Future Ready HR Organization: Scaling beyond Metrics to HR Capability

In any organization, the Human Resource (HR) function plays a crucial role of being the custodian of Talent. In today’s VUCA or a BANI world (you can take an acronym of your choice), the HR function is also being called upon to be the architect of organization capability to deliver organizational results. The challenge for HR Leaders is therefore how to demonstrate that they have a good understanding of what it takes to build organizational capability.

In our assessment, ability to top-grade the functional capability of HR function is table-stakes today. The HR Leaders need to go above and beyond and demonstrate true Systems Thinking and understanding of how the whole organization comes together.

The bigger question that we see in our Organizational HR Advisory Services offeringis, who do HR Leaders turn to, if they must assess the capability of their own function? Does it call for a new playbook, or does it mean that HR Leaders can overlook the usual HR Metrics like – is 60 days good time to fill a position or should it be 40 days; is attrition of 10% good or bad; should you measure the internal fill rate or employee engagement scores.

In helping HR Functional transformation, I have come to rely on drawing inspiration from how ace athletes build their capability and temperament. Just as in sports, in the corporate world too, it begins with having a good HR scorecard with key performance indicators, to identify the problem(s). So let us look at the transformation indicators and the challenges faced in transformation.

Transformation indicators

1. Relevance: The care that teams must take when designing the scorecard is, that it must measure what is important for the organization and will help deliver its strategic objectives and not what is important for the function.

2. Benchmarks: Next, we need to throw in the relevant benchmarks, and you quickly realize what needs to be fixed. Then comes the hard part of diagnosing what’s wrong with the process that has been identified to be performing sub-optimally.

3. Understanding patterns: In case the HR Leader does not have external benchmarks, a good practice that often works just as well is to look at the data of your own organization for the past few years and identify the patterns.

4. Future readiness: Identifying whether today’s practices will serve the organization well tomorrow and support the achievement of long-term vision. This requires helping the organization and its constituent functions translate the Vision into deliverables.

Challenges when driving transformation

1. The first challenge that we often confront is Performance data of the team. Often, organizations do not maintain a good archive of performance data of the HR teams. Sports on the other hand, preserves performance data systematically over long periods of time. That data is meticulously used to track performance over the years. Ask any athlete or an ace swimmer worth his or her sweat and they would know where they stand regarding their timing, what their averages have been, etc. Now apply the same methodology to your HR team and you will know what ails the system.

2. The second challenge is assessing the Process Capability. This is where Six Sigma methodology can be very helpful, not because it provides a statistical analysis, but more because it provides practical tools to assess the process efficacy. A simple swim-lane diagram of the process is enough to point out where the overlaps are, to assess and make the process lean and effective. If that was not enough, one can always use tools like Value Stream maps to de-bottleneck the process.

3. The third challenge and the one most ignored, is Systems Thinking. HR Leaders often overlook the linkages that their processes have with other functions. Truth is that today’s organizations are a complex maze of processes interacting with each other to keep the system running smoothly. Leveraging the sports analogy again, the outcome of any process is like a relay-race, where every runner needs to perform at its peak in each event for the team to win and it requires high degree of clarity on who runs which leg of the quartet.

4. The fourth challenge that one confronts in driving transformation is Team composition. We often see this in the right-hand, left-hand batting combinations in the cricket team, that puts additional pressure on the bowlers to vary their line and length, not to mention changing the field placements, every time batsmen cross over. The organizations must therefore place significant emphasis on understanding the complimentary and supplementary skills and behaviors that each team member brings to the team composition. It is therefore very important to have a skill-map of your team to understand what changes every time, there is a new member on the team.

5. The fifth challenge is assessing Team Capability. This is where both the Competency frameworks and Values of the organization come in handy. One can use Assessment Centers to assess the potential gaps in team capability. Performance data of individual team members often throws up only half the picture on what probably needs a fix. Hence the need for assessing at a much deeper level on both the capability and alignment of the team members towards the organization goals, because there may be team members who may be disposed towards individual contribution versus collective contribution. Remember, boxing is an individual sport, but kabaddi is a collective!

6. The sixth and final challenge is Driving Change and acceptance across the system. Functions usually restrict their change management processes to their functional teams. It is important to build on the linkages identified above (with other functions) to help other functions assess downstream impact of changes in one function and help them cope with the change. Sometimes it may be minimal, sometimes it may be more, but one that must never be undermined.

So, the next time you are confronted with the dilemma of what is enough, all you need to do is look at the pattern of your team’s collective performance on KPI’s that matter to the business.

This blog has been written by Ajay Kukreja, a Principal Consultant with GrowthSqapes.