Now That People Finally Matter To Businesses, HR Is The Next Big Thing

“Human resources is neither about humans nor resources.”

There. Someone had said it. The senior HR leaders I was having dinner with also overheard it, said by the pair at the next table, who then laughed. If you work in or around HR you’ve probably heard these words. If your organization’s HR department has become the “policy police” in recent years, you’ve probably thought it yourself.

Although most Human Resources organizations now reach far beyond the personnel departments they sprung from, HR pros are still often perceived as narrow minded or too soft to focus on strategic business matters. Even if that’s no longer true.

In recent years, corporations have been under pressure to move beyond the familiar. The Conference Board report “Go Where There Be Dragons” (nodding to the ancient practice of drawing dragons on maps to symbolize the unknown) describes the “business need for leadership correction, calibration, and change.” Corporate leaders aren’t cut much slack. Chief human resources officers (CHROs), like their peers in the C-suite, who can’t travel in new directions, must go. Very good HR leaders can easily be hired to replace those unable or unwilling to change.

Although many social business initiatives are started without even inviting in HR, they know (or are figuring out) why they need to be part of the conversation early and often. Social business isn’t something you buy. It’s something you become. And become you must.

People finally matter at work. Lip service be damned. The social media wave, now moving inside corporate walls through social business tools, is not a fad. It’s a fundamental change to how business gets done. The social everything movement is a humanizing movement, driven by dramatic changes in workforce demographics, forcing employers to treat people differently–more like the vital assets they have always been.

John Rice, vice president of engagement practices at Tyco International, describes his role as one that helps create, define, and connect. That’s vital because research from Gallup shows that firms with an engaged workforce have 2.6 times the earnings per share growth rate compared to their industry counterparts. The danger of failing to engage employees? Actively disengaged employees erode an organization’s bottom line while breaking the spirits of colleagues in the process. Within the U.S. workforce, Gallup estimates this cost to be more than $300 billion in lost productivity alone.

Kathy O’Driscoll, a former HR leader at Microsoft, points out, “People go the extra mile for people, not for objectives. With each interaction, people build a network of trust that can become a core business asset.”

What Can HR Do?

Bill Kutik, long time analyst, radio show host and now video series host, recently reminded me, “Human resources must provide tools and practices to run the business better, rather than to just run HR more efficiently.” Here are four ways to accomplish that goal.

Identify, synthesize and translate forward thinking into impactful action.

“Large companies who manage through a distributed model did not have to rely on collaboration, integration or formal connections,” says Rice. “Now, to maximize efficiency and in order to keep down costs, it’s essential to share information. Social media inside the firewall can create spiderwebs of networks that can leapfrog collaboration processes, and I actually think it is a way to close the knowledge gap that we have identified as a risk. The idea of crowdsourcing an internal problem, and making it easy for a lot of people to share, means more people learn from those who know how to get stuff done.”

“HR is often brought in to discussions about social tools as a result of or in anticipation of a stupid human mistake,” admits Rice. “I open the possibilities by focusing less on bad behavior. (After all, people can still post inappropriate pictures on the lunchroom bulletin board). I focus our attention on understanding how to use social tools to make our networks stronger, close the gap we have around knowledge drain, and manage the generational expectations around what it means to work for a big company.” See it, translate it, and make it happen.

Discover, nourish, and keep the best people.

“Until recently, finding fabulous employees and the next generation of corporate leaders required corporate recruiters to invest a lot of detective work into finding people with appropriate skills and experience. Now with resumes and profile data freely available on the web, recruiters are spending their time differently,” says Microsoft’s O’Driscoll. “In just a few years, how organizations recruit has dramatically changed with widely used social networks like LinkedIn and Facebook capitalizing on the relationships our employees have already cultivated. Add to that, new businesses have sprung up that finally optimize the process for both employers and candidates. What used to take months or even years can now take weeks or days.”

Alongside the good come challenges, O’Driscoll cautions, with implications for employee retention and growth. With employee information widely available on the web, it’s easy for recruiters to find and contact your people.

“Now more than ever, organizations need to foster an environment that motivates great people to stay and do their best work,” she says. “HR needs to be attentive to what employees say about the way they experience their company culture and drive a dialogue about how the culture should evolve to ensure long-term success in a fast changing world.”

Why hire good people if you’re not going to create an environment where your investment in payroll has the most return?

Exemplify creativity, flexibility, and speed.

Randy MacDonald, senior vice president of human resources for IBM, reported in “Working Beyond Borders” that data gathered from more than 700 organizations across 61 countries shows three big opportunities for HR:

1. Cultivate creative leaders who can more nimbly lead in complex global environments.
2. Mobilize for greater speed and flexibility, producing significantly greater capability to adjust underlying costs and faster ways to allocate talent.
3. Capitalize on collective intelligence through much more effective collaboration across increasingly global teams.

As organizations turn their attention to growth, CHROs must find creative ways to overcome restrictive boundaries to optimally deploy their workforces. Success is not measured by engagement, rather a team built fast to do good work, increasing margins along the way. How can those in HR move beyond these borders to align resources with opportunities to improve business performance?

MacDonald sought ways to become an active participant in IBM’s increasingly instrumented and interconnected practices. Last year he hosted a highly interactive 3-day summit with IBM HR leaders from 170 countries, and no one left their desks to participate. They joined together using collaborative technologies to share ideas, debate concepts, and chart a course for future change. Today MacDonald can also be found using Connections, sharing what he’s working on and soliciting insights from his colleagues across the globe.

Change the talent management and diversity inclusion conversation.

Most of the attention on talent management and diversity focus on having a workforce made up of brilliant people who also represent the gender and cultural mix of the society around you. With social tools available within the firewall, human resources professional have an opportunity to move the practice upstream, taking this opportunity to bring out the voices, perspectives, and innovations from everyone in the organization. It’s not enough anymore to have people who look and sound different. It’s competitively defining to elevate perspectives that represent every company’s broadening customer base.

“Diversity and inclusion isn’t just about innovation and multiple perspectives,” says O’Driscoll. “It’s about building relationships with a wider range of potential customers.”

Think of the implications your workforce has on influencing the world around them. According to a Nielsen Global Online Consumer Survey of more than 25,000 people, 10 in ten adults trust recommendations from personal friends and virtual strangers over any other source. This means that your employees who aren’t in sales or marketing are also very influential in the world you serve. Treat them well, and they will want to say good things about your company to their friends, potential candidates and customers. This is HR impacting the bottom line. As I recently read on Twitter, “You may employ 1,000 people, but I’ll judge you by the one I meet.”

HR leaders are in the bird’s eye seat to demonstrate how people can be business-minded and relationship-oriented at the same time. People resources–human resources–are every company’s most valuable assets, whether corporate leaders believe it or not. There is no better time to help people understand this than by seeing it in action.

What can you do right now? Push the focus from, “What is our strategy?” to “Where should we start?”

For more leadership coverage, follow us on Twitter and LinkedIn.

[Image: Flickr user SanFranAnnie]