Reinventing HR as a centre of excellence for building innovation and agility

Reinventing HR could add much greater strategic value as a centre of excellence for building innovation and agility for future success.

From 2003 to 2007 I partnered with Professor Lynda Gratton of London Business School to lead peer learning groups of senior executives and HR professionals from large firms with European operations.

This was my most consistent period of engagement with senior HR professionals and it shifted my own perspective on their ability to add strategic value.

Prior to this my views on HR were formed over the previous 15-20 years helping senior executives throughout Europe, Asia and the US build innovative agile organisations, with HR mostly conspicuous by their absence from ‘the top table’.

That might seem odd, because innovation and agility are all about changing mindsets, attitudes and behaviours. But most of the senior business-focused leaders I worked with regarded HR as a cost centre, not a source of strategic value.

There were some exceptions – mostly organisations with more than average numbers of scientists, technologists, engineers and mathematicians driving innovation. But even here, mindsets attitudes and behaviours were more the province of the main business, not HR.

In summary, HR was mostly seen as a compliance function that was Hardly Relevant to creating a culture of innovation and building an agile organisation.

Reinventing HR – lessons from Quality Assurance

Reinventing HR - moving from inspection to assurance

Western firms were forced to learn some tough lessons from Japanese competitors during the ‘Quality Assurance (QA)’ revolution of the 1980’s.

Before that time ‘Made in Japan’ had been broadly synonymous with ‘shoddy plastic junk’.

But now Japanese firms were killing major Western industry leaders in their own markets. Former giants in electronics, automotive and other consumer durables all lost out heavily to Japanese invaders with competitive higher quality offerings.

Japanese industry had been quietly transforming by applying the principles of Total Quality Management (TQM) – aided in large part by Western ‘QA gurus’ whose ideas and advice had largely been ignored at home.

By embracing QA/TQM principles, Japanese companies had enabled and empowered the people who were actually producing products and delivering services to implement continuous improvements.

Up to this point, ‘quality work’ was mostly about inspection. Inspectors situated at the end of the production line (hopefully) caught problems before they reached customers. But they had little or no role in improving upstream design and manufacturing activities to prevent similar problems from occurring again – and again and again and again…

Reinventing HR - assuring performance by eliminating braking friction

QA/TQM emphasised the responsibility of everyone building quality into their value-adding actions and interactions, which eliminates the need for a separate inspection function.

This shift away from focusing on ‘inspection’ to focusing on ‘assurance’ involved a major transformation in culture.

Reinventing HR as a centre of excellence for building innovation and agility will involve a similar cultural transformation because in many organisations, HR still operates more as ‘inspection’ than ‘assurance’:

  • monitoring people performance;
  • moving people when they don’t fit;
  • mopping up when things go awry.

Reinventing HR – excellence in building innovation and agility

The world in which our organisations operate is intensely competitive and increasingly volatile, uncertain, complex and ambiguous (VUCA). To survive and thrive in the future, organisations will have to repeatedly recognise and respond to new threats and create and capture new opportunities.

And, despite the stereotype of the lone genius, most innovation stems from multiple people combining their different perspectives. An innovative agile organisation must therefore encourage diverse perspectives but avoid fragmentation into the fiefdoms, factions and silos that block organisational cooperation and collaboration.

When people adopt a ‘2D3D’ innovative mindset they naturally and automatically respect, value and actively seek out the different perspectives of others. A 2D3D mindset is one that recognises that each of us only ever has a biased, one-sided 2D perspective on the bigger picture 3D reality.1

One of the most important ways that organisations can develop these innovative mindsets is through Key Instigators – internal change catalysts who already have, or have a natural inclination to develop, ‘2D3D’ innovative mindsets themselves.

When senior executives ask me to help them get started with building an innovative agile organisation one of the first things I encourage them to do is identify and enrol one or two candidate key instigators.2

Reinventing HR as a centre of excellence for building innovation and agility means making the shift from ‘inspection’ to ‘assurance’. HR can do this by becoming the natural home for developing a cadre of key instigators to catalyse the adoption of innovative mindsets throughout the organisation.

  1. Find out more about the trap of 2D perspectives and how 2D3D mindsets unlock innovation and agility in this short video.
  2. Find out more about how I help senior executives get started on building an innovative agile organisation here.
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