Five Invisible Forces That Changed HR
The pandemic has accelerated digital transformation across work, workforce and workplaces. HR is the function that manages this holy trinity. Five invisible forces have changed everything that we know about HR.
Before that you need to ask if you work for a Dreamer, a Unicorn, a Market Shaper or an Incumbent.
Organizations grow through four growth patterns
Stage 1: Dreamer
A handful of friends have a dream. They are excited about being able to “change the world”. They huddle around a table and pound away at their laptops. They share a pizza and wait for the funds to flow in. They make a pitch, get rejected and start the process all over again. Then they find their first customer. The customer tells them how they can make their product better. The happy customer brings in many others. The Dreamers sense that they are ready to scale up.
Stage 2: Unicorn
The investors know that customers can’t have enough of the product across the country and maybe in a few other geographies too. The funding is jumping through the alphabet soup. Series A is quickly followed by Series B, C and then some more. One day, the founder runs in waving a piece of paper. He calls for a townhall. They get the employees from every corner of the country to join in. He can barely control his excitement. He opens the townhall by saying, “We are officially a Unicorn…” For every 40 Dreamers only 1 becomes a Unicorn. <Read more>
Stage 3: Market Shapers
If you think it is hard to be a Unicorn, then being a Market Shaper is tougher. To be present in every country and manage a string of regulators and political system is when the founders realize that to become a Market Shaper, besides building the business, they need to build an organization. Investing in leadership capability, upskilling the talent is not enough to keep the employees from looking elsewhere. The culture of the organization acts like the glue that binds them all. Market Shapers change the way we live and work. These brands are embedded in our lives. They create categories that never existed before. Many market shapers are now bigger than some of the largest countries. <see this>
Graphic courtesy: Visual Capitalist
Stage 4: Incumbents
At any stage of growth, there is the danger of losing traction and becoming an incumbent. In every sector you can think of businesses that have become irrelevant. The leaders try to blame external factors as they miss growth targets every quarter. The inability to attract and retain talent is the first indicator that the rot has set in.
When every example that is shared by the leader is about the glorious past, it is possible that the organization is losing its relevance for the future.
If you want to trace the music industry through different phases, read this
Intangibles drive growth ACROSS sectors
In the industrial economy, things that could be counted and compared drove the firm’s value. A staggering 85% of market value of S&P 500 companies is in their intangible assets. <read more>
“Investment in intangible assets that underpin the knowledge or learning economy, such as intellectual property (IP), research, technology and software, and human capital, has risen inexorably over the past quarter century, and the COVID-19 pandemic appears to have accelerated this shift toward a dematerialized economy.” McKinsey
Investing in intangibles like building brands, marketing research, a diverse talent pool and training is what differentiates high growth businesses across sectors <read more>
Five invisible forces
In my own consulting practice over the last five years, I have found that a strong HR team often is the most under-the-hood growth enabler. Most leaders have been trained to focus on financial metrics, the supply chain, and sales. The new drivers need a new breed of HR leaders and business leaders who can bring out the value created by leadership, talent pools and set strong cultural norms that foster innovation, speed and agility.
In my book Dreamers and Unicorns I have described five forces that are shaping the business canvas (and HR) since the pandemic. None of the changes have sprung up overnight. The pandemic simply accelerated the shifts enough to be visible.
1. Boundaryless thinking:
The leader’s need to navigate the ecosystem in which the business operates. Whether it is the physical world or the digital, leaders now straddle both. The workplace is hybrid, as are careers. Every digital experience must be balanced by a physical fulfilment process. The customer may buy the product online, but it is a good supply chain that allows for a great customer experience. Apple designs in US, manufactures with Foxconn, sells in Germany, and files taxes in Ireland. Robert Siegel refers to this as being good at brains and brawn. This is a powerful capability to build in the organization. <Read more>
2. Managing polarities:
The top talent is not on your payroll. HR needs to create a talent strategy that thinks of the portfolio of competencies that the organization will need. Whether that competency needs to be developed in-house or brought in through gig-workers, freelancers or experts, is a choice HR must learn to offer. Being able to turn the talent portfolio from fixed costs to variable can have great impact on the profitability as well as agility of the firm. That may mean building a deep understanding of the gig-worker's psychology. (join this live chat)
3. Invest in the intangibles:
High end skills in organization design is a rare skill among HR professionals. Being able to decode the organization culture needs HR people to take a multi-disciplinary lens. Equally rare is the ability to design incentive systems and nudges that reward the right behaviors. Building a strong employer brand needs comfort in communicating across platforms as our short attention spans make us more impatient than ever. When the learning content competes with Netflix for time and attention, HR teams must build partnerships with content creators and storytellers to turn information to consumable content.
4. Understand emotions
Whether it is a Dreamer, a Unicorn, a Market Shaper or even an Incumbent, being able to build trust within the ecosystem is important. Making the talent pool diverse means going beyond LGBTQ+ and bringing diverse academic and experience profiles in the talent pool. There is no one who has not experienced the loss of a loved one, jobs, support systems and more during the pandemic. Being able to hold conversations about grief in the workplace will be expected of HR professionals. Being able to discuss social and political issues can be divisive if not handled well. HR needs to teach leaders how to handle a workforce that is hyperconnected and independent. <read more>
5. Perpetual beta:
Don’t get fooled by discussions about the “new normal” or even the “hybrid workplace” models. Work will be done by humans, algorithms and machines (H-A-M world of work). That will need a talent pool that will have to be boundaryless. Even in countries like India where taking a break in career was frowned upon, employers are having to deal with employees who want to take a break because Z-N-M-D (zindagi na milegi dobara – ask a Bollywood fan to explain that). It simply means life is too short to spend it in the workplace. Which also means the notion of the workplace will also evolve.
The true value of the HR function lies in being able to rethink their role in view of the five shifts. That also means being able to understand technology, cybersecurity, data-privacy, ethical design, content creation, social listening, ethnography, building the employer brand and much more. All this is in addition to all what HR has been expected to do about attracting, engaging and retaining talent. HR has become a function of super-specialists. This is what the HR function for the future will demand.
