Josh Bersin: HR Must Embrace Less Hierarchy, More Agility
It’s time to shed old hierarchical models of human resource management that were founded in the 1930s and 1940s during the industrial revolution. Instead, says Josh Bersin, Principal and Founder of Bersin by Deloitte, more agile approaches are needed.
Hierarchical approaches worked great for industrial organizations ― automobile manufacturers and steel companies, for example ― that won business by scaling efficiencies to sell more at lower costs, Bersin notes. But those models no longer work for many of today’s businesses that require fluid team structures and less span of control.
"Today, what really makes companies successful, is something we call scalable learning," he notes in the podcast. Hierarchical structures, with too many layers of approval, impede fast learning, iteration, innovation and the ability to get closer to customers.
"That’s the old way of doing it and it just doesn’t scale anymore. Companies have realized that even though they look like a hierarchy on the org chart, work is getting done in dynamic teams," Bersin says. Organizations must adopt new HR tools and practices, including the restructuring of performance management practices and reward systems, "that support this new structure of how our organizations work. And it has to be much, much more agile."
Reduced Span of Control
Managers often fight span of control issues and object when people are taken off their teams to work on other projects. Every time a CEO needs to solve a new challenge, they must "go through an enormously complex political process to get people to work on it," Bersin says.
One CEO, he notes, solved this issue by getting rid of the VPs and putting everyone else on a project team. Instead of being led by VPs, the teams were led by subject matter experts. The result: The organization operated faster and become more innovative. Employees were happier because they had more chances to learn and grow.
"This is, essentially, an example of what’s happening at organizations, and it is happening all over the world."
Be a Solution, Not an Obstacle
Often, it is HR policies and procedures that hold back innovation and agility. One company that Bersin worked with, for example, had 27 job levels. It created a situation where employees at the company would not take on new job roles without promotions. The company had to reduce the number of job levels, change how its people were paid and take other steps to move people from project to project without feeling like they were getting behind or losing out.
"Depending on where you are in your organization’s journey, you are either part of the problem or your creating the solution. Most organizations are obliterating the org chart before our eyes and creating more agile teams."
In the podcast, Bersin discusses other ways HR can embrace innovation and agility by working more closely with teams to create better organizational structures. Bersin also addresses new ways to think about performance management and organizational data, and the importance of continuous learning and experimentation.
"We in HR . . . have to become productivity experts," Bersin concludes. "We have to look at how work is getting done, with an open mind, and educate business people and help them reorganize work and teams around the best way to get work done."
This is the future. Every company will get there are a different pace. GE, IBM.
“The performance management process will either help or hurt this problem.” If your goals are only updated once a year, working for different managers and different projects, but not paid or compensated correctly, that is a problem.
"One of the reasons there is so much energy going into performance management is because the traditional performance management practices that many companies have are also getting in the way of people operating in a more agile environment.”
Must reinvent around this new way of working.
“We in HR . . . we have to become productivity experts. We have to look at how work is getting done, with an open mind, and educate business people and help them reorganize work and teams around the best way to get work done.
That’s not the same as doing spans and layers analysis. It’s a whole different idea.
One technique, for example, “that is really powerful,” is organizational network analysis. You study projects that succeed and those that fail to “determine what happened. What did they do differently? How did they work together? Who did they talk to? What parts of the organization did they communicate with?
“Companies that have done that kind of work have just discovered incredible things about their organizations.”
Teams that succeed have better relationships, more direct connections and more inter-departmental talent mobility. The teams that operated in silos did not succeed (GM).
“If you do that kind of work in HR and you study those kinds of things you’re going to be armed with all sorts of tools on how to help business leaders redesign their organizations to be more effective. It isn’t just reading a book . . . it’s really about looking at how your company works, what’s working and what’s not.”
Data: “I wouldn’t call it HR data. The world of HR is filled with data. The data that we happen to have access to is really organizational data. Data about HR – how much money we’re spending on training and so forth – is not that interesting.”
This is not what business leaders are interested in. What they are interested in is why high turnover in this part of the sales organization and not that part? Why is this team hitting its quota and that one is not? Why does this manufacturing plant have a high defect rate three times the other?
“What I would recommend that any HR professional do is get your hands on the business data that the business people are using, and get under the covers and try to help them figure out why things are happening that they want to fix and the people piece behind that. That’s really where analytics is going.”
“We’ve had 10 or 15 years of trying to compute the ROI of training and it’s not that interesting to the business people. What they want to know is why aren’t we hitting our numbers, or why are we over-achieving in certain areas.”
To do, HR needs two things;
One, become comfortable with data, including the basics of statistics, mean, median, etc., so you’re not intimidated by it.
Two, have some business acumen and getting into the business and looking at the metrics used to run the business and how you can contribute with HR data to those metrics.
India telecom company, fast growing, launched new products and services. CEO’s goal is activation of new client services. New customer activation. To do had to hire a bunch of people. So which stores are behind on hiring numbers and why? What’s wrong with the talent pipeline?
The CEO cares about that, because the talent pipeline contributes to his goal of customer activation. He doesn’t care about the ROI of the social media program in HR unless it relates to that
“If you take that kind of perspective, you’re going to be invited right into the seat at the table of the business leaders who are running the business, and contribute to them. The tricky part of that is we have to have access to the HR data. If your HR systems are a mess and it takes you three months to get the data, forget it, you’re going to be too late. The real problem we’ve had the last couple of years, and this is becoming better . . . is implementing the right technology so that when the question comes up I can find the data and I’m comfortable with it, and I’m reasonably sure it’s accurate.”
"That’s why analytics is a very long-term investment in HR. We have to get credible, reliable data.”
He estimates only 15-20 percent of companies doing this. If haven’t done yet, in trouble, because will determine how to allocate resources, how to pay people, where to move people from place to place.
“If you think of yourself as a business person trying to solve a business problem and unlocking what is the people data that I could bring to the table to help that decision, you’ll be a superstar.
One. Take this issue of culture seriously. Almost all challenges, “somehow related to culture. We can’t do that in HR without the business execs . . . involved.
“Figure out where your culture is strong and weak and whether your culture is pointing in the direction that the organization wants to go.”
Even more important if merger or acquisition. “That will be the issue that will typically make or break an acquisition, and every decision you make about your HR practices and your talent practices has to be colored by the culture.
The topic of culture moving into employee experience, engagement levels, how to make better.
As get involved in culture, will get involved in employee listening, pulse surveys, etc.
Two. “Whether you like it or not, you have to clean up your HR technology, and it is a hard thing to do.”
Complex, many tools, many compelling vendors, hard to pick right one, need a consultant to help
“More and more of the decisions you’re going to be asked to make are dependent upon data and the technical, digital experience your delivering to employees. Young people social media – not going to look good.
“The new world of HR technology is focused on what we call Digital HR, it’s more focused on apps and user experience and less focused on back-end systems.”
Three. “Recognize the fact that being in the HR profession demands that you and your team are continuously learning and experimenting.”
In early 2000 much of what HR did came out of a book. “If you just copy what’s in the book you’re going to be OK. That’s actually not true anymore.”
Too many new innovations in way we work, 5 generations in workforce, always on work experience, growing contingent workers and part time, “a lot of the talent practices that you might have copied out of a book aren’t in books anymore. They’re being invented.”
You have to take some percentage of your day, your week or your month and educate yourself, benchmark yourself, talk to other companies, go to trade shows, get HRCI certified, use top employers, to make sure you’re current. The domain is changing very fast and a lot of the best ideas you have are going to be your own innovation. Your not necessarily going to be able to copy what somebody like GE or Google did. You need to come up with your own ideas. Being innovative and creative is part of success in HR today.