Phase 1 Research 2007-2010
The original 15 sponsors and CPHR academics have worked collaboratively over the past 5 years to tackle and resolve issues in the areas of HR strategy, talent management, employee engagement, innovation, customer centricity and organisational design.
In the first phase of research the agenda for the Centre has been focused on ways to enhance the experience of the UK’s work force and the productivity and performance of both employees and HR functions. We believe that this is a central issue for innovation and growth in UK businesses. The Centre has undertaken projects that have a performance connotation, either by including hard performance data or by focusing on key processes and capabilities considered central to performance, and projects which take into account what line managers and employees see as being important and how HR functions can respond to this.
The informal and open discussions between the HR Directors have been informative and beneficial to all. The results have culminated in the White Paper Series and into the production of the Leading HR book, where several of the HR Directors are authors and more importantly the production of material which is relevant and useful to practitioners.
The research has shown that HR functions have to address the operational challenges faced by organisations, be able to contribute to strategic thinking and identify the long-term performance issues that confront workforces and organisations and provide guidance on the best way forward. To address this, Phase 1 of the Centre’s research investigated the following key areas:
1. Strategic competence: building the capabilities to formulate and execute strategy.
2. Boardroom engagement: bringing HR issues to the top table.
3. Business model change: redesigning the architecture used to deliver the strategy.
4. The employee engagement-performance link: evidencing the impact of people management on the business.
5. Evaluating and benchmarking how people improve the capital of an organisation.
6. HR trajectories: future patterns of HR structures, sourcing, and technology.
Strategic Competence
The first question within our mission concerned what is necessary to ensure that an organisation is “strategically competent”. Strategic competence requires the ability of organisations (and their members) to acquire, store, recall, interpret and action upon information of relevance to the longer-term survival and well-being of the organisation. A central skill underpinning strategic competence is the ability to proactively shape the thought processes of others. Organisations currently face what the strategists call a period of hyper-competition. Business models are evolving rapidly. New forms of competition are entering many sectors. The ability to sustain a competitive advantage is becoming ever-shorter term. For HR Directors, this means that if they are to help engage their function, they have to understand how organisations strategise in practice, so that they can find openings and opportunities to add their unique insights to the strategy and change management process. Strategic competence involves understanding how individuals, teams and important stakeholders all develop strategy, resourcing the organisation with the capabilities to manage this, and then building the appropriate organisational design that allow people to use these capabilities to their best.
The work undertaken by the Centre has provided new theoretical insights through which to understand the competency requirements necessary to improve working practices and enhance individual and organisational effectiveness; the White Papers Reversing the Arrow, Integrated Organisation Design and HR Delivery Systems specifically address these issues.
Boardroom engagement
The Centre has investigated the impact of HR influence within the boardroom, showing that HR leadership is essential when trying to enable the delivery of organisational performance and influence the strategic implementation of the business. Research into the Golden Triangle; the relationship between HR Directors, their Chief Executive Officers and their Finance Directors can affect organisational performance. Investigations into how CEOs and CFOs understand the people aspects of their strategy and how HR can enable this understanding have been undertaken and are summarised in the White Papers: Reversing the Arrow and The Golden Triangle.
Business model change
The Centre research team has recently investigated performance in terms of what it means for organisational effectiveness and the importance of alignment between business models and the people management process. Developing ‘navigation kits’ that help both boards and HR directors see their way through the issues that are involved when they might have to reposition the organisation in times of business model change have proven to be beneficial in the Executive Masterclasses and is summarised in the White Paper HR Delivery Systems. Additionally the Centre has concentrated on linking employee engagement through outcomes that connect the strategy to actual performance and the reconfiguring of the management of talent. The research states that these two tasks are highly interconnected: talent provides the leadership through which employees can be engaged and engaged employees provide the opportunity for talent to blossom. This is detailed in the Engaged to Perform and the Talent Management White Papers.
Linking trust and engagement to performance
Centre researchers have investigated, and summarised in the Engaged to Perform White Paper, whether or not there is robust evidence for the often-assumed link between employee engagement, service and profit. Employee engagement is seen as a positive thing, although identifying its impact is often difficult. The Centre researchers have created tools and techniques to help identify its impact and have shown that beyond the short-term measurement of positive attitudes, the sort of authenticity of relationship needed to ensure effective execution of new business models and high levels of employee engagement requires much deeper levels of trust and empowerment.
Evaluating and benchmarking how people improve the capital of an organisation
Centre researchers have investigated how HR can identify the issues facing its people and how, if at all, the business contribution, positive or otherwise, can be narrated on an annual basis. The need to demonstrate performance gains and thus evaluation of such is an important issue, especially as HR metrics are of limited use if they don’t tap into the issues that strategic actors believe are important to business processes. HR metrics are reaching a new level of maturity, having passed through simple process identification and mapping, comparative analysis, through to immature models of causality, such as scorecards. A new area of metrics incorporating deeper and more sophisticated analyses of metrics is now upon us. The White Papers from the Centre map out the strategy, HR thought process and detail what questions need to be addressed to link the actions of people to the performance of business.
HR trajectories
Recently HR has had to evolve rapidly. It has to cope with changing technology and the ways in which HR services may be resourced but questions about how this will alter in the future has been investigated by the Centre. Centre researchers have hypothesised in the Leading HR book what top-performing HR functions will look like a decade from now, what the central sourcing and delivery mechanisms of its HR services and workforce planning models will look like, what the expectations of HR from the wider workforce will look like and how HR will meet these demands and if the HR business partner will become a business “sourcing partner” or act as a “people partner”. The use of technology for HR services has standardised the people management process with many multi-national and multi-faceted public sector organisations centralising their HR functions in an attempt to realise overall control and economies.
Phase 2 Research 2010-2011
In Phase 2 of the original research collaboration, running from 2010 to 2011, attention has been turned to questions of long-term and sustainable performance. The focus is on three main areas:
1. Understanding the people and organisation issues associated with performance drivers such as innovation, customer centricity and globalisation.
2. Changing the way that talent is managed.
3. Building organisation learning into the HR agenda.
Performance drivers: globalisation, innovation, customer centricity, productivity
Globalisation is one of the important drivers of performance. At the industry level it has led to new forms international competition, new cost drivers and pressures for product or service standardisation, and it has raised questions about the best location of value-adding activities. Globalisation is also requiring organisations to develop new capabilities –internal processes, systems and management practices - to meet customer needs and to direct both the skills and efforts of their employees towards achieving global goals. However, globalisation occurs at the level of the function, rather than the organisation. HR functions are seeking to co-ordinate and develop linkages between geographically dispersed units, and control these units by regulating and aligning their activities. Performance can only be delivered through different mechanisms of people and information management, a new balance between formalisation or centralisation versus localisation, new organisation designs and the development of new attitudinal orientations and mindsets in the organisation. Whether the driver is globalisation, innovation, productivity or customer service, HR has to reverse its thought process. The field of HR has concentrated on trying to identify practices that might lead to performance, using an organisational model of transformational, transactional and business partnering HR as its starting point. These solutions are too simple in the face of the strategic complexity now faced by organisations. People management needs to start by looking at the important performance outcomes that its customers expect – or that the strategy demands – and design people management inside the organisation in ways that deliver this. The performance outcomes that matter are innovation and growth in the business, world class productivity and efficiency, customer service levels that deliver sustained profitability and sustained brand value. The building of organisation reputation and the mitigation of risk, drive the attention of senior managers. Against this growing emphasis on the importance of customer service and its world-class execution has also grown the notion of a new performance mindset amongst those who develop strategy - a mindset capable of unlocking rich revenue streams through new innovative techniques. HR can make a contribution to new and increasingly important business strategies of innovation, customer service, and entrepreneurship and this is summarised in the White Papers; The Innovation Imperative and Customer Centricity.
Changing the way that talent is managed
The new challenges around talent are still about finding and keeping the best talent, but they are also now accompanied by the need to build and continuously reconfigure the “talent architectures” (the systems, processes and toolkits used by the organisation) so that they mirror the strategy of the boardroom. The Centre’s research to date, detailed in the Talent Management. White Paper, has investigated which talent architectures best drive business performance, what models can be used to evaluate the impact of these architectures and how to assess talent – what is focused on – also depends on how performance is viewed. Talent management systems have to be designed to manage human capital, social and political capital, intellectual capital, customer capital – and so forth and in today’s world employees expect and only respond to an employment relationship that helps them build not just their employability but also their self-worth. Centre research has shown that careers are individualising, and talent management has to take into account the importance of the work-life balance.
Building organisational learning into the HR agenda
Central to the challenges facing organisations as they recover from recession and build a more sustainable basis for performance is the issue of organisational learning. Many organisations have strategic plans that involve the need to build new capabilities, often with that capability being mentioned for the first time. They have to look to the future, but be mindful of the past. Learning and development becomes an important issue once more. Crucial to strategic responsiveness in these turbulent times is the organisation’s capacity to learn and renew itself. A strategically competent organisation – and a strategically competent HR function - has to be agile, open to the environment, capable of picking up those weak signals indicative of the need for change, which are then selected, filtered, stored, recalled and interpreted in a fashion that enables the organisation to respond as appropriate. HR has to help the organisation proactively develop new competencies and stake out new strategic territories. If it can not, then the near future is one where organisations will respond reactively in an ever-viscous circle, which at best will enable them to simply defend existing markets, products and/or services in a more and more threatening and risk-laden environment.
