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The CHRO’s challenge: Driving agile innovation

As HR managers become more agile, they still must focus on foundational programs

Future of Work|Talent|Total Rewards
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By Scott Snell and Cory Bronson | September 27, 2019

As HR’s processes are automated, HR can invest more time on strategic initiatives, innovation and business value creation, according to research from Willis Towers Watson and HRPS.

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About the study

The Future of the CHRO Study, a global research initiative exploring the rapidly changing role of the HR executive, is being conducted by Willis Towers Watson and HR People + Strategy (HRPS), the Society for Human Resource Management’s Executive Network. This research, designed to explore the growth and development of the HR executive of the future, consists of in-depth interviews with CHROs, CEOs, corporate board members, other C-suite executives and academics as well as a pulse survey of HR executives from organizations across a range of sizes, industries and countries. A comprehensive global report will be published in the fall of 2019. Readers can also look forward to complementary pieces exploring the key themes and findings, including blog posts, presentations, articles and videos.

To lead in an ever-changing world, today’s chief human resources officers (CHROs) must act swiftly, pushing through unfamiliar boundaries to find innovative business solutions. At the same time, they must continue to ensure the excellence of transactional HR programs such as pay and benefits.

HR leaders’ responses to this challenge will help determine how prepared they are to drive organizational capability and performance within an evolving ecosystem of work.

The new table stakes

The Fourth Industrial Revolution — with its attendant automation, robotics and artificial intelligence — is disrupting the world of work as well as the HR function itself. Powerful software and analytics are streamlining time-consuming transactional activities, from benefit enrollment to compensation management, while also enabling segmentation and personalization, shaping a more meaningful talent experience.

In the past, administering HR programs and compliance-related tasks was an HR leader’s primary focus. Today, these activities are considered to be “table stakes” — a minimum requirement — for HR executives rather than how they will bring value to the organization. Still, HR must devote time to foundational programs, which requires following HR technology trends, and continuously evaluating and updating programs in response to the needs of both talent and the business.

But as HR leaders become increasingly free from more administrative and process-related work through the use of technology and automation, they can invest more time in driving strategic initiatives, cultivating opportunities for innovation and accelerating business value creation. Initial findings from a global joint research initiative between Willis Towers Watson and HR People + Strategy on the evolving role of the CHRO highlight the new and emerging capabilities needed to grow and develop the next generation of HR executives.

Adopting an agile mindset

An agile mindset helps the HR executive power solutions that deliver business value. The concept of agility, however, transcends traditional change management models that imply a start and a finish, and often fail to keep up with the accelerated pace of change. Now, there’s a need for perpetual recalibration and reinvention — and curiosity — in the workplace, to quickly learn and adapt to shifting business conditions.

By adopting this mindset, HR leaders can intensify their focus on identifying and solving problems in creative ways. There’s less focus on the structure and ownership of problems and solutions, and more focus on identifying the root causes of problems then building the best teams to find solutions through ongoing cycles of iteration, testing and learning versus a linear “once and done” approach.

This emphasis on developing solutions in an agile manner requires CHROs to adopt a cross-business, cross-function attitude and aptitude. Additionally, they must develop a greater external focus to better understand how the external market is changing and to explore and identify potential solution partners and joint ventures.

Putting agile to work

But how might HR leaders implement a more agile way of working in practice? Some HR leaders are beginning with a hybrid approach. For example, in a leading multinational company, roughly a third of the HR function spends its time on traditional, transactional HR work, such as payroll and benefits; another third divides its time between transactional work and contributing to an agile business team in a particular area of expertise (e.g., workforce analytics), while the last third operates in a fluid manner with time allotted for solving high-priority business issues.

In another example, HR leaders in a financial services company collaborated with the business to implement agile release trains whereby talent in various roles from information technology to market research temporarily left their current roles and joined agile teams to develop and release innovative solutions to complex problems more quickly (e.g., developing a new product or enhancing an existing service).

Courage is essential

Respondents also stressed that forward-looking CHROs are courageous. It takes courage to make bold moves and test new ideas, implement them quickly and enable feedback loops to evaluate results.

But that’s not all that courage demands. Courage, as a CHRO, requires knowing when, how and why to discontinue existing programs or processes. As HR leaders continuously evaluate solution effectiveness, they must often make the tough decisions to let go of traditional HR beliefs and solutions, such as positioning the organization for future growth by emphasizing talent potential over experience in performance reviews or hiring decisions.

But which barriers might block HR leaders from exhibiting this courage? When asked this question, participants in a virtual focus group shared the following top three responses:

  1. The tension between “old HR” and the emerging world of HR
  2. Lack of senior/organizational support
  3. Lack of appetite for change

The following steps can help HR leaders overcome these barriers:

  • Build a culture where smart risk taking is valued and failure is viewed as a learning opportunity.
  • Develop pathways for HR staff to acquire diverse business skills in such areas as finance, technology and analytics. For instance, an organization might facilitate rotations in different parts of the business.
  • Build strong, trust-based relationships with the chief executive officer (CEO) and other C-suite members by staying ahead of trends and market developments, and helping the business to proactively identify growth opportunities.

Courageous CRHOs are reinventing HR to meet the demands of a constantly changing workplace. In addition to ensuring the effectiveness of foundational programs critical to the delivery of the talent value proposition, they are leading a new, agile way of working, thereby accelerating innovation and business value creation.

Previously in The Future of the CHRO Study series: Powering organizational success through culture.

Contacts

Scott Snell
Professor and E. Thayer Bigelow Research Chair, Business Administration, Darden School of Business, University of Virginia

Scott Snell received his B.A. from Miami University, as well as his M.B.A. and Ph.D. in business from Michigan State University. He currently serves on the board of HR People + Strategy.


Cory Bronson
Associate Director Talent Practice, Willis Towers Watson

Cory Bronson sits in Willis Towers Watson’s Talent Management practice where her primary client focus is in organizational transformation, digital enablement and future of work.


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