Strategic Consulting Group

THE FUTURE OF HR?

Dr. Peter Saul
Director, Strategic Consulting Group


Paper presented to:
Macquarie Graduate School of Managements
People Management and Leadership Conference
September 16-19, 2001
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SHIFTS THAT ARE RE-SHAPING HR ROLES
FROM
Local markets, operations
Manufacturing, clerical work
Hierarchy
Intermediaries; face-to-face
Obedience to formal authority
Stability, efficiency, control
Full time job
Customer service
Work done by employees
Fixed work location
Management prerogative
Loyal service
White, male workforce
Financial performance
Get a job
TO
Global markets, operations
Service, knowledge work
Networks
Direct access,virtual relationship
Questioning of formal authority
Change, creativity, flexibility, order
Part-time and project work
Shareholder, stakeholder value
Work done by many contributors
Diverse work locations
Social licence
Marketable knowledge, skills
Diverse workforce
Triple bottom line
Get a life
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CHANGING WORKER ASPIRATIONS
RICHARD BRANSON
MICHAEL JORDAN
RICHARD BORES (Wizard Home Loans)
MERY STREEP AND JODIE FOSTER
ANITA RODDICK
NELSON MANDELA AND JERRY MAGUIRE

had a dream and went through with it...loved what he did
lives life the way he wants... created this lifestyle for herself out
of what could have been a downward spiralreally inspiring

AFR BOSS magazine, June 2001. Survey of work role models for white collar
Australians, in 20-30 years age range.
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HR AT A CROSSROADS
Significant change is inevitable for HR but what HR will be
and do is not yet clear
SRHM is doing research to develop a vision for the future of HR
and a profile of the future HR practitioner
An HR practitioner might be "a hybrid line manager" who is
"first and foremost a business executive" but has expertise in
at least one HR function.
SHRM President and CEO, Helen Drinan
We have to get management to understand that they're
responsible for people AND If we do our joband work
ourselves out of a jobso be it."
Results of a forum on the "The State of the HR Profession"
held in conjunction with the 2001 Annual Conference of the
Society for Human Resource Management
Also see FT.com online forum on Human Resources: A career in crisis?
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EMERGING LEGAL ISSUES AT WORK
NEW TECHNOLOGY ISSUES

AGE CONSCIOUSNESS IN THE WORKPLACE

GLOBALISATION OF EMPLOYMENT LAW

TRAINING FOR LEGAL COMPLIANCE

WORKPLACE SAFETY
Source: Garry Mathiason (Littler, Mendelson, Fastiff, Tichy & Mathiason)
SHRM Annual Conference June 2001. Results of survey of 400 employment attorneys
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HR EXECUTIVES VIEW OF THE FUTURE
TOP 5 BUSINESS CHALLENGES
Developing new markets
Improving profitability
Market share growth
Becoming the recognised
global market leader
Building shareholder value
TOP 3 HR CHALLENGES

Attracting and retaining
talented people

Improving organisational
capabilities

Developing leadership skills
Source: Arthur Andersen survey of HR Executives in almost 70 Australian-based firms
Reported in HR Monthly, August 2001, p.17
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The bad and the ugly in HR
Many HR people still lack business acumen

We have not adequately managed high expectations
of HR

Theres too much modeling of mediocrity and way too
little real research going on

We have overhyped e-learning and some other fads

We do much order-taking and mistaking talk for
action

Jim Moore, former Director of Workforce Development at Sun Microsystems
in his address to the 2001 SHRM Annual Conference
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Q. So, how do we organise all the shifts, trends,
speculation and forecasts into a framework
that can guide fruitful conversations between,
and strategic decision making by, senior line
managers and HR professionals?

A. Scenarios is one way
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FOUR AUSTRALIAN SCENARIOS
FIRST GLOBAL NATION
Australia capitalises on
globalisation; promotes its
internal diversity and ethnic
tolerance; and boosts home-
grown innovation and industry
capability

SOUND THE RETREAT!
Globalisation stalls as political
and social structures are not
ready; trade barriers and
nationalism re-emerge; we
depend on bilateral national and
commercial relationships
BRAVE OLD WORLD
Complacent, dependent on
agriculture, tourism, new
manufacturing and some
biotech; clever people and
companies move overseas
GREEN IS GOLD
We emerge from the growing
imperative to protect the natural
environment as a leading
innovator of global environmental
management
Source: Australian Business Foundation Alternative Futures: Scenarios for
Business in Australia to the Year 2015 Sept 1999
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DEFENCE: In the Box Scenario Matrix
Open globalised
world economy
Closed
protectionist
world economy
Social
polarisation
and exclusion
Global
middle
class
Source: Hardin Tibbs
report to Australian
Defence HQ 1999
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DEFENCE: Way Out of the Box Scenario Matrix
Revolution in
basic science
Science
reaches a
plateau
Psycho-social
evolutionary
punctuation
Discontinuity in human
consciousness
Single
world
government
Social progress with
no discontinuity
Source: Hardin Tibbs
report to Australian
Defence HQ 1999
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TWO SCENARIOS OF THE 21ST CENTURY ORGANISATION
MIT Initiative on Inventing the Organizations of the 21st
Century (January 1997) facilitated by Peter Schwartz of
the Global Business Network:-
http://ccs.mit.edu/21c/21CWP001.html

The scenarios were developed during 1994-1997 by MIT
academic and research staff in discussions with
hundreds of executives at various MIT Symposia,
executive education programs, etc.


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FUTURE OF ORGANISATIONS: Scenario 1
SMALL COMPANIES,LARGE NETWORKS
Autonomous teams of 1-10 people
Temporary - task or project based
Linked by high bandwidth, electronic network
Venture capital infrastructure identifies promising teams and
provides financing
Independent organisations for social networking, recreation,
learning,reputation building and income smoothing
evolved from professional associations, unions, clubs,
university alumnis, neighbourhoods, families, churches
they are home for our identity as projects come and go
Examples: Film industry; Prato Mills (Italy); Nike; Nokia PC Display Division
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Small Company, Large Network HR
Very specific HR scope focused on project organisation
(e.g. talent scouting/selection, pay, health & safety)

Outsourced
agents, brokers, specialist providers
contract staff organisations handle the HR for their talent
as part of their brand and competitive strategy

Mutual employment obligations spelled out in project
contracts
or implicit in industry standards
or assumed from past working experience

Project Managers reputation depends on his/her people
skills and hence there is a reluctance to delegate to HR
specialists
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Small Company, Large Network HR (cont.)
Selection is via networks, personal references,
reputation

Performance management is via peer pressure and
industry/ professional standards

Rewards are contractual or entrepreneurial (equity
based)

Development is via doing leading edge projects

Innovation is via brokers, deal makers, agents, sponsors

Individuals rely on professional associations, guilds,
managers/agents
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FUTURE OF ORGANISATIONS: Scenario 2
VIRTUAL COUNTRIES
Keiretsu-like alliances with operating companies in every country
Minimal national allegiance - primary loyalty is to the corporation
Traditional hierarchy or decentralised divisional structure
Company is the focus for individual identity
Company meets employees needs from cradle to grave
Employees own the firm AND have right to elect the Board and
management
Open book accounting informs management elections
Specialist organisational designers travel through firm brokering
partnerships and fostering cross boundary communication
Role of governments, industry unions is significantly reduced
Examples: Asea Brown Boveri; GE; Johnson & Johnson
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Virtual Country HR
HR almost replaces social welfare, education systems
and provides financial management and estate planning
services, etc

Corporate (strategic) HR
sets standards and monitors the corporate culture
helps Marketing build the corporate brand

Divisional (operational) HR
total care of employees so they are free to focus on
performance

Actively involved in local communities to reinforce the
company culture and image
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Virtual Country HR (cont.)
Selection emphasises fit with corporate values

Performance management focuses on results achieved
the XYZ way and on being a company ambassador in
all areas of life

Reward is via promotion, enhanced status, rights,
benefits - and pay

Development is via corporate colleges and universities in
partnership with the worlds best educational institutions

Innovation is through internal R&D and improvement
programs with heavy emphasis on protecting corporate
intellectual property
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CHANGING HR ROLES: Some Generalisations
PAST

HR ROLE WAS CLEARLY
DIFFERENTIATED
mechanistic
(Personnel Admin)
ritualistic, legalistic (IR)
CEOs eyes and ears
with the troops
distinct professional
career paths

HR is HRs responsibility
FUTURE

PEOPLE/LEADERSHIP ROLE IS
DISTRIBUTED AND DIFFUSE
knowledge management
relationship management;
teamwork
legal compliance
change management
no distinct HR profession -
new hybrid roles emerge

People/Leadership is
everyones responsibility
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NEW CRITERIA FOR RATING HR?
Profit generated per employee (compared to industry benchmark)
Salary/wages costs compared to industry median (reflecting
value of corporate reputation/intangibles in labour market)
Number of talented candidates applying for advertised (and
unadvertised) vacancies
Time taken to satisfy customer orders, inquiries, complaints
(compared to agreed service standards)
Incidence of customer complaints caused by employee behaviour
Cost of re-work
Cost/risk due to time lost through injuries, absences, disputes
Rate/cost of unplanned turnover among good performers
Percentage of customers citing service quality or competent,
caring staff as a competitive edge for the company
Net cost of generating organisational improvements
Percentage of revenue/profits coming from initiatives taken in
last 3 years
Share price premium compared to industry peers
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AN INTEGRATING STORY?
OUTCOMES
(Stakeholders)

Shareholder/
Investor


Customer


Contributor
- employee
- other


Community
FUNCTIONS
(Management)

Finance
Investor Relations

Sales & Marketing
Operations
R&D

Contributor Relations
Contracts (Legal)
Supply


PR
Community Relations
ARCHITECTURE
(Leadership)





VISION & MISSION


CORPORATE
STRATEGY
Competitive strategy
Development strategy
Leadership style
Culture/Values/Ethics


ORGANISATIONAL
DESIGN
Structure
Technology
Place
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MAPPING YOUR ORGANISATIONS CURRENT TRAJECTORY

Get
Talent
Motivate
Talent
Reward/
Recognise
Talent
Develop/
Skill
Talent
Tap/
Utilise
Talent
Retain/
Transition
Talent
2000s
1990s
1980s
1970s
1960s


Derived from an HR framework proposed by Brian Young PeopleFirst Solutions
Previously Asia Pacific HR Director for Deutsche Bank
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MORE WINDOWS INTO POSSIBLE FUTURES
SOME WEB SITES ENGAGED IN THE SEARCH:

http://ccs.mit.edu/21c/index.html
http://www.foresight.gov.uk/default800.htm
http://www.defence.gov.au/nspb/htibbs-futuresV.4.ppt
http://www.dol.gov/dol/asp/public/futurework/welcome.html
http://www.fastcompany.com/
http://www.bsr.org/ and http://www.csp.uts.edu.au/
http://www-csc.mty.itesm.mx/~laava/KMetaSite/menu/sitemap.htm
http://www.managewithoutthem.com/
http://www.futurists.net.au