Enterprise 3.0: Why HR is the Heart of Any Fully Integrated Business
The disruptive force of the Digital Transformation is redrawing the organizational chart as a living body, with HR at the center of it. Technological advancements have given HR the tools it needs to shape workplace culture in a way that enables employees to thrive. Big data, analytics, and Artificial Intelligence (AI) have all helped bring into focus the fact that employees thrive when their work is meaningful and rewarding. This awareness has the potential to transform HR into a strategic partner that innovates employee success. That sounds great, but how do we get there? It helps to know where HR came from.
HR’s Traditional Role in an Organization
In this blog post for the Harvard Business Review, Jeff Gothelf shares details about a previous client, perfectly illustrating what holds many HR departments back from reaching their full potential. The client had adopted Agile practices for other areas of their business, with a high degree of success. However, when it came to HR, Gothelf explains that “the manufacturing-era qualities of individual heroism, delivering product on deadline (whether proven or not), and contribution to high-level, often unaccountable business metrics were the main determinants of employee competence, success, and promotion.” This is where the crux of the problem lies — even in organizations that have integrated Agile methods throughout most areas, HR is still doing what it’s done for decades. This mismatch holds companies back from entering the 21st century. HR needs to let the Digital Transformation in and adopt the methods and practices that make Agile software development teams fast and efficient.
The Impact of the Digital Transformation on HR
Advances in technology have had a profound influence on how, when, and where we work. Big Data, analytics, and AI are available to aid HR employees in detecting data patterns that can easily be missed by the human eye. Data visualization software makes it easy to interpret the massive amounts of data and respond with decisions made in real time. 360 Feedback is a tool that empowers HR managers to make informed decisions that improve working conditions and culture.
It’s not just technology that the Digital Transformation brings; it’s also a complete change in mindset. Periodic performance reviews and metrics based on outdated manufacturing cycles are too rigid and slow for the pace of a business. To become the heart of a fully integrated organization, HR needs to adopt the same beliefs and values found in the Agile Manifesto and its 12 Principles. To roughly paraphrase Gothelf, a fully-integrated HR department would be a highly collaborative team that is employee-centric, invested in team culture, and committed to continuous improvement — quite a contrast to the approach currently taken by most HR departments. As a team, HR would need to integrate employee-oriented processes and practices into every area of business operations. This would include frequent performance reviews, feedback from employees, continuous training initiatives, and other efforts that boost employee engagement and satisfaction.
Impact of Technology in the Workplace
Information is both the blessing and burden of technology. We now have access to more information than we did at any other time in history. Technological advances have led us to a much deeper understanding of how things actually work. Big data, AI, and machine learning have provided us with the tools we need to collect information and interpret it in ways that were, until recently, impossible. The ability to gather feedback and analyze it in real time has made it possible for HR to formulate a strategy that allows continuous improvement in work conditions, workplace culture, and employee engagement.
Advances in computer technology and the internet have opened the doors to new, innovative ways of working. 43% of Americans work remotely or from home on a regular basis, according to this article in the New York Times. The very meaning of ‘workplace’ is being redefined as telecommuting, remote work, and work-at-home jobs become mainstream. This is not the only thing that’s undergoing reinvention — the traditional 9–5 schedule is being replaced by flexible work hours that allow employees to work when they are most productive. The response to this has been overwhelmingly positive — people with family members they have to care for, parents with young children, and individuals returning to college consider this flexibility a major selling point. In some cases, prospective employees are willing to work for a lower salary in exchange for a schedule they can fit around their other responsibilities. HR departments that embrace these trends and work with them find it easier to attract and retain new talent.
The Fully-Integrated Organization
The functional silos of yesterday are no longer suitable for today’s business environment. The rigidity of traditional silos made it difficult for companies to adapt to change. In a fully-integrated organization, silos are replaced by highly collaborative teams that work together toward business goals. In most cases, teams that communicate frequently are much more productive and quicker at producing results. The flexibility of collaborative teams makes the entire company highly adaptable and capable of swiftly responding to changes in customer needs and market fluctuations. In this context, HR has the potential to become the heart and soul of the organization through the way it looks after all employees.
The Impact of Horizontal Integration on Employees
Horizontal integration is where functional silos are replaced by highly collaborative teams that work toward shared business goals. This transition is a difficult one — everyone from the C-suite down has to completely rethink how their business operates. However, the companies that have chosen the path of horizontal integration have made a surprising discovery — employees working in collaborative teams are more engaged and find their jobs much more rewarding than those who work in traditional silos.
In an effort to adapt to this new way of working, some HR managers are beginning to partner with marketing departments to create marketing strategies that tout dynamic, highly collaborative work environments with flexible work arrangements. This appeals to potential employees who are looking for meaningful work and not just a paycheck. This new approach is paying off for some companies, too — according to this Business.com blog post, Millennials view Google, Apple, and Facebook as ideal employers.
The Benefits of the Fully-Integrated Organization
When an organization integrates its business functions horizontally, virtually all the old barriers and conflicts are eliminated. Once departments realize they no longer have to compete against each other to attain their goals, efficiency and productivity increase. Employees also enjoy their work more and feel that they are making a genuine difference. Deeper engagement leads to increased productivity and higher employee retention, and product quality improves as employees personally invest themselves in their work.
HR has an opportunity to create a vibrant work culture that naturally attracts the right kind of talent for the company. Initiatives that emphasize teamwork and align employee passions and career goals with business goals increase employee job satisfaction. Individuals who participate in a collaborative environment with high levels of personal engagement invest themselves in their work. The result: increased productivity and product quality.
Businesses are beginning to see the genuine value of their employees, with some making HR a partner in business strategy. As competition for top talent intensifies, organizations may be realizing that without human capital, there is no business.
