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How Do You Create Business Value?

By Adam Rampton

In the past three months, I’ve been to China twice, each time working with different Fortune Global 500 companies that are all wrestling with the same challenges: changing market conditions, accelerating competition, and the tensions inherent in trying to maintain local connectedness while ensuring global reach.

In a world of increasing volatility and change, more organisational agility is needed. This puts tremendous pressure on HR leaders and professionals who want to create business value – they are increasingly asked to maximise ideas and outcomes that are inherently in opposition to each other.

Some examples that HR leaders and professionals must effectively tackle include the following:

  • Achieving short-term results and long-term growth
  • Improving customer service with reduced budgets
  • Building collaborative teams and having individual accountability
  • Increasing speed to market and quality
  • Enhancing local relevance/connectedness and driving global brand unity
  • Doing more with less

The CHROs and HR leaders at the multinational corporations operating in China that I work with recognise that their HR professionals and business partners need help navigating these paradoxes and managing these tensions effectively. A new mindset and skillset is needed. The changing business environment requires it and demand is high. These CHROs are working to build the supply side so that HR is better positioned to create real business impact now.

In the seventh round of our global HR Competency Study (HRCS), two new interesting themes emerged:

  1. HR professionals who ‘navigate paradox’ have the highest impact on business results.
  2. Navigating paradox is not done well by HR.

Effective paradox navigators tackle conflict head-on and help their business leaders do the same. They shift from the traditional mindset of ‘either/or’ logic to one of ‘and/also’. These professionals focus on managing tensions that will unleash creativity and new insights.

Seem impossible? You’re not alone. To help you get started, here are four simple steps to strengthen your ability to navigate paradox and position your business for success:

CLARIFY THE POLES

Most business strategies fail in implementation because of unresolved paradoxes. Effective HR business partners will recognise these paradoxes and help their business leaders clarify the poles. What do we mean by “do more with less?” What short-term results are most important? How will we measure them? What does long-term growth look like? Where do we need to innovate?  How do we create space for and encourage experimentation?

Average leaders ignore one pole. Poor leaders swing back and forth or demand both. Great leaders see the inherent tension in both poles and bring the right people together to collaboratively clarify and address them.

DEFINE THE BEST ALTERNATIVE OUTCOME

Once the poles are clarified and we know what we’re trying to achieve, we work through a series of divergent and convergent processes to define the best alternative outcome. A useful tool is illustrated in the matrix below. This matrix helps to further clarify the poles where needed and, more importantly, provides the basis for divergent and convergent discussions to determine how best to move from current state to desired future state.

In this example, the strategy is to ‘achieve 20% EBIT while investing in long-term growth’. For each pole (light blue), the leader and team further clarify the poles by defining degrees of success (dark blue). Next, they identify where they are today and where they want to get in the desired future state (grey blocks). Spending enough time on this step helps the team align to define the best alternative outcome collectively.

SEE OTHER’S POINT OF VIEW TO FIND COMMON GROUND

The tool outlined in Step 2 helps teams see points of tension and begin unravelling paradox in a productive way. They are able to identify potential trade-offs. Effective leaders help the group converge (focus) using simple questions and then diverge (expand) to consider different options and viewpoints. They strive for integration, avoiding ‘either/or’ answers opting for ‘and/also’ solutions instead.

They ask questions like “where do we agree?” and “where do we disagree?” They listen.

In essence, good leaders and HR business partners lead through a series of divergent and convergent cycles to see other’s point of view and find common ground. This allows the group to align with the best alternative outcome and prepare to take first steps.

TAKE THE FIRST STEP

Built on the strong foundation created in the first three points above, these first steps should be easy to initiate. Outline specific first steps – things the leaders and teams will do in the next 3 days, 3 weeks, and 3 months – to demonstrate progress and maintain clarity. Sometimes these first steps will include two steps forward and one step backwards. Be consistent and help your leaders do the same by adjusting operating mechanisms, measures, and incentives to reinforce the desired future state. Take a whole-systems view to enable and sustain the desired change.

Paradox matters. It’s inherent in day-to-day and organisational life. Effective leaders embrace this fact and assemble the right stakeholder team to clarify and address paradox head-on. In HR, paradox navigation skills are the largest predictor of business impact. As HR builds this skillset, it will be better positioned to drive business results by helping leaders clarify the poles of paradox, define the best alternative outcomes, see other’s point of view to find common ground, and take the first steps towards the desired future state.

This article was originally posted on rbl.net

If you’d like to learn more about preparing HR professionals to navigate paradox, contact us at info@brg.co.za. Business Results Group is the exclusive Africa partner to Dave Ulrich’s RBL consultancy group.

 

Critical Lessons from Start-Ups for Human Resources

By Darryl Wee

The news is constantly discussing how digital start-up companies are disrupting their industries. Interestingly, when I examine these companies further, I find that many practices which are common among start-ups to drive more value in their businesses that HR should also consider adopting.

Are there lessons that HR can learn from start-up companies?

1. Start by Resolving Pain Points

When I listen to CEOs from successful start-ups describe the ideas behind launching their companies, 95% of the time the business was designed to resolve a real-life problem they faced: a specific pain point.

In HR, we should adopt a similar perspective, by looking at organisational pain points. Notice I refer to organisational pain points, not only HR pain points. HR can create the most value by looking outside of our core function and to the entire organisation.

In order to do this successfully, we must approach the pain point from the perspective of the customer and the business as a whole. We must examine how, as an organisation, we can resolve an issue for the business or customer. The solution may bring us back to some HR policies or practices; however, our analysis should not begin inside the HR function. It is important that we look at the issue strategically and from the outside-in, and not from the inside-out.

I am not suggesting that as HR we should not represent our function, or use our functional expertise to address said issue, but I have found that when HR operates as a business leader rather than just as a functional expert, more value is created. The business as a whole benefit from another pair of eyes, analysing an issue with an external lens. Once we have clarity on the pain point and how we may want to respond, we can then add our HR lens to explore additional solutions.

If we are looking at resolving HR pain points, let’s put ourselves in the shoes of our employees and honestly look at what is and is not working. In order to make a real impact, we must minimise our emotional defensiveness from the perceived effectiveness of an HR solution, and really listen to what our customers are telling us.

2. Think Big, Test Small, Learn Fast

After launching their products, start-ups develop, improve, and adapt when necessary. Frequently, after these numerous improvements and tweaks, the original value proposition of their product is significantly different from the end result.

In many larger organisations, there is an expectation that the product be 100% perfect prior to launch.  I hate to be the bearer of bad news, but no matter how much we plan, unexpected things can happen that we are not prepared for. While I do believe that we must be very thorough in our work, I also feel that a more agile approach allows us to react more quickly, focus on solutions, and accomplish more optimal results.

The ‘think big, test small’ methodology is being implemented throughout many organisations. I have noticed that even government ministers are using this terminology. I would believe in this concept but take it one step further: ‘learn fast’.

For years, Dave Ulrich has inspired HR and business leaders to ‘think big’. From my perspective, we should always plan our actions in order to have the most significant impact on the entire business. By thinking big, however, we should not be deterred by the size or complexity of the issue or solution at hand. ‘Testing small’ is an excellent means of quickly piloting a solution to ensure its feasibility and scalability. Start-ups constantly send prototypes that are 70-80% finalised for beta testing with the intent of receiving meaningful feedback before the full product launch. The company expects imperfections but is committed to obtaining insights into potential shortfalls and oversights as quickly as possible. This agile approach allows organisations to act swiftly in refining the product before the final launch.

The third element is to ‘learn fast’. Testing small is not effective or useful if we are not learning from customer feedback to adjust our products and solutions accordingly. In some cases, we see companies rapidly realising a more compelling and practical application of a solution or product, so they ‘pivot’ their focus entirely. As HR, we should also learn how to be agile, and pivot to boost our organisation’s value and total impact.

I am sure that there are many additional lessons we can apply; however, in following the theme of this article, I believe that HR can actively help reduce organisational and individual pain points by ‘thinking big, testing small and learning fast. Utilising this methodology, we will increase our impact on the people within our organisation.

This article was originally posted on rbl.net

Contact us at info@brg.co.za to equip HR to drive more value in your organisation. Business Results Group is the exclusive African partner to Prof Dave Ulrich’s RBL consultancy group.

 

Honest ‘Conversations’ replace traditional Performance Management

by Nicola Tyler 

Companies around the world are starting to question the efficacy of what we might term “traditional performance management”. Senior leaders report that they have abolished performance appraisal at their companies because it causes so many problems. It’s clear that performance management faces a substantial paradox.  On the one hand, employees and managers all acknowledge that it is often the most loathed HR practice; research suggests that most current performance appraisal systems do not work well.  On the other hand, accountability does matter.  Research shows that companies with performance evaluation systems have higher shareholder returns than firms without them.  Research also shows that, out of many HR practices, performance management and variable pay have the most significant impact on financial performance of organisations. Without accountability, employees don’t perform as well; they are unlikely to change and unlikely to perform better.

So, performance management faces a conundrum.  If we don’t do any performance management, accountability declines and performance lags.  Yet if we have complicated processes, employees become frustrated and again, performance lags. According to research by global HR guru Professor Dave Ulrich, the paradox of doing or not doing performance management can be (at least partially) resolved by focusing more on positive accountability through conversation more than process.  

Once we focus on dialogue, performance becomes much less about forms to fill out, procedures or policies, and much more about the conversation between a manager and an employee, or among employees on a team. Can a leader have a candid, thorough, positive, and specific performance conversation with their employees? This is where the key to effective performance accountability lies. Affirmative conversations of this type shouldn’t be occasional meetings in the diary but rather an ongoing process of regular interaction.  Over time, the employee gains a “growth mindset”, which means that the employee conversation emphasises learning – what can be improved more than focusing on what has gone wrong.  These conversations all focus on the future, not the past.  For example,

  • They tackle behavioural problems without judging the person.  
  • They validate the person and his or her potential more than casting suspicion.  
  • They focus on learning from both successes and failures rather than critiquing.
  • The conversation is not about the forms, tools, or processes, but about creating a positive relationship between leader and employee.  

Companies like Adobe and Accenture have successfully implemented positive performance accountability systems. At Adobe, employees are evaluated on the basis of what they achieved against their goals, rather than how they compare to their peers. At Accenture, employees focus less on their ranking and more on the value they create. When conversations matter more than processes, the focus is on value created rather than on chasing employees to complete HR forms. When these conversations focus on the positive and what is right, they build positive accountability. When employees take personal responsibility, they create more value.

A good business leader and manager will:

  • Focus more on what’s right than what is wrong.
  • Offer immediate and timely feedback and feed forward to employees.  
  • Help others feel better about themselves.   

In turn, employees who receive positive performance conversations recognise how their personal aspirations can be better realised by delivering organisational outcomes.  

It’s true that most employees do not like bureaucratic appraisal processes that monitor performance, belittle employees, and focus on what is wrong.  But accountability matters. Some trendsetters would go so far as to say that work teams should feel an obligation to act in line with company values, to be more deeply committed to outcomes. Without accountability people don’t improve, they lack a sense of purpose, and organisations miss their targets.  In South Africa we need to focus much less on performance appraisal as a bureaucratic, annual process. Instead, we must focus much more on performance accountability where leaders hold positive conversations with employees, mutually establish expectations, implement accountable reward systems, and follow up on performance. Perhaps we should replace the Performance Appraisal with a Commitment Contract or a Purpose Contract.

Nicola Tyler, is a highly respected strategic thinker. With over 20 years of experience in Strategy, Consulting, Leadership, Development and Coaching, she is an Associate of the Gordon Institute of Business, a Master Trainer in a full range of de Bono Thinking tools. Working both locally and internationally, she delivers her own “Strategic Conversation” methodology to senior teams committed to innovation and driving sustainable results. Nicola has shared the stage with world renowned thought leaders such as Tom Peters, Robert Kaplan, Ricardo Semler, Edward de Bono, Dave Ulrich, Martin Seligman, Richard Koch and Martin Lindstrom. 

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