How To Make HR A Strategic Asset in The Digital Era
When I was at Harvard Business School, one of the most scoffed-at courses we were required to take was “organizational behavior” or OB. We envisioned ourselves creating audacious strategies and new financial instruments — not dealing with mundane “HR issues”.
We couldn’t have been more wrong in our misplaced focus.
You can concoct the best strategies, or invest in the best financial instruments, but it all comes down to a leader’s ability to inspire members of the organization to change, shift, adapt and align around a singular effort. At Altimeter, our research found that the biggest obstacle to digital transformation is culture. Winning in the digital era isn’t about having the right technology — it’s about having the right leadership and team that can execute what is often a constrained and flawed strategy in the face of daunting competition.
That’s why at Altimeter we’re very focused on the role of the Chief Human Resources Officer (CHRO) or its equivalent within organizations. We found that HR is often not sitting at the strategy table, or it plays a tangential role as an afterthought. That’s because HR has traditionally been involved in two areas: 1) Recruiting talent, and 2) Mitigating risk of underperforming or rogue employees. For most organizations — as it was for me and my business school classmates — these are ‘keep the business running’ priorities, not necessarily strategic.
HR’s Influence Extends Outside the Organization
What’s changed is that employees are now empowered in the digital era. They are connected not only to each other but also to a broader ecosystem and network outside of your company. Like it or not, they have power because of their ability to leverage mobile, social, and digital technologies, regardless of whether it’s provided by the company or not.
These empowered, connected employees can tap their influence on behalf of their company, and increasingly, they are choosing to work for organizations where they can contribute in a meaningful way to a shared mission and outcome. Or they can vote with their feet and go to a competitor.
I believe the digital transformation of HR and employee engagement will be a competitive advantage for organizations over the next five years — if you can harness the enthusiasm of great employees, it will be reflected in the bottom line. Our research found that 63% of organizations cite culture as the biggest barrier to digital transformation. This means digital strategies are more of an HR issue than a technology issue. And yet, we treat culture as if it were an afterthought, rather than a starting point.
Issues around talent, culture, and the nature of work not only extend throughout the organization, but also externally. The landscape for CHROs has expanded exponentially to become strategic in nature — and it’s up to the leaders of an organization to start working in a new way that reflects this reality.
How to Make the CHRO Role Strategic
Given the challenges of modern organization, it’s time to think differently about the role of the CHRO. Here are some of the organizational challenges where HR should play a central, strategic role — it’s up to the CHRO and other members of the C-Suite to ensure that this happens.
- Customer experience. Employees are often at the center of delivering a great customer experience, but hiring and development doesn’t necessarily emphasize this priority. More importantly, organizations often lack the data and insights needed to understand which hiring criteria are most important in tying employee engagement back to revenue. By working closely with HR, the customer experience team can begin to transform hiring and promotion criteria so that the right skills and mindsets are identified and developed.
- Employee collaboration and engagement. Who owns this in your organization? In a recent survey, Altimeter found that HR leads this in only 41% of organization. It’s not a debate of IT versus process versus marketing — what’s important is that all three departments present a holistic, cohesive strategy to the board together.
- Employee advocacy and digital leadership. Our research found that an astonishing 45% of digital and social strategists said that a top priority is to develop an employee advocacy program, which allows employees to advocate on behalf of the organization via their personal social and digital channels. This is a significant cultural change for organizations — and especially leaders — who have been told their entire professional careers not to share. CHROs must lead from the front by example, working closely with the CMO to set guidelines provide training, and most importantly, serving as examples themselves of executive digital engagement, internally and externally.
The CHRO Digital Toolkit
In order to support and accomplish these strategic goals, CHROs must have the right digital tools and the team skilled to provide insight and take action. While every organization will need to assemble the platform that will best support their unique strategies, here are some guiding principles to consider:
- Marry disparate data together. The data needed to connected empowered employees to bottom line results likely resides in multiple databases, both internal enterprise databases as well as external marketing and social unstructured data. The key isn’t collecting all of this “big data” in one place — it’s prioritizing which pieces of “little data” to collect that will give you the insight needed to make key decisions.
- Prioritize training with deep analytics. Many organizations suffer from a “digital deficit” in that key employees lack the digital knowledge and skill to engage with connected consumers or even other empowered employees. The role of pilots shouldn’t be to merely make the business case for a new strategic employee engagement initiative — it should also be to test where costly training needs to be focused to get the most results. A small investment in analytics can pay off significantly by making sure that the right training is given to the right people to drive specific results.
- Optimize content and information. When engaging employees, knowing what worked — and just as importantly, didn’t work — in terms of driving their internal engagement and external advocacy will be a key function that HR must master. Taking a page from marketing best practices, it’s crucial for HR to guide the strategic development and optimization of content and not delegate to internal comms.
If your organization wants to become more customer-centric, then developing talent that is focused on customers will be a key strategic asset that CHROs must bring to the boardroom table. Ensure that your CHRO has a place at that table, and the tools and resources to be able to execute on that strategy.