Category: Human Resources

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Exciting roadmaps and ideas – and wrong turns (a weekend read)

During my recent trip to Silicon Valley, I had the pleasure to meet up with three fascinating companies in the space of enterprise and HR technology. It was my usual visit to reconnect F2F but also understand the direction these companies are going, their roadmaps their strategies. And of course, this year more than ever, it is about understanding how they see (Gen) AI in their products. I met up with Workday, ServiceNow and Microsoft – and they all have (Gen) AI identified to be at the core of their products, but each in their own different ways. That makes it exciting to listen and to understand – and after the in person meetings, I must say that it makes sense to me which direction and adaption they have all taken. All three go different routes, but they have good reasoning behind. If these are correct though and will bring them into the future of HR technology is a question to be answered by the future. As I wrote a few posts back, I believe that we are at a cross-roads when it comes to HR technology. We are at a junction where either the current main players need to reinvent themselves completely or be overtaken by new players. It is a great time to watch and an exciting time to be in the market – however, I hope you are currently not shopping for a new HR core system. It is a difficult time to decide what the future-proof decision will be. I don’t envy you if you are in this position.

Microsoft

But now let’s look at what I have learned. Let me start with Microsoft. They are currently one of the biggest and most active players in the space of (Gen) AI. Their usual surface event this year was more about Gen AI and Co-pilot than anything else (I think they turned to surface devices 40 mins in only). And that speaks to the “all in” that I have also experienced during my visit. Microsoft is bullish about Gen AI and its opportunities. But they have also already learned a lot since the beginning of the year – I believe this is truly contributed by them being in this game early on, but with their open mindset and closeness to the enterprise market. This is what makes the position of Microsoft so interesting. They have not only the technology (OpenAI) but it is paired with an amazing set of enterprise-partnerships and an internal, company-wide growth mindset. You can clearly see how Satya has transformed the thinking and approach of Microsoft and how fundamental this is to their agility in this space.

Now, when I mean they learned, I mean that they are not only focused on Gen AI but at the same time bring in their other strenghts. They know that their customers are worried about data privacy and data security and they know that data, which is at the heart of any successful Gen AI application, is not readily available to be ingested and made use of for Gen AI within companies. And knowing that and being as agile as they are, they made this a product feature as well as new additions to existing products. Data privacy and data security are now at the heart of their enterprise Gen AI applications so that you don’t have to be worried anymore where your data goes and where it might get exposed – or how and where the LLM uses it for their own learning. This is truly a key function in the enterprise market. And in addition, they are deploying additional tools to manage and clean data in your enterprise network and intranet so that it can be used for Gen AI applications. And at the heart of everything lies the MS Graph. In the good and in the bad, because Microsoft is at the heart of the tech infrastructure for most companies, they are in a pole position.

However, of course there is a “but” – and the but is that specifically in the HR space, Microsoft doesn’t really have an idea what use cases make sense or how to apply and integrate Gen AI into the processes and routines. As often in technology: They have a solution and are in need of a problem they can apply it to. Again though, Microsoft being Microsoft, they understand this and are actively engaging with companies to learn and identify the right use cases. It has been great to watch how Microsoft revolutionizes this market with their speed and agility – and I am looking forward to the next few months. Let’s see where we stand in just 6 months from now.

ServiceNow

Let’s then turn to ServiceNow. I had shared my impressions of their K23 conference here, and meeting them in their HQ, my impressions got confirmed. ServiceNow is highly active on Gen AI and this in a truly “platform of platforms” fashion. You can either “bring your own” LLM and connect it to your ServiceNow implementation – or subscribe to their LLM which is more customized and focused on the actual use-cases you might have. And this is also their strength and a differentiator. They have a clear picture of how their customers use their platform and what use cases there are, what use cases bring the most value and how to apply Gen AI to lift that value. This is fascinating to see and amazing how focused and targeted they go after this. I cannot wait till Vancouver is out and the full breadth of their first generation Gen AI application will be available to the wider audience. Being able to test & learn with them on this journey has been a fabulous experience. 

Now, besides Gen AI, of course ServiceNow is further refining their product and unfortunately, what I had already mentioned in my K23 post is becoming more and more true. From being the platform of platforms where you can integrate multiple systems across employee or process journeys while keeping the actual underlying systems in charge, ServiceNow is now heavily focusing on being the only platform, the only interface you see as an end-user. This means that any service is to be integrated and overlayed by ServiceNow and then brought back into the actual application where the data or process is run. I don’t think that this is the right approach and I am not sure who is able to follow such approach outside ServiceNow as a company. You would need 100s of ServiceNow developers to make this happen and to keep it going – and what is the value add? Yes, you will have one coherent UX/ UI across all of your systems for end-users. But what is the price you pay? – you have to pay for all systems anyway, you have to get more support and maintenance staff and, and this is one of my main concerns: You lose flexibility and agility. You will never be able to quickly adapt a new feature from any of your underlying systems because you always have to also update your top ServiceNow layer. 

I believe that you need to reduce the variance of UX/ UIs you expose your end users to – but I also think that in their private lives people can deal with two or three different Apps and interfaces. Of course, these interfaces must be of high quality and straight forward to be used for end-users. But the difference of approach is that if these interfaces are not where you need them to be, you attack the root-cause and work with the system partner to fix this and improve the UX/ UI. I do not believe in plasters (vs. fixing the root-cause) and placing ServiceNow as the only end-user interface on top of your other applications is a plaster and nothing else.

This is however, not where my concerns with ServiceNow end. As some of you have probably seen, ServiceNow is also entering new territory. They are offering “core” Talent territory solutions in the spaces of Learning, Performance Management, and Skills – and I have not heard any voice saying that they will stop at that. Now, if you want to have a one-platform solution only, you might soon be able to use ServiceNow for most of it in the Talent space – but where I am concerned is that this strategic direction will bring them into difficulties with the likes of SAP/ SuccessFactors or Workday and others. This will ultimately take the direction of a rivalry vs. a partnership between these companies – and the impact of this will be felt by us Experience and HR Tech leaders when suddenly Successfactors or Workday are no longer playing nice with ServiceNow and therefore your integrations deteriorate or require more customization. I understand that ServiceNow is looking to grow in new directions, but as a market observer as well as practitioner I am not confident that this is any good for their main customers.

Workday

And last but not least Workday. I have been quite critical about them and their AI journey recently and was looking forward to a more in-depth conversation in person at their HQ. I was not let down. We spent a good time with Dave Sohigian, Workday CTO, to talk about AI and how Workday thinks about it. I must say that I am encouraged after what I have learned that Workday has understood what is at stake and that they will accelerate in this space with a balanced strategy. I am sure that they will share more during their Workday rising conferences and I will wait to hear from them there. But in essence they are similarly looking into an open eco-system of OpenSource or best of breed LLMs they can use and apply them onto their data. This makes sense from the perspective that it is a controlled application and the data that is used is clean and structured – because it is the data of all Workday customers that opted into sharing as part of the innovation agreement. On the other hand, it is of course a limited set of data even for the size we talk about including 80% of Workday customers. Competitors are more open and are using data sources that might be less structured and more contaminated with bad data. So the question is – and I don’t yet know the answer but am looking forward to it being answered – what is better: Tons of data of good and questionable quality or great, clean data but less. What is better for the performance of these specific AI applications.

And with that, let me close today’s post and thoughts. I am looking forward to the announcements that will come our way from all the Techtember and Techtober conferences and see where the industry is going. 

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ChatGPT – another Web 3.0 hype?

I am not sure if I should even ask who hasn’t heard or read about ChatGPT. I don’t think you can escape it? Look here or here or here. It looks like another hype is exaggerated like a year ago with NFTs, the ongoing Metaverse debate or crypto/ blockchain. All of these are OUT by now. The value of NFTs in general has bottomed. With Crypto I am not sure if it has already hit bottom with the FTX scandal or if this is still to come. There is for sure still some more money to lose. And looking at the Metaverse, I know that my friend Davis has a different view (and he could be right in the long term), with the latest changes and lay offs at Microsoft and Meta’s focus on efficiency, it is clear that there is still no use case to make it a thing for the business world just yet. 

ChatGPT is different

But ChatGPT is different, apart from it being only one of the big revelations of AI lately (and see my predictions for more to come), it lays out clear use cases. It doesn’t place AI or the product at the heart, but the application of it, the solutions it can bring to real, existing problems. The not only promise but reality of efficiencies and productivity. This is what makes it so different from the Metaverse or NFTs or Blockchain which are products still in search for a problem to solve. 

And if you needed ay further proof of that, I suggest you read the blog post from Microsoft or have a look at this interview with Satya. There is no doubt, OpenAI has managed a breakthrough and started an arms race on AI. This is fascinating and fantastic – and will bring tons of new use-cases to all of us. But before looking into the future, let’s look into the today. And this is where ChatGPT can already add value.

What to do with ChatGPT

Now, looking at ChatGPT (and wider AI), what is the game changer? What makes it a productivity driver, especially in the Experience world? Well, there are multiple areas of application where it can bring big benefits. Don’t get me wrong. Of course ChatGPT isn’t an off-the-shelf plug & play solution (yet). There is still work to do and GDPR, Privacy and further questions to answer – as well as the required computing power to make it work properly. BUT the applications I can see clearly already. 

Chat directly: utilizing the ChatGPT engine with your internal knowledge base and significantly improve your chat functionality. Just imagine if your employees could reach out via Chat to answer any of their HR questions and can interact with true conversational AI, a conversation that feels almost human, is able to answer with context of the previous conversation and can surface everything your team could do as well but always ready, always on, always right. This can deflect significant traffic from your employee-supported Tier 1 Service Desk which will help to reduce costs and focus on more value added services. And at the same time, because of how big a jump this is from the current Chat engines, it will also increase the Employee Experience. So two wins in one.

Another area is the speed to market. ChatGPT can provide additional capacity and capability in your technology teams. Have a look at this video where developers just tried to see what happens if they ask ChatGPT to develop its own integration (integrates GPT-3) with ServiceNow. Check out also what Microsoft was able to achieve on GitHub with CoPilot. AI will take hard coding work off your team and provide it quickly to review and implement. Of course, it won’t be flawless, it makes mistakes. But it will learn, will improve quality – and will further accelerate the output your team can bring. This is an amazing win. 

These are just two use cases where AI, where ChatGPT can provide almost immediate value – today. This is why it is a true game changer and will have a different, more immediate future than blockchain or the Metaverse.  

Exiting times are coming our way. 2023 will be the year of AI breakthrough and true uptake. I cannot wait to see more and to bring more value of it to our businesses. 

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The anachronism of digitalizing your workforce

After a long summer break, this is my first post again. But I wasn’t all lazy – was reading and contemplating a lot, so you can expect a few more regular posts. I have also upgraded the backend of my blog and you can enjoy all posts now with full encryption and better performance.

Today, I would like to focus on a topic I haven’t spent much time on in recent posts but which I am thinking through in quiet times a lot. It is a bit of an anachronism of the digital age I have to say, but it is a real issue I see. It is about enabling your manufacturing and field sales workforce with (individual) digital services. Of course, different companies are on different waypoints at this time, but it is a topic that many of you, I am sure, can relate to.

Enabling your non-office based workforce with digital capabilities is not new, but when you want to scale it in the same way and fashion you do with your knowledge workers, it runs into a few difficulties that need to be resolved. The work set up of these employees is in most cases still fundamentally different from knowledge workers.

Digitalizing knowledge workers

Knowledge workers of today are in many of their work aspects already digital. All of them have a digital device to help them get their work done. This might be a desktop PC, a laptop or a tablet and a smartphone. There are many ways that modern technology has provided to enable them to work digitally. From an HR perspective we can easily build on these to deliver digital HR services – mainly self services for regular employees and managers. These workers also have almost everywhere easy access to print a document or to digitize a document (aka scanning). It is a ready made infrastructure for us to deliver our services. The only thing we have to think of is how to get our services delivered with a superior experience (ok, that is of course not easy but let’s continue the thought process). In addition to this basic infrastructure to utilize, we can rely on two major aspects that make it easier to digitize HR services for knowledge workers – (a) all knowledge workers have a foundational digital understanding and don’t have any barriers to using such technology as well as (b) if anything happens to the infrastructure, your IT department is on the rescue. And this is not because your self services are so important, but because knowledge workers have an almost zero productivity w/o their digital devices. All is set up in a way to minimize downtime.

Digitalizing non-office-based workers

If you now take this and apply it to your non-office-based workers, the story writes very different. In many aspects the work environment of these workers is often not digital. Of course, there are modern factories that are fully digital – but does that make every employee digital-enabled? The fundamental differences that need to be taken into account are (a) the foundational knowledge to build on, (b) the available infrastructure, and (c) the available support.

Non-office-based workers have a very different starting point into their digital journeys. They often don’t utilize “regular” computers in their every day work-life. Maybe they operate highly sophisticated machines, maybe not – in many cases, the only digital device they use is in their private life: smartphones. They don’t operate on a regular basis with PCs at work or at home and many haven’t seen a Windows screen or have utilized a physical mouse or keyboard to interact with their digital devices. So if you want to move them to digital you have to decide if you prefer to teach them (on an ongoing basis) how to interact with mouse and keyboard and PC or you meet them where they are which are touch-based smartphone interfaces with Apps. For me it is an easy decision – you always want to go the path of least friction if you want someone to do something “for you” – and let’s face it, as much as we communicate that self services empower employees and managers, this is not too true for non-office-based workers in their environments.

But once you solved that one topic, the infrastructure comes in the way. Factories were not build with self-services in mind. So having WiFi across each area, having sufficient internet speeds and places where devices for self service can be served is difficult. This is a fundamental topic that requires enablement – and in many cases HR is one of the first ones to require this, and so it is on us to get this going. – especially with the additional privacy and security requirements. You cannot just place devices in spaces that are exposed and don’t provide any privacy.

And once you solve that, the next two topics come into play: For full digital enablement you need to provide scanning and printing facilities. Both is again nothing that by default is enabled or present in a manufacturing environment. And both is again nothing that a regular non-knowledge worker uses on a regular basis. Enablement requires targeted solutioning. Printers by now are easier to enable thanks to being smart enough – a “follow-you” printing capability, enabled with the regular clocking/ entry badge is easily explained and works magic. Scanning on the other hand is not so easy. Where would the scanner be? Where would the scanner scan to? How do you enable simple & private scanning and saving/ filing of the scanned image? – this is a really difficult question. Scanning a document, then finding it, uploading it and deleting it so that the next in line doesn’t’ find it by chance is too difficult and risky. You need to enable webcam/ photo-based scanning, immediately into the App of usage/ the App that requires the upload. That is the only privacy-save way to make it happen. And let’s not forget: What are non-office-based workers used to? – phone-cameras. So this kind of approach is much easier and friction-less than teaching them utilising regular scanners.

And last but not least, the support needs to be in place. IT support needs to be reachable, on site and ready to come to the rescue when something goes wrong. – but where do you have this today still? I guess most IT helpdesks are outsourced and require you to make the effort. Just imagine this situation for a worker in a manufacturing environment. How to reach out to IT services? This is not easy to solve. Your IT helpdesk usually is focused on least human interaction as well as off-shore phone support. Your manufacturing workforce doesn’t have the time to get in touch with them (they only have small breaks before they need to return to their work – and their work is not where the digital device is, and it is not really in their interest to make it work). So either you convince your IT to have a higher on-site presence or you need to find an alternative.

Now, these are all issues and complications that can be solved – but they are not simple to be solved. I am sure many of you have faced those and hopefully solved them to enable your non-office-based workers. If not, I will provide my view on how to enable this digital journey end-to-end in my next post. Have a great week ahead!

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Embed digital transformation to invest in human relations

These days it is not that fancy anymore to call oneself HR or Human Resources. But in the end, we are still about the humans, about the employees, and I believe that this is something that should not be out of fashion at any time. Regardless what the discussion is about AI, about Automation, or about Outsourcing – people will be people and need to have a human connection – especially to HR. As you have read in one of my last posts “Do we need to rethink HR“, employees have spoken and the statistics say that the HR Experience Score has a big influence on the overall engagement and retention. This is something we should not deny. But at the same time, we must continue to bring the HR function into the 21st century and digitize the hell out of it. Is this a paradox? – No, I don’t think so and will tell you why.

Digital Mindset First

In today’s world, Digital is not only a hype or something that your IT department needs but what the whole company needs (I know, I am not the first one to call this out): a Digital Mindset first. And of course, who is better positioned to lead that change on something that is important for the whole company and each and every employee than HR?! – well, indeed, no one. But before you can actually do that, can actually be there, you have to yourself not only understand what Digital Mindset means, but also how to operationalize it daily in your day-to-day activities. Live it to share and teach it. Today, I don’t want to go into the company-wide enablement, but more into the HR focus of it.

Let’s start with a definition – what is Digital Mindset? – “A digital mindset is a set of attitudes and behaviors that enable people and organizations to see how data, algorithms, and AI open up new possibilities and to chart a path for success in a business landscape increasingly dominated by data-intensive and intelligent technologies.” (HBR article “Developing a Digital Mindset“). 

Why is it important to be Digital Mindset First?

It is for sure not easy to transform into such mindset, but it is important – in fact, I believe there is no way any HR role can be successful in the coming decade without a digital mindset first. We must be more agile and more data-savvy, must utilize more of all the information we have to provide a superior experience in all aspects of HR. In this, it doesn’t matter if you are in Operations, CoE or Business Partnering. The direction and focus might differ, but the foundational digital mindset is required in each and every aspect:

  • Business Partners need to be digital first to lead their functions into the digital first mindset and century. They need to showcase how this works in practice to “win-over” the function and make it happen. But they also need it in the ever changing and more complex HR world – without data-savviness, business partnering won’t be able to solve for the talent shortages, retention and hiring issues we slowly face (that’s right – I don’t think that what we feel and see now is in any way shape or form transitory. It will get worse with every year now.)
  • CoEs need to be digital first to move the talent practices of today into the digital age. With so much data and possibilities at hand, they need to analyze, understand and act quickly to adapt any practice to make it work better for the overall performance of the company. May that be in rewards, performance or engagement or any other talent practice
  • And last but not least, Operations – here I see even more need to be digital mindset first. Operations requires today still the biggest number of HR employees and so this area will itself feel the talent shortage heavily. To mitigate that, automation and smart datagraphs are required to reduce the manual work and requirements for “more” employees. At the same time, Operations sits at the heart of process and technology reengineering – and this by itself requires heavy digital mindset first utilization. And last, but not least, to stay true to the human relation and to “do” Employee Relationship Management, you need time and resources. Resources you will only get once you have automated the core HR Operations activities.

It will continue to stay true that HR won’t be allowed to “play” anywhere else on the enterprise agenda until the basics work flawless. You can throw resources at these foundational activities or you can be digital mindset first and find smart ways to automate, digitize and utilize artificial intelligence and like that create space for your HR Operations employees to invest in human relations and be Employee Relationship Managers. 

So what often is seen as the death of human interactions and the dehuminization of the organization in fact can and should lead to the opposite. A richer and more impactful relationship management which leads to increased engagement and performance. Digital mindset first and human relations are not opposites, but they need each other to be fully impactful in the HR function of the next decade. 

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Employee Relationship Management

I have started my train of thought in my last post referencing that we might need to reconsider what HR stands for and how we as HR best support the success of our companies. I believe we need to take a bit of a sharp turn. In recent years we have reduced our headcount and the higher the ratio of employees to HR was, the better it was – as it meant lower costs for the overall company. But this is not really where the value of HR lies. We are a back-office function, but one that needs to be more than just „service and forget“.

Understanding Marcus Buckinghams‘s research, we have a much higher share in achieving engagement and retention than what we give ourselves credit for. Employees demand us – and not really for solving their specific small administration issues – but for trust, as coach and as partner. Not only senior management, but every employee.

Now, how do we do this? – as I wrote, I don‘t think that the solution is to get back into the HR generalist ancient times, but we need to listen to our employees and the needs they have. Not because we are „Human“ Resources and it is expected, but to make sure our companies can perform and grow. Trust in HR is according to research a very important aspect of an engaged employee. This builds the business case and clearly lays out that HR needs to be more than a pure anonymous service function.

The idea of Employee Relationship Management (ERM)

But how do we do this? How can we be such a partner and coach to employees without going back to the HR generalist times? And how can we build a business case that makes economic sense and delivers more value than it costs? – my answer is Employee Relationship Management. We need to build out a new process of Employee Relationship Management.

Despite the naming, this process would not be a mirror of Customer Relationship Management, but with a similar intent. We would treat our employees as individuals that we need to serve and keep as engaged members of our organization. We don‘t want to sell them anything but we want to make sure they feel that they get from this relationship everything they came for while making sure that they stay engaged and committed to the company’s purpose and goals. It is proactive engagement management. And this can‘t be a telephone number or a chat or an AI – this needs to be a human connection and relation that we need to build. The basic idea is that this human connection would provide a trusted partner to the employee, taking care of the employee and its requirements of (career) development, connection and point of contact for this employee in case of any issues or concerns.

It is though not anything that should be seen as transactional or as rolling back self-services. Only an organized and structured self service offering will enable the financial playing field to make such ERM happen. 

The structure of ERM

So how would this look like? – It is despite the rolling back metaphors actually the next evolution of the shared service model. If you want to build such support in today‘s environment you need to make it human and efficient at the same time. It needs to be built with scale in mind. Therefore, I would not roll back anything you have in your GBS environment and continue heavily with self service and automation – and at the same time take a hard turn.

Build up an infrastructure for an Employee Relationship Management system that can hold all relevant information about your employees from career aspirations, specific future thoughts and coaching needs – similar like a CRM, but more of a Talent Management System on drugs. Next, transform your Tier 1 Service into one area that continues to take regular service calls in case self service doesn‘t work – and a second area that is actually significantly more senior, but also with language capabilities and on top with coaching capabilities. These Employee Relationship Managers will proactively reach out to their population to have check ins, coaching sessions, career conversations – to support the People Manager but also as a trusted partner for the employee that stays with the employee throughout its company-journey. 


This is of course only a rough draft of how I am envisioning the future model and I will provide more details in one of my next posts. But what do you think about ERM? Do you have something like this already in place? Have you considered it? Or do you feel that it is not adding any value?

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Do we need to rethink HR?

I had the pleasure of visiting ADPReThink last week and enjoyed a fantastic presentation by Marcus Buckingham from the ADP Research Institute. You can find his research here. He has shared his latest research about employee sentiment, engagement,  performance and retention. The new twist that I haven‘t seen before is that he also assessed an HR Experience Score which was really interesting to see and understand. I will leave it to you to read more details about it here.

The interesting outcome is that this HR Experience Score is ver strongly related to Engagement and retention – in fact, 51% of the variance of HR Experience can be explained by Engagement. This means that we are much more important as a function than we probably give us credit for. I find this an amazing finding while at the same time it makes me pause and look back to what we did with our function in the recent years.

The problem

We basically reduced ourselves into an operational arm that focuses on efficiency and effectiveness in delivering HR services and a business partnering arm that partners with senior leaders to review and define (people) strategy as well as help managers bringing this strategy into practice. – ok, we also have the CoE arm, but this one plays anyway behind the scenes and a regular employee only sees the results of this through the HR services and the business partnering.

But…what Marcus found is that in fact, employees want more than just services delivered. They look for much more in HR – and if they don‘t get this, the HR Experience is low and with it Engagement and retention. Employees want support from HR, want to have a trusted partner in HR, someone that cares about their career, well-being, performance and progress – outside the direct work environment that is manager controlled. Wow, employees want an HR person that knows and cares about them. Now that I write it, it is not so absurd. But still – did anyone consider this in recent years?

Reconsider what HR is about

This epiphany let me reconsider how we should think about HR and how we should reconsider the actual tasks we want HR delivering – and HOW we deliver these tasks. Don‘t get me wrong, I don‘t want to turn time back to the heavily staffed HR department of generalists. I still believe that these times are over. But I believe we need to reconsider a new role in our set-up. We should one more time look at other functions how they treat and care for their stakeholders, their consumers, their customers. The one that comes to my mind particularly here is sales and how they care about their customers and prospects.

ERM – Employee Relationship Management

We should install a new process of Employee Relationship Management. A process where we are not reactively delivering a service that an employee wants or has a need for, like requiring a verification letter or an update to their personal data, but a process that is part pro-active and mainly future focused. A process where we as HR create a relationship with our employees built on trust and common goals. Different from what we built in the past, we need to be again a function with a face, a function with a clear go to person for each employee. And this person should be a familiar name to the employee – and not the „next agent that is available“.
We need to change our approach and approachability. But not through installing local, F2F HR generalists that are again available for each and everything an employee wants – but something new, something different in line with our current aspiration as I believe this is a twist and not a reinvention of what we have been doing. I will talk about it more in my next post. – but what are your thoughts?

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Be invisible

With all what is going on and with everything said for 2018 and 2019 about the importance of HR and the HR agenda, let’s pause for a minute and reflect: What is important, what needs to be done – and what is HR’s job?

Don’t get me wrong, I am in full alignment with what e.g. Josh is saying about 2019. I believe that he is right and we do have some serious issues to tackle around productivity as well as around wage stagnation and income inequality. And who would disagree with the changing nature of skills requirements (which is actually always true – as the economy is changing constantly, constantly new skills are required. The only thing that changes is “which” skills are in need). I would not disagree. Where I though believe we need to be careful is to say that this is HR’s work to do.

Who is accountable for leadership and people management?

I am a proud HR practitioner, but I am also a strong believer about HR being a true back-office function. And I am not talking about HR Admin – I am talking about the core topics of Talent Management more wider People Management. Yes, HR needs to set the agenda, tone and strategy when it comes to these topics, but HR is not the one to own or execute this. It is each and every People Manager, starting with the CEO and not stopping before the last People Manager in the organization. HR is there to support, educate, coach – but not to own and execute the People Agenda. This is often mis-understood – and I know that we as HR professionals feel more important and proud if we actually are at the fore-front of these topics. But we are a small function and cannot and should not own these topics. It is for us to be the invisible master-minds and conductors of the People Agenda, with the emphasise on “invisible”. Let’s not be in the way, let’s not be too visible, but lead from behind.

Be invisible

Leading from behind also means to me to not be in the way, but to enable the People Agenda. Let’s not come up with new policies or police our People Managers how to be People Managers – coach and enable them to do the right things the right way because they understand and believe, not because they “have to”. No one likes HR policies – not even HR, and so let’s do away with them as much as possible. And also, let’s stop being the People police and hand this over to our People Managers. Only if they own the People Agenda, HR can be successful. This is what we need to do, this is what will make us successful and will make the organization successful. And so, as much as I agree with our core topics for 2019, let’s be clear: It is on us to enable and coach, but not to own these topics. We and with us the organization will only be successful if each and every People Managers owns these topics and holds them true every day.

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What's on for HR in 2019

A new year has started – it is still fresh, and so let’s look at it from the perspective of HR. I know, I am not the first one to do so, but have my fair opinion to share.

2018 as a year in not only HR but our global economy was a difficult one – but all in all successful. It was though already impacted by recession signs and negative policies (e.g. tariffs, beginning trade wars, etc.). 2019 will see, I am certain, unfortunately much more of this. The US will move on further with their “America first” policy, and important countries like Brazil and Italy with their new right-wing governments will have another hit at our economy. Also, the current economic upswing is already lasting for almost 10 years. This is a crazy long time, so let’s get ready for a correction.

During economic corrections, the work of HR is a not so nice one. It is about lay-offs and cost-cutting. And as much as these topics are not sexy, it is important “how” we handle them as HR professionals. – it is our imperative to make these typical recession steps not about the recession, but about the next upswing. We are setting the stage for the next growth (or not).

(1) Be smart about cost-cutting

Very often, we are asked to cut down on all HR costs – regardless what they are. We need to be smart here and ensure that cost cutting does not hurt the long-term strategy and success of the company. Don’t cut to harsh into development of your people as they are the key to future success. Recession is the time of investment to be ready for the next upswing. This is counterintuitive, especially when you talk to your CFO – but if we in HR are not taking care about future readiness, no one will.
Recruiting is the next typical cost cutter: Hiring freeze. Don’t go there. This will hurt your employer brand and people won’t apply at your company anymore. In a recession, smart talent is more available and easier to recruit than in any other time. Keep your doors open and get the right talent in to make the next upswing (don’t wait for it to come to you, M A K E it).

(2) Utilize the opportunity to refresh (the right way)

I am sure that you had already analysed what is going well and what is not going well in your organization. But it is hard to persuade colleagues when things go well. But now the time has come to make bold moves, to change structures and re-organize, if required to transform. Let’s set this up for new success.

(3) Ensure that the tone is set in the right way

Be sure to set a positive tone throughout any action. Make sure it is not about “surviving the recession” but about “setting up for success”. It is important to keep morale and trust high in these times – especially to keep your key-talent on board. They will be the first ones to leave, keep them and place them in charge of success. The messaging is at least as important as the actual actions you take.

I strongly believe that these are our HR imperatives most likely needed for 2019. We need to understand the situation and of course support what is needed and right to do – but if we as HR are not taking care about setting up for the future, not sure who will. Recessions are huge opportunities to be even more successful. This is what needs to be understood. They are not a threat. – regardless of what others say. Let’s be the architect of the future – once again – and see 2019 as a huge opportunity.

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Digitalisation of the workplace – further differentiating our workforce…and society

The future is bright and shiny – AI, RPA, IoT will make our lives easier and will help us getting into a more balanced way of work and life. – does that sound familiar? Right! The same claims were made with the introduction of computers into our (work-) lives and later with the online economy. And what was the result of both? – you know it: even more work and less freedom for those who still had a job – and an even more growing number of people w/o jobs. Sure, each revolution has also created new jobs – but not for everyone. Each revolution created jobs for a smaller and smaller talent pool. Why? – the skills, the requirements, the capacity one needed to have to fulfill these new jobs were more and more difficult to have or build. Many employees were just not able anymore to learn these new skills or to even think in the new categories that these new business models required.
At first – during the early revolutions, this was dealt with by early retirements – but this gets more and more difficult as employees need to work longer to be able to have a life as retirees, as well as there is a growing number of middle-aged employees too far away from retirement that cannot meet the requirements.
Don’t get me wrong – I am all in for the digitalisation of the workplace. I am a big fan of digitalisation and the chances it opens up at the workplace (and in private lives). But we need to change the way we handle the implementation of such revolutions.
In the past, businesses, the econcomy as a whole had always the same reaction: “Way we work”-revolutions led to new employees that can fulfill the demands of faster and more (let’s face it – besides many great outcomes, the recurring theme is that with each new revolution, workload increased, turn-around times decreased) while many old employees were squeezed out (and old not necessarily being used for age, but for long-standing). Companies used the easy way out. The pool was big enough and the outcry of the ones squeezed out was sufficiently small. Now, my thesis is that we are reaching an inflection point where this way of working – the way we actually do business is coming to an end.
Let me tell you why:
(1) More and more western countries are starting to have social uproars, to a great extent due to rising unemployment and increased social jealousy – the haves and the have-nots
(2) Even the part of the population that still has a job (the “Haves”) is struggling – struggling because of workload, increasing speed and required new skills.
(3) Job related illnesses that are psychological/ mental nature are raising and have surpassed physical illnesses (see here). Psychological triggered missed-work-days are having a higher negative impact in companies than physical triggered missed-days.
The next revolution of digitilization is quickly approaching and the populare opinion on what needs to happen is the usual: work faster, build up new skills. Problem is: Humans are NOT bots, cannot just as easily be reprogrammed or get a new, father processor. As after each work-revolution there will be loosers – just that this time I am afraid the added loosers will bring the system to the tilting point. The part of the workforce that will still be able to follow and be the winners of each revolution will be too small to stabilize the system – a system where the average age of employees in western countries is rising. And with rising age, adaptability and speed are decreasing – this is fact. Another key message from last years INSEAD “The Global Talent Competitiveness Index” reads “Low-skilled workers continue to be replaced by robots, while knowledge workers are displaced by algorithms”  (see here for the detailed analysis of our global workforce). – another group of losers. Also, just look in many of today’s boardrooms (and let’s leave the Silicon Valley out for a moment) – how many boardmembers are truly immersed in today’s ways of working? Social Collaboration, Social Media, “Appinization” – these are for many of them interesting concepts, but that is it. There is still a very large number of senior leaders that ask there assistants to “print their emails” so that they can “reply”. And they are supposed to lead us into the next revolution? – but this is a different story for a different post…
My statement is that we need to drastically change the way we do business from “employees that serve the company” to “companies that serve the society”. The solution is not to stop the future (although this is currently very much a popular theme in Trump-America), the solution is though to actively shape the future in a way that it serves society – and I mean each and every member of it. And not how we did it in recent industrial-revolutions: In a way that it serves the Shareholder alone. We must understand this now – or we will face the consequences of the path we are on – and although I am repeating myself, the signs are more evident than ever: Brexit, Trump-America, Alt-Right and other popular extremists on the rise.

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The societal impact: Shared Services 4.0

One of the big themes and big discussions today is Industry 4.0 – what is meant is the next industrial revolution via IoT (Internet of Things) and further integration, communication and automation of machines. You can read more about it here. It will for sure have another big impact on worklife, culture and society.
What I would like to talk about today though is Shared Services 4.0 – which I believe is going down a similar route like Industry 4.0 – and therefore the same naming convention 😉
Shared Services 1.0 – 3.0
When you think about Shared Services from its origins in the early 90ies till now, it was about the following themes:

  • Process standardization
  • Process rationalization
  • Self-services
  • Near- or off-shoring of work

And subsequent near- or off-shoring of jobs. Because of Shared Services, many former colleagues in HR (or in any other (back-office) function) have lost their job, were in need to find a new job. Some of these colleagues had luck and found a new job – some of them for longer, many of them for short periods only. Why that? – quite frankly it was not one company that implemented Shared Services, but many – and with it 10.000s of jobs, all the same kind of jobs were near- or offshored. And only some former employees of these jobs understood it right and found their work-future in upskilling towards jobs that could not (at least for a period of time) get near- or offshored. A big majority though did either not understand that “rule” of life-long learning or – and no offense – were not capable to perform the next higher-level job. These former colleagues have lost contact and access to their job market – they are the lost people of globalization, being not unhappy anymore, but angry – don’t see any perspective other than turning back time. And as we all know, you actually cannot turn time back (at least not yet ;)) – and even if, there are sufficient people that don’t want to do that. In any case though, there are winners and lost people that now rather fight against each other than try to repair what has been damaged for the greater good of all.
If you think in broader terms though and at a global scale, you must admit that the majority of the jobs were not made redundant, they were just relocated. And so, the Shared Service economy has born new winners – countries like India, Costa Rica, the Philippines, a big portion of the Eastern European countries have “received” 1000s of jobs and with it managed to catch up with western countries, created new middle classes and brought young people into great starting jobs – with big potential for international careers.
Shared Services 4.0
The new waves of innovation and thinking in the shared services industry though will have different effects. Nothing will really change with the losers of the first waves – except that the distance between their knowledge and capabilities and the job requirements is growing. It is more and more unlikely that these former colleagues find a new job similar to their old one – they either stay unemployed or go for 2-3 parttime jobs which still cannot feed their family at home.
What is worse though is that the winners of waves 1.0-3.0 will turn into losers as well. – and the upskiled colleagues from the first rounds will lose their jobs, too. RPA and AI are the keywords.
Robot Process Automation (RPA) will slowly but surely eat away the lower qualified jobs in Shared Service Centers. Robots are getting sufficiently smart to execute without break, without mistake most of the standardized work within centers. Recent studies show that by now 80% and more of standardized work can be transfered to bots. And in turn, 80% of new colleagues will lose their jobs.
But it does not stop with RPA – AI, the next evolution is already on its way. Today mostly too expensive to replace low-cost country colleagues, but tomorrow (and it is almost literally tomorrow) this will change and not only standardized work will get automated but even more complex work where situational assessment and decision making are required. I know that most of the readers cannot wait to have AI in their life – me, too – but in their private lives, not at work. At work, this will lead to the next “let go” of colleagues – now though again in both western countries as well as low-cost countries. New losers of globalization are created.
 
Of course, this is great for the bottom-line of a company’s balance sheet and maybe for its Shareholders. But what about the rest of the country? rest of the world? – it will only further grow the difference and distance between the “haves” and “have nots” and it will further spur societal conflicts that are already on the horizon – or already in our lives like Trump and Brexit.
It is on us to change this, it is on us to make sure that we take everyone with us on that journey. Again, it is not the solution to stop time, but it is time to stop spreading the difference between winners and losers, generating more losers than winners. It is on us – we in HR are the ones closest to our workforces. We need to listen and come up with a plan.