We all know that HR has fundamentally been about helping enable culture and driving performance. But in order to do this effectively in today’s world, we need to recognise the key role HR plays in enabling innovation.
There is an innate tension within high-performing leadership teams, a product of the diverse and (partially) non-overlapping goals of executive colleagues. Banking execs, for example, work hard to balance prudent lending with business growth. In many sectors, marketing and operations teams are competing for budget share; the former prioritising present-day delivery, the latter long-term brand development. Even Paul and John, despite the prodigious success of The Beatles, had well publicised creative tensions, which may well explain, in part, why they were so successful.
Across executive teams, appetites can vary significantly when it comes to innovation, operating risk, financial risk, entrepreneurship and growth. When they are well managed, and litigated, these tensions are healthy, eliminate group-think, and ensure that the full breadth of organisational drivers are duly considered.
At Sheffield, AltoPartners we are often involved in managing and advising on the ‘HR tension’ – that is, the extent to which people and culture strategy is incorporated into broader executive decision-making. This is fascinating work that varies significantly depending on the context in front of us. However, in high performing organisations, there are clear and consistent themes when it comes to HR and innovation.
The traditional model: process, compliance, quality assurance.
It is essential that HR teams provide quality, timely and prudent support in the areas of hiring, induction, employee and industrial relations, payroll, remuneration, etc. To not have these means corporate disciplines are lacking.
It is because these basic services are so important, however, that the remit of HR leaders and their teams often ends here: no news is good news, and the absence of catastrophic staff attrition, or regular visits to the ERA, is evidence of a job well done. This HR philosophy is not uncommon and, I think, represents a significant missed opportunity. Today, the building body of qualitative evidence supports what the best leadership teams have known (and practiced) for some time: that HR innovative practice is integral to strong company performance.
Contemporary HR ‘best practice’: innovation, integration, litigation.
Once core HR functions are in place, there are many additional ways in which people and culture teams can, and should, contribute to organisational performance. These include:
• Providing recruitment meta-analysis. A lot of recruitment – even in the search for senior leaders – is ad-hoc and conducted in response to exigent needs and unforeseen departures of key personnel. This will never be entirely avoidable, but ought to be improved with systemic, thematic reporting. What are candidates saying about your employer brand? Who is not applying for roles that you would like to apply, and why not? Are the insights from exit interviews and outplacement being incorporated into recruitment practice and candidate care? And, if there are hard messages that come from this reporting, HR innovators will be willing to convey them (i.e. argue them out) to their executive colleagues.
• Driving engagement. Well beyond mere reporting on a net promoter score, HR innovation requires specific and actionable advice on how to improve engagement measures. Quality advice is ideally based on a blend of team feedback, academic research and the informed, professional ‘gut’ of senior leadership. Importantly, HR innovators will foster the vulnerability among colleague-leaders to admit and address what’s not working, and then lead change accordingly.
• Informing bottom-lines. It is now common for larger organisations, and many smaller ones, to consider the social and environmental impact of their activity. Staff and community wellness measures often tie into non-financial bottom lines, too. HR innovators will define and advocate for these as integral to staff engagement, positive brand and good corporate citizenship.
• Building leaders – and getting out of the way. Sheffield, AltoPartners Associate Director and organisational psychologist, Alia Bojilova, suggests that if the definition of leadership is the capacity to influence outcomes, then leadership needs to be embraced wholeheartedly if progressive innovation is to occur. To quote, “…this needs to be embedded within organisations at all levels. Gone are the days of leaders being the ones simply shouting from the rooftops. If you’ve got authenticity, empathy, curiosity and resilience, you process the building blocks of leadership, which is what is fundamentally required to drive innovation.”
This is a fantastic list of leadership qualities but, in practice, can be hard to embed: how willing, really, truly, are executives to support the development of their teams, even if that presents a challenge to their ego and to their own sense of organisational position? Whatever the internal roadblocks to building leadership capability, HR innovators support and challenge fellow leaders to create a culture that enables professional development.
These points are not exhaustive but hopefully convey that this kind of innovation needs a mix of insight, EQ and political courage. The required ratios of each will depend on the context, and be identified via the robust, push-pull discussions within a leadership group. Despite the obvious, multi-factor challenges of prioritising a non-traditional HR model, the organisational payoff can be immense.