CEOs and CHROs say HR needs to take on a new role in leadership, or someone else might beat them to it, according to a recently published white paper.
A white paper recently posted for discussion by an AHRI member offers fascinating insights from CEOs and CHROs about the opportunities for HR in the new, disrupted world of work. The next few years are critical for HR, it suggests, and it points to a lucrative new role they might play in securing success for their organisations.
The paper, “It’s Time for a Second Playbook: HR’s Leadership Role in Transformation’, was written earlier this year by three senior executives at leadership consultancy Merryck, along with the CHRO from Hitachi Data Systems.
The “second playbook” it refers to is a long-term strategy for leadership, people management and innovation, operating in tandem with an organisation’s “legacy” playbook.
The key challenge for organisations seeking to make the transition to “what’s next”, they state, is that for many businesses, this exists as a blind spot.
The data case
A recent study by Merryck of global talent leaders and CHROs found that more than 80 per cent of companies are currently wrestling with a shift in their business model, including integrating digital strategy, and increasing agility in execution and strategy. Yet 82 per cent of global talent leaders believe that current leadership development is not fully linked to strategy. And over 50 per cent of CHROs believe that the link between strategy and leadership is not clear at levels below the c-suite.
Merryck’s interviews with CHROs and global talent leaders showed that the case for change in leading is rarely fully understood at the most senior levels. Instead their data consistently demonstrated a disconnect between where a company wants to go and how it will get there.
The opportunity for HR is to “bring forward the line of sight they have on leadership gaps.”
“Human resources often sees the barriers to innovation and adaptation created by old ways of leading, managing, and decision-making.”
“This is a win or lose moment for HR,” they write. “Developing a second playbook operationalises the very leadership attributes that drive enterprise transformation.”
This is what most businesses need. Yet without HR leading the charge, most will not get it.
And they warn that HR must grab the opportunity to take charge soon, stating, “time and again CHROs have expressed a concern that if HR does not seize this role, someone else will step in or the transformation will fail.”
The future challenge: it’s the organisational structure, stupid
The white paper’s authors begin their argument on what’s now very well-trodden ground; the future challenges organisations face, including digitisation, automation and industry disruption. Even businesses with a history of execution excellence are now “struggling to innovate with commercial viability and market relevance,” they claim. This is not due to a lack of intelligence, ideas, technology, or capital, but is the result of a direct conflict with the historical leadership of a company.
“The organisation’s well-established way of delivering products, services, and profits…hobbles a company’s adaptability even as the board, leadership, and analysts enthuse about a new strategy, a market-disrupting approach, an AI revolution, or an Internet-of-things future.”
But it’s not just the authors who believe this, many business leaders agree there’s a need to develop more dexterous future planning strategies.
Attention HR: Position open
The white paper argues that this “existential urgency” gives rise to a leadership moment for human resources.
Part of this will be enabling leaders to face two key challenges:
- To identify and ring-fence the existing or legacy playbook on leadership and determine what could hold leaders back in today’s world.
- To deliberately define what leadership, management, operational, and decision-making characteristics will be required to win in the emerging parts of the business.
While the white paper’s writers recognise that every company needs to customise their approach to a “second playbook”, they identify several steps that all HR leaders can take:
- For every strategic imperative, detail the leadership implications and how they need to show up in the business.
- Starting with a clean slate, collaborate with other leaders to develop the right KPIs to drive both short-term business results, and mid- and long-term innovation.
- Change the language of HR to clear business terms where no one needs a page of definitions to decode what is being said.
- Attack the systems that are holding you back, e.g., work with the CFO on budgeting, and work with all leaders on performance management that aligns to strategy.
- Consider leadership development holistically. A leadership pipeline, and learning and development, should be built across business units and functions.
- Develop solutions for business unit leaders to help them leverage the changing dynamics of the workforce.
- Be an early adopter of the right technologies that allow you to see the business from new perspectives.
- Be relentless in communicating the change required and the successes achieved.