Thought Leaders' Breakfast discussion: HRPS Annual Conference: April 15, 2007.

Scenarios for the Future of HR

What happens when 40 senior HR executives, management academics, and leading HR consultants come together to discuss the most likely scenario for the future of the HR profession? The background for this year's HRPS Thought Leaders' Breakfast conversation was the HRPS 2007 conference theme "HR at The Tipping Point." The breakfast discussion traditionally has served as a platform for launching the themes covered throughout the three-day HRPS conference. Multiply the diversity of the opinions in the breakfast meeting by 300 conference attendees, and you find that issues of HR professional identity and functional roles never go away.

The provocative new question presented to the thought leaders was: "Are you the group best positioned to be more visionary about the future of HR than the rest?" Even though most of the participants in the room have been through the evolution of HR over the last 20 plus years, their answer was an unequivocal yet ambivalent "yes" and "no." The bottom line question was: Who is going to define the future of the profession? The veterans might not have all the answers--but who would?

One HR leader participating in the breakfast compared the kick-off visioning exercise to Second Life, an online social network in which community members design and play out multiple scenarios unparalleled in their "real" lives. As the breakfast group agreed to disagree on many issues and approaches, the final outcome on future HR was an unexpectedly contemporary, Wikipedia-like answer, embracing a range of views from the breakfast group. The group agreed that the future of the HR profession will not be the sole domain of a few academic gurus and consulting stars.

At this point in its history, the HR profession finds itself at the cusp between the old and the new. Contrary to often-cited hyperbole, corporate hierarchies are not yet vanishing amidst the profound changes caused by radical new models of service and production. As the employment contract between organizations and incoming talent is renegotiated in response to these changes, the HR function is still charged with "keeping the wheels on," while helping companies prepare for the future talent wars.

Three Levers at the Tipping Point

The breakfast discussion brought out three important aspects of a potential "tipping point" situation for Human Resources: external drivers, internal tensions, and functional boundaries.

1. External Drivers. The group agreed unanimously that the HR tipping point will be shaped largely by outside influences. These include demographic trends, the hypercompetition, and the weight of legislative burdens that forces CEOs into the revolving doors of shrinking tenures. External trends are easy to observe and analyze, but their immediate implications for organizations are much harder to understand. Pragmatically speaking, external trend analysis by itself is not enough to get HR leaders any place at the table.

2. Internal Tensions. The internal tipping point derives from internal organizational knowledge, the emergent and organic changes affecting business from within (process improvement, Six Sigma, TQM, MBO are the early examples of this insider knowledge driving the change agenda). Professor Lynda Gratton of the London Business School spoke in her keynote about the organizations that have "hot spots," the work places where the role of the employees is to be the principle "sources" of business innovation and change.

3. Functional Boundaries. The tipping point event for the HR function comes as the third, but not the last, component of the change. The engagement contract for HR is being renegotiated at all levels in the organization: with the board, with the CEO and the senior management, as well as with employees and the supplier and customer network. HR is expected to change from passing on rules and enforcing policy to becoming the astute architect of an organization's ability to sustain itself and prosper; for example, see Jeana Wirtenberg, et al., on "HR's Role in Building a Sustainable Enterprise: Insights from Some of the World's Best Companies," Human Resource Planning 30(1) (2007): 10-20.

The questions faced by HR are no different from those that have been asked of other business support functions such as finance, legal, auditing, technology, and communications. To varying degrees, all such support functions struggle to provide convincing answers. For HR, see, for example, John Boudreau and Pete Ramstad's "Talentship and HR Measurement and Analysis: From ROI to Strategic Organizational Change," Human Resource Planning, 29(1) (2006): 25-33.

What the Future Holds

Two sets of formal HR future scenarios were presented to get things rolling, each one representing a different perspective on HR.

1. A recent report by SHRM looked at four possible roles for HR in the future:

a. Casting director (scarce US talent in a robust global economy);

b. Global deal maker (surplus of US talent in a poor US economy);

c. Caregiver (fortress America and scarce availability of talent);

d. Systems integrator (surplus of US Talent, technology rules).

All four blueprints took a macro level, US-centric approach to HR and cast the function in a broker/negotiator role between the United States and the global talent markets and between US corporations and individual knowledge workers. The HR functional success was defined "from the outside in" as contingent on the powerful external drivers such as government, technology, and globalization.

2. The second report by i4cp (formerly HRI) also looked at four possible future roles for HR:

a. Niche expert (HR focus is on core expertise; the center of excellence functional structure);

b. KRO (knowledge resource officer appointed from outside to lead the HR function bringing together technology and HR expertise);

c. Absorbed by the work (decentralized HR, absorbed by the business unit, led by an HR expert);

d. Selection by election (decentralized HR, HR expertise no longer concentrated in one function: other functions compete for the talent management roles)

The i4cp report took the intra-organizational view of the HR function. It put two factors for the HR "survival" in the foreground: (i) the vital importance of business relevance of HR; and (ii) the enabling power of technology to deliver HR services. According to this "inside out" organizational view, other functions might be in a better position to do the HR job, with HR functional experts not able to survive the competition.

Neither of the two scenario sets provoked much of a discussion in the audience. The problem with the scenario approach was that the answers were prepared before the audience had agreed on what questions should be asked. In the course of the meeting, the thought leaders went to the "source" and focused on the search for the right questions, not the pursuit of the right answers.

This search led to another set of scenarios that came up indirectly in the discussion of the HR role in the issues of enterprise sustainability. These offered future options that were both simple and compelling:

1. Things fall apart (HR plays little or no role in sustainability);

2. Muddle along, downward spiral (HR again plays little or no role);

3. Bright future: We all pull together and support the triple bottom line model of business success. HR brings to the table its skills in fostering collaborative networks across sectors, institutions and boundaries, organizational development, transformational change. Most importantly, HR helps attract, develop, and promote the right talent in the organization.

From here the conversation hit upon a variety of topics. Then the group landed at the answer that was impossible to avoid regarding the evolution of HR: "It's the Talent, Stupid." (See, e.g., Marcus Buckingham and Richard Vosburgh's article "The 21st Century HR Function: It's the Talent, Stupid!" Human Resource Planning, 24(4) (2001).

It came as no surprise that the most important value that business is looking for HR to deliver is the quality and sustainability of the talent pipeline. HR is tasked to understand how the external talent markets work. HR also is expected to master the laws and art of internal talent development, both for the business and to bring top HR talent to work on top business talent issues.

The scenarios for Talent, with a capital "T," surfaced as the discussion's ultimate destination. At once, HR strategy became talent strategy and people management became talent management. If the new science of HR really takes hold (as John Boudreau and Peter Ramstad have proposed), HR would be about "talentship," true leadership in the talent market. If this occurs, HR will need to have the capability, capacity, and competence to fulfill the following business mandates:

1. Understand and calibrate business talent needs (current and future);

2. Understand that new talent might look very different from the people already on the inside (global diversity, baby boomers, and next generation all living together under one roof);

3. Know where to find and how to place talent (globalization and localization);

4. Agree on how to retain talent (engagement in the free agent economy);

5. Reward talent (equitable compensation linked to performance management);

6. Grow talent (leadership development);

7. Be experts on replenishing talent pools and planning for talent risk (succession planning); and

8. Know how to measure the here and now and prepare for the future (intangible and tangible metrics).