The Capability Gap

Last weekend, I attended the yearly post-doc seminar of my Ph.D.-advisor. Many of his old students attended as well and we had some very lively and interesting conversations and discussions at the intersection of people, society, and HR. We talked about Intercultural Trust (Link), Organization Effectiveness, the Future of Work, as well as how to enable innovation within companies. Very interesting topics – and all have one thing (at least for me) in common: They all need the HR function as enabler, supporter, promoter and guide. I have said it already in one of my earlier posts – I believe (and am strongly encouraged by the academic discourse) that for a company to be successful in the next decade, it needs a strong, self-confident, enabled HR department which understands the business, business- as well as mega-trends, talent and talent needs, organization and organization needs. An HR function that has talent & organization performance at the heart and center.
After our academic meeting, I met an old friend of mine who is in the HR business for more than 30 years now, being an HR Interim Manager for almost 15 years. So he sees and acts in many different organization’s HR functions. And this mainly as an interim manager rather than a consultant. He really sees both, organizations and HR functions from the inside and lives within this world for a dedicated period of time as an (HR) Line Manager. I have very engaged and lively updated him on the conversations I had earlier that weekend and for a minute or so, we were both very happy to (a) have such a fantastic future ahead of HR and (b) be part of that. But very soon, we got to one important question: Is HR, are the HR functions that we have seen, worked in, consulted ready for this future? And this is something we then got concerned about.
The first question was about the organizational structure and governance of today’s HR functions. These are mainly following the Ulrich Model. But, very often in Germany, this needs to be looked at closer. We both agreed that in many of the organizations we have seen, the “Personalreferenten-Modell” just got a minor update in centralizing the administrative services, CoEs got somehow created and the current “Referenten” (Generalists in essence) were renamed to HR Business Partners and told to be strategic now. This is not what Ulrich had in mind and of course not, what his model is about. But we both believe, and there is sufficient empirical evidence that a more traditional HR model is not ready for the realities to come. But even if a state-of-the-art Ulrich model got introduced, this does not necessarily mean that the HR function is ready to tackle the challenges and opportunities to come. First and foremost, the Ulrich model itself is already around 20 years old (with minor updates/ additions over the years) – and having it operate across the globe in many different companies, has surfaced some shortcomings. In addition, there are some systemic issues within the model (see here) that make it a bit hard to work. And last, but not least, the realities have changed and will change even more and faster since Ulrich has shaped his model of HR.  A look to NEW HR (in press) is something I recommend.
But besides this organizational and structural capability gap, there is an HR professionals capability gap. A recent empirical study on the capabilities of german HR professionals has surfaced that only a minority got the right training, got a chance to acquire the necessary skills and competencies necessary to operate within a modern HR environment (see here). HR professionals in Germany (for example) were mostly still socialized and trained in a more traditional HR model with a more traditional approach and understanding of what HR is about. Capabilities necessary for the Ulrich model are often too little or absent. This is even more dramatic than the structural shortcomings. Organizational shortcomings can be compensated by highly motivated and capable professionals – professionals that lack certain key skills and competencies can not be compensated by a superior organization. However, this is nothing to blame HR professionals – even if they wanted to or even if HR leadership identified this capability gap, today, there are only very little possibilities (except a specialized, in-house program with professional instructors or going abroad) to acquire these competencies anyway.
In any case, both are highly important homework to be done as soon as possible. The mega-trends, business trends, future of work, changes in society and workforce are not waiting. They are already here or approaching fast. I encourage all HR professionals to perform a readiness check of their HR structure, governance and capabilities to see if they are ready for tomorrow. – and if you identify gaps, act now.