled to get ahead of new, agile organizations that were architected around the internet – and many of them are no longer with us (e.g. Blockbuster, ToysRUs). Executives are looking for HR to help ensure the organization avoids this in the future.
This all starts with HR using data more effectively to inform decisions, just like other groups in the organization. Embracing data and analytics will provide HR with the ability to discover patterns, identify trends before they happen, understand business risks to the people dimension of the business, and formulate new, innovative ideas to mitigate risks and stay ahead of changes to the business.
Unfortunately, this is an area where HR continues to struggle. Over the last two years, there has been little increase in the small number of organizations (only 14% according to Bersin) using integrated talent analytics. For a few ideas on how to get started in this area, check out my blog People Analytics or Die.
the time is now
Maybe I am an alarmist, but I think about this next statistic a lot: the average lifespan of a Fortune 500 company is 15 years, compared with 75 years in 1955. It is not easy to develop a sustainable organization and, in a knowledge economy, talent – especially creativity and the ability to innovate – is a competitive advantage. Executives understand this dynamic and know that having HR focused more broadly on the business strategy and goals, and advancing its competitive advantage through talent, is critical for long-term organizational sustainability.
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