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

Reinventing HR would allow it to 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 perspective on their potential to add strategic value.

Prior to this my views on HR were formed over the previous 15-20 years helping people throughout Europe, Asia and the US build innovative agile organisations, in which HR were mostly not involved in any strategic role or capacity.

That might seem odd, given that innovation and agility are all about people, their mindsets, attitudes and behaviours.

But most of the senior business-focused executives who hired me 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, concerns over people’s mindsets attitudes and behaviours were more the province of the main lines of business, not the HR function.

HR was 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 lost out to Japanese invaders with higher quality offerings, often at lower prices.

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 empowered the people who were actually producing products and delivering services to make continuous improvements.

Up to this point, ‘Quality Control’ had mostly involved inspectors placed at the end of the production process to (hopefully) catch problems before they reached customers. But these inspectors had little or no involvement in feeding back upstream what they’d observed to help improve design and manufacturing activities so similar problems didn’t happen 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, thereby reducing or eliminating the need for end of line inspection.

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 the mess when things go wrong.

Reinventing HR – excellence in building innovation and agility

In many organisations, HR is being renamed ‘People and Culture’, ‘Culture and Organisation’ or, following Google’s example, ‘People Operations’.

When this change is not in name only but reflects a genuine shift in focus, capability and activity, HR can make a significant contribution to creating a culture of innovation and building an agile organisation that can leverage new digital technologies like Blockchain and AI.

But if it fails to do so, technologies like these have the potential to take over much of HR’s traditional bread and butter work.

This presents HR with two options – either grow into importance or shrink into irrelevance.

Growing into importance may seem like a big ask for HR functions that have traditionally been compliance-focused and mainly dealing with recruitment, assessment and shared service delivery.

But there is a way that HR professionals can step up to this challenge without it being such a major stretch.

When senior executive sponsors bring me in to help build an innovative agile organisation, one of the first things we do together is bring on board one or more internal change champions who already have, or have a natural inclination to develop, a ‘2D3D’ innovative mindset.

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.

Cultivating innovative 2D3D mindsets is the lowest risk, highest leverage way to unblock, unlock and unleash organisational innovation and agility. 1

Reinventing HR as a centre of excellence for building innovation and agility involves HR making the shift from ‘inspection/compliance’ to ‘assurance’ as the focal point for cultivating the capacity of internal change champions to encourage the systemic adoption of 2D3D 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.
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