Mission Impossible

first_imgRelated posts:No related photos. As newtechnology drives the role of HR and external agencies exert greater financialaccountability, HR directors are facing a heavier workload than ever. Here someexperts offer advice on how the industry must seize the chance to evolve andshape the business agenda to suit HR’s future strategy HRdirectors are always being told – or are always telling each other – to stopcomplaining and get on with it. But even the most cursory look at the way theprofession is evolving seems to indicate that many of these complaints may,after all, be justified. Inthe past five years the role has changed and broadened so much that somepundits now claim it is “impossible” to carry it out with any degree ofcomprehensibility. They liken it to asking a GP to run the entire NHS includingall the different medical specialisms, while maintaining an efficient day-to-day practice in the surgery. In a nutshell, they claim, the job has growntoo big for any individual to manage it effectively.Beforewe sanction an official day of hand-wringing, however, it’s worthwhile consideringhow difficult it is to perform any senior management role in the currentclimate, wedged as we are somewhere between what might be termed the ancienregime and the beginnings of a new, yet largely uncharted, business age whosesole defining feature is its unpredictability.Eventhe most celebrated management gurus admit the way forward is so uncertain thatthe only way to read the future, let alone the present, is to concede theimpossibility of it all. “If someone tells you they know the answer, they don’tknow the problem,” concluded CK Prahalad at an HR conference last year. Butfor the simplest exposition of the situation, we may as well turn to managementguru Tom Peters. “Nobody knows what’s going on any more”, is his informedopinion.Thereare two possible options open to companies confronted with this situation,although the first – that of playing a game of wait and see – is widelyconsidered to be out of the question. “Stability is death: somehow the worldhas to adapt itself to a condition of perpetual novelty, at the edge of chaos,”claims yet another management thinker, John Holland. But the second option –broadly summarised as covering all the bases and never making a single bet –means a lot more hard work and insecurity for everyone when translated intoreal life.“Thechallenge of the digital economy means it is much more complex to runbusinesses, simply because timescales have been shortened and you get only onechance to get it right,” claims Colin Carmichael, a partner with theorganisation Consulting Partnership (OCP), which specialises in designing andimplementing management change programmes.Whatsort of impact is this situation having on the lives of managers? Research todate has concentrated on chief executives – and the results are alarming.According to the Harvard Business Review, CEOs are three times more likely tobe sacked today than they were in 1985, and even if they survive this obstacletheir average “life expectancy” in the job has declined dramatically. In somesectors this is now as low as two years.Themain reason for this shift is the rapid growth of influence exerted by externalagencies, most notably the financial markets. Increased activism on the part ofshareholders and the organisations representing them has dramatically alteredthe role of the CEO in many organisations, and this in turn has had a knock-oneffect on other functions. “Weknow that the length of tenure of CEOs is declining, and also that CEOs spendmore time dealing with issues outside the firm and less time managing theinside,” says John Purcell, professor of HR management at the University ofBath. And evidence would suggest that it is the HR function, above any other,which is being called upon to fill the vacuum.Addto this the other major side effect of the information economy – the rise inimportance of “soft” assets such as human capital in determining the value andlong-term health of an organisation – and it is hard to escape the conclusionthat HR is in the ascendancy. Soisn’t this the kind of role and recognition the profession has spent decadescampaigning for? Perhaps, but evidence suggests victory, if it is such, isbeing dished up with a decidedly sour accompaniment.Itis not just that the average HR director’s workload has increased, althoughthis is now beyond question. As Purcell points out, many HR directors areexpected to do at least two jobs. “They do their day job, usually managing thefunction, but they are also responsible for any number of set projects and assignments.And that is very demanding.” Even the so-called day job has evolved into aseries of specialisms far too complex for one person to manage, even with aneffective team in place to help take the strain. Takean issue as seemingly straightforward as improving the calibre and knowledgesets of people in the organisation. According to Linda Holbeche, director ofresearch at Roffey Park Management Institute, that in itself requires multipleskills sets, incorporating recruitment, building career tracks, setting andworking with appropriate performance targets and developing systems andprocesses to underpin the whole thing. “Forme, that’s a big enough focus in itself. You could end up with 20 differentinitiatives all springing off that one thing,” she says. “People expect a lotfrom HR, from getting the basic delivery right – inclu- ding such contentiousthings as directors’ pay – right through to instantly translating decisionsthat are often political into organisational strategy, then delivering it.”KevinRubens, senior European vice-president of Aon Management Consulting, has nosympathy for the “mission impossible” argument – “people find ways of coping”,he says – but nonetheless concedes that the job has certainly got bigger andmore difficult to manage.“HRnow consists of a string of multiple disciplines that need to be coordinated.In any typical [blue-chip firm], the HR department will have business analysts,MBAs, occupational and organisational psychologists, IT people…” he says. Tothese we might add compensation and benefits specialists, employee relationsexperts, staff relocation professionals, employment law gurus, change agentsand knowledge management wizards. In fact, you run out of synonyms for “expert”before you even begin to complete the list.AsRubens points out, in well-run companies technology is beginning to take upmuch of the strain, certainly in terms of administration. And in someorganisations much of the day-to-day responsibility for staff management anddevelopment has devolved to line managers. Moreover, the arrival of specialistHR outsourcing companies such as Exult and e-peopleserve is a trend that mostbelieve will accelerate.Butnone of these developments ultimately absolves the HR director from bearingprime responsibility for the entire people function, in all its differentguises, and this is particularly true when things go wrong. In fact, the job isarguably made more difficult when hands-on control of the situation is placedelsewhere. Thewhole point of outsourcing is to give the in-house function the time and spaceto get on with more strategic objectives. But observers like Holbeche questionthe reality of this. In too many cases, she argues, the outsourcing contract issigned and then forgotten about, with predictably dire results. “You end upspending more time doing damage limitation than anything else,” she says.Unsurprisingly, it is generally agreed that the most important new skill HRdirectors need to take on board, apart perhaps from project management, is theability to manage third-party relationships.SoHR directors have a much bigger workload, a wider set of responsibilities and apressing need to update their management skill-sets. But all these issues,while tricky to get right, by no means make the role impossible to carry out.Where, then, does the real difficulty lie? Theanswer is that HR, above any other corporate function, is being heldresponsible for solving some of the most difficult and seemingly contradictoryproblems posed by the transition into the information economy. Yet in mostorganisations, the function continues to be deprived of the necessary power andtools to accomplish the feat. In other words, HR directors have becomeembroiled in a classic Catch-22 situation.Nowhereis this better illustrated than in the issue of people capital. Certainly theargument for the development of people as “hum-an resources” is won, at leastin theory, but practice continues to lag behind. Atthe heart of the problem is the unwillingness of many management boards –themselves constricted by the greater influence being wielded by marketanalysts and shareholder pressure groups, to commit the necessary funds topeople development – without the promise of concrete evidence that the investmenthas paid off. And HR directors, in their continued efforts to be takenseriously as business partners, have in the main gone along with this.Butthe fact remains that after nearly 30 years of trying, no credible means ofmeasuring the financial value of people has emerged. In fact, there is agrowing school of thought that maintains the quest will remain foreverfruitless on the simple grounds that however much we may hope to the contrary,it will always be impossible to evaluate “soft” assets in the same preciseterms as their “hard” equivalents. “Thishas been the Holy Grail since the 1970s, when it was called Human AssetAccounting, and we are still no closer to finding a solution,” says Carmichaelat OCP. “The concept behind it is certainly important but attempts to measureit have always been thwarted. I have seen several studies [that purported tohave tackled the question successfully] which were clearly wrong.”Unfortunately,the people capital question is only one of several conundrums bedevilling theHR function that will always be impossible to solve so long as companiespersist in their attempt to impose new-economy thinking on old-economystructures and mindsets. The question of mergers and acquisitions – indeed ofany sort of external deal-making – is another case in point. Althoughmost management boards will happily go along with the notion that HR has acritical role to play in the success of any joint venture, they are still notprepared to lend any real substance to the theory by insisting on change. Facedwith the choice of kowtowing to the continuing anti-HR prejudice of Citydeal-makers, or of supporting the long-term interests of their ownorganisations, the evidence suggests that most continue to take the easyoption. The result is HR remains “downstream” of the decision-making and peopleissues are still considered, at best, a nuisance in any negotiation. Yet no-oneneeds to be reminded which department will ultimately be responsible fordriving through the resulting changes.Butperhaps the most pressing problem facing any HR director is still primarilyinternal in nature and can be summarised as tackling what John Bank, lecturerin HR management at Cranfield, calls “the new psychological contract” betweencompanies and employees. “Companies used to look after you like a parent, butit’s tough love now,” he says. “As long as your competencies meet ourrequirements you can stay here and develop. If not, you’re out.” Butmany HR directors are still struggling to manage this new project-basedattitude to work, in which notions of loyalty and reward have shifteddramatically, in the context of often resolutely unchanging corporate models.“Managersare not changing as quickly as many would like because there are systems inorganisations and society that resist that change,” concludes Martyn Brown, abusiness director at Ashridge, in a recent paper. Yet the business environmentis evolving so quickly that companies do not have the luxury of taking aconventionally planned long-term view. Consequently,he says, “The most challenging and scary implication [facing senior management]is that of letting go – as in not having the same kind of traditional control –of their role of planning, control and strategy formation, and of not beingable to predict outcomes.”What,then, is the best means to go about dealing with this series of “impossible”problems? For a start, recommend the experts, get your own house in order.“HRdirectors need to start making some tough choices – choices about what thedepartment will and will not do, what it will outsource, and how it will managethat outsourcing,” says Holbeche. “You also need to look very closely at yourown team: has it got the skills you need? Again, this might be the time fortough choices. Train people to work across boundaries and aim for athree-to-five-year strategy, but be prepared to be flexible with it. Bolsterthis with short-term projects.”Rubens,meanwhile, recommends some inward gazing. “Know yourself. Understand your peaktimes for learning and try to make sure you don’t give up this creative time.”He claims there are three strong core competencies in every successfulexecutive: “Time management, project management and strong internal values, soyou don’t spend too much time agonising over individual decisions when theycrop up”.Butthe real conclusion to all this is clear. For too long, perhaps, HR has beenlambasting itself for a perceived failure in getting to grips with the businessneeds of organisations. Yet the transition into the new economy has alreadydemonstrated the growing irrelevance of many of these structures and mindsets. Insteadof always trying to comply with someone else’s business argument, therefore, itis time HR seized the initiative and began dictating its own terms. If youreally believe the future of your organisation lies in the quality of yourpeople, then you must accept the challenge of reshaping business strategy tofit that goal – and of summoning up the necessary influence to push it through.UntilHR directors realise the necessity of setting the new business agendathemselves, they will continue to play a central role in Mission: Impossible.Difficultsectors for HREvery sector poses its own HR challenges and difficulties. Herewe list a few of the more tricky ones.TelecommunicationsThe current travails of BT demonstrate the speed at which this sector hasshed its comfortable high-value, high-tech past, evolving into a cut-throat,low-margin business. In terms of remodelling business models to cope with thisnew environment, it’s likely to be a case of pain, pain, pain.High-TechThe recent market decline of such new economy stalwarts as Intel, Cisco andDell demonstrates that the industry’s problems extend much further than a fewshakeouts in the dotcom sector. Many of these new-model pioneers have yet to betested by a significant economic downturn – will their structures be resilientenough to cope? Will the previously heavy investment in training prove itsworth if hard times kick in?NHSMorale is up from the depths following a much-needed government cashinjection but recruitment is still the paramount problem. The UK is short ofsome 40,000 nurses. Searching questions need to be asked as to how this declinecan be halted and how it was ever allowed to happen in the first place.FinancialSectorThe financial sector is never immune from the pressure of downsizing andobservers predict new waves in the months ahead as merger and acquisitionactivity continues apace. Increased customer competition in the financialservices arena from sectors such as retail means the pressure to innovate isstill high.ManufacturingManufacturers continue to be dogged by the twin pressures of exchange rateand continued cost-cutting. Employee tension and insecurity is growing in manyindustry sectors. Motivation becomes a real issue when, as happened atsteelmaker Corus, huge improvements in performance lead to – the chop.Tourism,Hotel & CateringThe industry’s perennial problem with recruitment could be replaced bysomething much worse as the wider ramifications of the foot and mouth epidemicbegin to bite. Three weeks into the crisis, and there is already the prospectof mounting international cancellations. The industry is facing very precariousdays indeed.DotcomsMaintaining staff morale in the face of continuing financial losses andlayoffs is proving an uphill struggle for many in the sector. With evenAmazon’s future considered increasingly open to question, expect a rocky roadto come.PharmaceuticalsAgain, merger and acquisition preoccupations abound. Either you’re tryingto rebuild morale and devise new post-merger structures or you’re contemplatingan imminent buyout. Renewed international political pressure on drug patents isanother unwelcome hornets’ nest this sector is having to deal with.TransportHow much time do you have? Mission ImpossibleOn 27 Mar 2001 in Personnel Today Comments are closed. Previous Article Next Articlelast_img

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