People and performance will be at the heart of any healthy boardroom debate. It’s one of the reasons why the Human Resources Director has such a vital role to play, as they can use their knowledge to provide insights about talent across an organisation. Without the voice of a strong HRD, businesses are going to struggle with the big questions posed by technology, changing demographics and globalisation.
These were some of the take-outs from the Criticaleye Human Resources Director Retreat, held in association with professional services firm, EY, and executive search firm, Warren Partners. Over the course of 24-hours, attendees discussed how HRDs are playing a pivotal role in helping CEOs get to grips with a new kind of labour market.
Tom McCabe, Global Leader for HR Performance Improvement at EY, said: “The diversity of the workforce has changed in terms of age range, psychological profile and nationality. We need to be better at managing this changing workforce and understanding the ways in which they will want to work.
“You will need to be able to tap into what your employees want, from the use of technology and employment contracts, to what they are looking for at a particular stage in their career.”
According to Charlie Wagstaff, Managing Director of Executive Membership for Criticaleye, the convergence of different megatrends means that “the spotlight in global businesses is firmly on the HRD as CEOs and boards grapple with the challenges posed by new technology, a multigenerational workforce and increased competition internationally”.
In practical terms, a HRD needs to be able to assist the senior leadership team in running an organisation as efficiently as possible. This can entail reskilling elements of the workforce or introducing greater automation, while trying to create a working environment which appeals to an ever-widening range of employees.
It’s why so many businesses are rethinking organisational design. Maria da Cunha, Director of People and Legal for British Airways, said: “Tech and innovation will ultimately drive the automation of more clerical duties…Going forward, there will be a slim-downed pool of employees in-house which will deliver the core offering, while off-shoring will occur to drive innovation. This will require people with different skills and the ability to orchestrate across cultures and time-zones.”
Maria added that, at BA, she has been impressed by the way employees have adopted different ways of working: “In 2010, the only people who used technology were in the back office. Now pretty much every person carries some kind of hand-held device…
“What’s been extraordinary for me is how people have really embraced the technology. We have quite a lot of older employees as well as younger ones and, when they’ve been able to see what the [technology] does, they’ve really bought into it.”
On the flipside, she warned against the dangers of employees not allowing themselves downtime, especially at the more senior level: “One of the big problems of mobile technology is to stop people working 24-7, preventing burnout. We need to be more respectful of people’s time.”
An integrated approach
Diversity was identified as a key area where HRDs can add value. John Evans, Group HRD of transportation company FirstGroup, commented: “We need to do more to create engagement in the workplace and think about individuals. I don’t see a war for talent occurring, nor do I want one – what we need is greater collaboration. We have to develop our frameworks for inclusiveness by going to schools, universities and [different] places to draw from the widest pool of talent.”
For Karen Brown, Global Chief Diversity & Inclusion Officer at agriculture concern Monsanto, “diversity should be a key driver for business [goals], customer engagement, product innovation and service”. By way of example, she explained that because the boardroom did not reflect the geographic spread of the business, especially in Latin and South America, changes were made.
“The board had no Hispanic representation and this led to the appointment of a Hispanic board member – it’s a risk to the bottom line if we don’t have people who can relate to our customers,” said Karen.
Provided there is sponsorship from within, the HRD should be best placed to tackle some of the toughest problems around the talent agenda. Joëlle Warren, Executive Chairman of Warren Partners, said: “The expectation is that HRDs will be proactively looking ahead at what the business is going to need in terms of its people… Rather than just receiving business plans and working around them, they will actually be taking part in helping [to] shape and challenge them.”
Paul Matthews, Chief Executive of UK & Europe at long-term pension, saving and investment business Standard Life, certainly values the input HR can provide: “Our HR Director is responsible for helping us actually win business. So, I [take] my HR Director out to see clients… and talk to other HRDs about our company and what we do.
“The HR Director’s business knowledge has become as critical as my Sales Director’s. I think that has made a difference in the way that the HR Director is [viewed] by the rest of the team… They are seen as somebody who is critical in helping us win business as well as being an expert on talent.”
The numbers game
When it comes to assessing the internal capabilities of an organisation, it’s evident that analytics will be increasingly important. Anthony Hesketh, Senior Lecturer at Lancaster University Management School, said: “We are trying to understand the economic value of people. They are a crucial, yet tricky, aspect when you quantify how much a business is worth.
“Demand for insight from investors will only increase as they begin to understand how critical people are to the delivery of business strategy and the operations underpinning them.”
The onus is on HR to take a longer-term and more sustainable view of capability development. “The function needs to be using data and analytics to try and get ahead of the curve, [so it] stops reacting to data and forms a more proactive people strategy to influence and align the development of capabilities to business strategy,” said Anthony.
That may require a shift in both mind and skill-set. Mike Westcott, Group HRD at energy concern National Grid, commented: “HR capabilities are often lacking. Functions are great at uncovering data but not good at critical thinking. The function needs to be upskilled in that area…
“When it comes to data and analytics, you need to know what questions you’re trying to answer, then the data and insights you draw from it will [help you] work out what you’re going to do… in the future.”
Matt Stripe, Group HRD for UK & Ireland at Nestlé, said: “The first challenge with data and analytics is about getting it from precise and reliable sources. Then we need to use the technology to inform our understanding. Finally it’s about using that to build momentum and move forward.”
Learning to lead
The style of leadership required to be successful in large organisations continues to evolve. “You have to be very careful about egos,” said Paul of Standard Life. “A team needs to be balanced; you cannot have everybody wanting to be the Chief Executive… The make-up of a team is really critical and sometimes I will sacrifice some of my best people to get the balance of the team right.”
HR can also provide input on what ‘good’ looks like in terms of the shape and mix of the top team. Liz Bingham OBE, Managing Partner of Talent for UK & Ireland at EY, commented: “HRDs have a strong role to play in trying to create a high-performing executive team. The objectivity they can bring is fundamental, especially as they don’t have an axe to grind. But they do need sponsorship if they’re going to have a voice in the room.”
Naturally, it may not be the easiest of tasks given the egos that populate boardrooms, but with the right backing HRDs can be part of that process which opens up discussions at the highest level about how to improve performance. Paul said: “The make-up of the team is really critical. You can't have people putting themselves and their teams first; if that happens, changes have to be made as I want team players not individual stars. Getting the right balance in a team is what leads to high performance.”
For Liz, it’s a case of leaders creating an environment where honest conversations can be had, where people are allowed to speak up and speak out: “It’s vital to get diverse opinions in the room; you do it because you get better answers.”
It’s evident that the question of talent looms large in global organisations. While undertaking dramatic and often systemic change, the pressure is on to simultaneously keep employees engaged and passionate about what they do. It’s put the spotlight very much on the HRD and, in many ways, it should be seen by the profession as a great opportunity to step up and make a real impact.
I hope to see you soon.