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THE FUTURE OF HR?. Dr. Peter Saul Director, Strategic Consulting Group Paper presented to: Macquarie Graduate School of Management’s “People Management and Leadership Conference” September 16-19, 2001. FROM Local markets, operations Manufacturing, clerical work Hierarchy

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the future of hr

THE FUTURE OF HR?

Dr. Peter Saul

Director, Strategic Consulting Group

Paper presented to:

Macquarie Graduate School of Management’s

“People Management and Leadership Conference”

September 16-19, 2001

shifts that are re shaping hr roles
FROM

Local markets, operations

Manufacturing, clerical work

Hierarchy

Intermediaries; face-to-face

Obedience to formal authority

Stability, efficiency, control

Full time job

Customer service

Work done by employees

Fixed work location

Management prerogative

Loyal service

White, male workforce

Financial performance

“Get a job”

TO

Global markets, operations

Service, knowledge work

Networks

Direct access,virtual relationship

Questioning of formal authority

Change, creativity, flexibility, order

Part-time and project work

Shareholder, stakeholder value

Work done by many contributors

Diverse work locations

Social licence

Marketable knowledge, skills

Diverse workforce

Triple bottom line

“Get a life”

SHIFTS THAT ARE RE-SHAPING HR ROLES
changing worker aspirations
CHANGING WORKER ASPIRATIONS
  • RICHARD BRANSON
  • MICHAEL JORDAN
  • RICHARD BORES (Wizard Home Loans)
  • MERY STREEP AND JODIE FOSTER
  • ANITA RODDICK
  • NELSON MANDELA AND JERRY MAGUIRE

“…had a dream and went through with it...loved what he did…lives life the way he wants... created this lifestyle for herself out of what could have been a downward spiral…really inspiring”

AFR BOSS magazine, June 2001. Survey of work role models for white collar Australians, in 20-30 years age range.

hr at a crossroads
HR AT A CROSSROADS

Results of a forum on the "The State of the HR Profession"

held in conjunction with the 2001 Annual Conference of the Society for Human Resource Management

  • “Significant change is inevitable for HR” but “what HR will be and do is not yet clear”
  • SRHM is doing research to develop a vision for the future of HR and a profile of the future HR practitioner
  • An HR practitioner might be "a hybrid line manager" who is "first and foremost a business executive" but has expertise in at least one HR function. SHRM President and CEO, Helen Drinan
  • “We have to get management to understand that they're responsible for people” AND “If we do our job—and work ourselves out of a job—so be it."

Also see FT.com online forum on “Human Resources: A career in crisis?”

emerging legal issues at work
EMERGING LEGAL ISSUES AT WORK
  • NEW TECHNOLOGY ISSUES
  • AGE CONSCIOUSNESS IN THE WORKPLACE
  • GLOBALISATION OF EMPLOYMENT LAW
  • TRAINING FOR LEGAL COMPLIANCE
  • WORKPLACE SAFETY

Source: Garry Mathiason (Littler, Mendelson, Fastiff, Tichy & Mathiason) SHRM Annual Conference June 2001. Results of survey of 400 employment attorneys

hr executives view of the future
TOP 5 BUSINESS CHALLENGES

Developing new markets

Improving profitability

Market share growth

Becoming the recognised global market leader

Building shareholder value

TOP 3 HR CHALLENGES

Attracting and retaining talented people

Improving organisational capabilities

Developing leadership skills

?

HR EXECUTIVES’ VIEW OF THE FUTURE

Source: Arthur Andersen survey of HR Executives in almost 70 Australian-based firms

Reported in HR Monthly, August 2001, p.17

the bad and the ugly in hr
“The bad and the ugly in HR”
  • “Many HR people still lack business acumen”
  • “We have not adequately managed high expectations of HR”
  • “There’s too much modeling of mediocrity… and way too little real research going on”
  • “We have overhyped e-learning and some other fads”
  • “We do much order-taking… and mistaking talk for action”Jim Moore, former Director of Workforce Development at Sun Microsystems in his address to the 2001 SHRM Annual Conference
slide8
Q.So, how do we organise all the shifts, trends, speculation and forecasts into a framework that can guide fruitful conversations between, and strategic decision making by, senior line managers and HR professionals?

A. Scenarios is one way

four australian scenarios
FOUR AUSTRALIAN SCENARIOS

“FIRST GLOBAL NATION”

Australia capitalises on globalisation; promotes its internal diversity and ethnic tolerance; and boosts home-grown innovation and industry capability

“SOUND THE RETREAT!”

Globalisation stalls as political and social structures are not ready; trade barriers and nationalism re-emerge; we depend on bilateral national and commercial relationships

“BRAVE OLD WORLD”

Complacent, dependent on agriculture, tourism, “new” manufacturing and some biotech; clever people and companies move overseas

“GREEN IS GOLD”

We emerge from the growing imperative to protect the natural environment as a leading innovator of global environmental management

Source: Australian Business Foundation “Alternative Futures: Scenarios for

Business in Australia to the Year 2015” Sept 1999

defence in the box scenario matrix
DEFENCE: ‘In the Box’ Scenario Matrix

Open globalised world economy

Global middle class

Social polarisation and exclusion

Closed protectionist world economy

Source: Hardin Tibbs report to Australian Defence HQ 1999

defence way out of the box scenario matrix
DEFENCE: ‘Way Out of the Box’ Scenario Matrix

Revolution in basic science

Single

world government

Social progress with no discontinuity

Psycho-social evolutionary

punctuation

Discontinuity in human consciousness

Science reaches a plateau

Source: Hardin Tibbs report to Australian Defence HQ 1999

two scenarios of the 21st century organisation
TWO SCENARIOS OF THE 21ST CENTURY ORGANISATION

MIT Initiative on Inventing the Organizations of the 21st Century (January 1997) facilitated by Peter Schwartz of the Global Business Network:-

http://ccs.mit.edu/21c/21CWP001.html

The scenarios were developed during 1994-1997 by MIT academic and research staff in discussions with hundreds of executives at various MIT Symposia, executive education programs, etc.

future of organisations scenario 1
FUTURE OF ORGANISATIONS: Scenario 1

SMALL COMPANIES,LARGE NETWORKS

  • Autonomous teams of 1-10 people
  • Temporary - task or project based
  • Linked by high bandwidth, electronic network
  • Venture capital infrastructure identifies promising teams and provides financing
  • Independent organisations for social networking, recreation, learning,reputation building and income smoothing
    • evolved from professional associations, unions, clubs, university alumnis, neighbourhoods, families, churches
    • they are home for our identity as projects come and go

Examples: Film industry; Prato Mills (Italy); Nike; Nokia PC Display Division

small company large network hr
Small Company, Large Network HR
  • Very specific HR scope focused on project organisation (e.g. talent scouting/selection, pay, health & safety)
  • Outsourced
    • agents, brokers, specialist providers
    • contract staff organisations handle the HR for their talent as part of their brand and competitive strategy
  • Mutual employment obligations spelled out in project contracts
    • or implicit in industry standards
    • or assumed from past working experience
  • Project Manager’s reputation depends on his/her people skills and hence there is a reluctance to delegate to HR specialists
small company large network hr cont
Small Company, Large Network HR (cont.)
  • Selection is via networks, personal references, reputation
  • Performance management is via peer pressure and industry/ professional standards
  • Rewards are contractual or entrepreneurial (equity based)
  • Development is via doing leading edge projects
  • Innovation is via brokers, deal makers, agents, sponsors
  • Individuals rely on professional associations, “guilds”, managers/agents
future of organisations scenario 2
FUTURE OF ORGANISATIONS: Scenario 2

VIRTUAL COUNTRIES

  • Keiretsu-like alliances with operating companies in every country
  • Minimal national allegiance - primary loyalty is to the corporation
  • Traditional hierarchy or decentralised divisional structure
  • Company is the focus for individual identity
  • Company meets employees’ needs from cradle to grave
  • Employees own the firm AND have right to elect the Board and management
  • Open book accounting informs management elections
  • Specialist “organisational designers” travel through firm brokering partnerships and fostering cross boundary communication
  • Role of governments, industry unions is significantly reduced

Examples: Asea Brown Boveri; GE; Johnson & Johnson

virtual country hr
Virtual Country HR
  • HR almost replaces social welfare, education systems and provides financial management and estate planning services, etc
  • Corporate (strategic) HR
    • sets standards and monitors the corporate culture
    • helps Marketing build the corporate brand
  • Divisional (operational) HR
    • total care of employees so they are free to focus on performance
  • Actively involved in local communities to reinforce the company culture and image
virtual country hr cont
Virtual Country HR (cont.)
  • Selection emphasises fit with corporate values
  • Performance management focuses on results achieved the “XYZ way” and on being a company ambassador in all areas of life
  • Reward is via promotion, enhanced status, rights, benefits - and pay
  • Development is via corporate colleges and universities in partnership with the world’s best educational institutions
  • Innovation is through internal R&D and improvement programs with heavy emphasis on protecting corporate intellectual property
changing hr roles some generalisations
PAST

HR ROLE WAS CLEARLY

DIFFERENTIATED

mechanistic (Personnel Admin)

ritualistic, legalistic (IR)

CEO’s eyes and ears with the troops

distinct professional career paths

HR is HR’s responsibility

FUTURE

PEOPLE/LEADERSHIP ROLE IS DISTRIBUTED AND DIFFUSE

knowledge management

relationship management; teamwork

legal compliance

change management

no distinct HR profession - new hybrid roles emerge

People/Leadership is

everyone’s responsibility

CHANGING “HR” ROLES: Some Generalisations
new criteria for rating hr
NEW CRITERIA FOR RATING “HR”?
  • Profit generated per employee (compared to industry benchmark)
  • Salary/wages costs compared to industry median (reflecting value of corporate reputation/intangibles in labour market)
  • Number of talented candidates applying for advertised (and unadvertised) vacancies
  • Time taken to satisfy customer orders, inquiries, complaints (compared to agreed service standards)
  • Incidence of customer complaints caused by employee behaviour
  • Cost of re-work
  • Cost/risk due to time lost through injuries, absences, disputes
  • Rate/cost of unplanned turnover among good performers
  • Percentage of customers citing “service quality” or “competent, caring staff” as a competitive edge for the company
  • Net cost of generating organisational improvements
  • Percentage of revenue/profits coming from initiatives taken in last 3 years
  • Share price premium compared to industry peers
an integrating story
AN INTEGRATING STORY?

OUTCOMES

(Stakeholders)Shareholder/InvestorCustomerContributor- employee

- other

Community

ARCHITECTURE

(Leadership)

VISION & MISSION

CORPORATE STRATEGY

Competitive strategy

Development strategy

Leadership style

Culture/Values/Ethics

ORGANISATIONAL DESIGN

Structure

Technology

Place

FUNCTIONS

(Management)FinanceInvestor RelationsSales & Marketing

Operations

R&D

“Contributor Relations”

Contracts (Legal)

Supply

PR

Community Relations

mapping your organisation s current trajectory
MAPPING YOUR ORGANISATION’S CURRENT TRAJECTORY

Derived from an HR framework proposed by Brian Young “PeopleFirst Solutions”

Previously Asia Pacific HR Director for Deutsche Bank

more windows into possible futures
MORE WINDOWS INTO POSSIBLE FUTURES

SOME WEB SITES ENGAGED IN THE SEARCH:

http://ccs.mit.edu/21c/index.html

http://www.foresight.gov.uk/default800.htm

http://www.defence.gov.au/nspb/htibbs-futuresV.4.ppt

http://www.dol.gov/dol/asp/public/futurework/welcome.html

http://www.fastcompany.com/

http://www.bsr.org/ and http://www.csp.uts.edu.au/

http://www-csc.mty.itesm.mx/~laava/KMetaSite/menu/sitemap.htm

http://www.managewithoutthem.com/

http://www.futurists.net.au