More than sticks and boxes: The future of the HIHR operating model

Insights from IMPACT posted on April 17, 2019

It’s time to get out of your comfort zone, shed the traditional structures of the past, and reinvent your HR operating model. This was the message—delivered loud and clear—at Tuesday’s IMPACT 2019 session focused on helping HR leaders understand how to transform HR operating models to better fit their organization and its goals.

Led by Denise Moulton, vice president, HR and talent research leader, Bersin™, Deloitte Consulting LLP, and Jeff Mike, vice president, HR research and Ideation Team leader, Bersin™, Deloitte Consulting LLP, the session also featured the HR transformation experiences of Tod Day, global HR transformation manager, shared services, at Bechtel Corporation.

For too long, Moulton said, HR organizations have been relying on traditional operating models that can no longer support business in the age of the social enterprise. These outdated models are reinforcing silos, stifling innovation, and perpetuating an HR-centric approach to operations and service delivery that is not reflective of where the business is today or where it’s going.

Deloitte’s High-Impact HR study confirmed that hierarchical structures—the “sticks and boxes” approach—no longer make sense1. The research revealed that the highest-performing HR teams are pioneering, personalized, and agile—both in shaping the future for their organizations and in developing the solutions, capabilities, and talent to drive business value. Specifically, high-performing organizations are 3.5 times more likely to focus relentlessly on user experience when designing HR offerings. They use technology to rethink—not just automate—work activities. They are blowing up the boxes by breaking down silos, fostering teams, and integrating closely with the business. And they are regenerating their operating models to become fit-for-purpose and continuously develop capabilities to meet the needs of the business.

HR leaders can learn from these pioneering behaviors as they address the big questions and challenges ahead, including:

  • How can HR become more agile and adaptable to speed the delivery of services and expertise?
  • How can new technologies, such as cognitive and machine learning, support an agile and productive HR function?
  • What are the emerging capabilities HR needs to develop, apply, and flex to stay ahead of changes in the enterprise and the workforce?
  • How can HR structure and govern itself to take advantage of the new technologies, insights, and expertise being brought to the function?
  • How can HR create consistency of experiences across the business?

There is an unprecedented opportunity, asserted Mike, for HR to lead the transformation to an operating model that supports the future of work, the workforce, and the organization. Multiple capabilities are key to this effort:  understanding jobs at the task level, deconstructing and reconstructing roles, simplifying HR activities in the flow of work, focusing on the customer experience, teaming to break down silos, and keeping the unique needs of your organization always in view.

Tod Day could attest to the need for all these capabilities as he shared the HR transformation journey he is leading at Bechtel, a privately held engineering, procurement, construction, and project management company that operates around the world.

Transforming shared services was the catalyst to transform the entire HR model as part of the function’s 2020 vision to be world-class at recruiting and deploying people to win and execute projects. After almost a year of benchmarking, Deloitte worked with Day to design and execute an impactful operating model—starting with the critical work activity assessment. Together, they surveyed every employee in the shared services group to understand, inventory, and categorize everything each employee did and the time it took them to do it. The exhaustive exercise provided a detailed data set, which was critical to all stages of the model development and deployment.

Bechtel’s new shared services model now features:

  • An executive leadership team that translates business strategy into the HR mission
  • Communities of expertise focused on rapid innovation
  • Business-unit HR that serve as advisors
  • People operations (the largest group), which is dedicated to service delivery

The new model is underpinned by a global, scalable technology platform, as well as process and policy enablers.

The benefits? The new shared services organization provides business-aligned services on a global scale that are easier to navigate and less expensive to manage.

The hardest part? Getting people in the business units to give up some control over resources so HR could add more value to the business.

Day’s closing takeaways were not only instructive, but inspiring to the HR leaders in attendance, many of whom are themselves currently planning or leading similar transformations.

  • HR transformation is a strategic business imperative and differentiator, not an HR initiative.
  • Have a clear vision for where you are going and design for the long term.
  • You need solid business sponsors—not just the CHRO, but the CFO and CIO.
  • Bottom-up data is key—people can’t argue with the facts.
  • The HR strategic business partnership has arrived.

Coming soon! Stay tuned for Bersin’s High-Impact HR Operating Model research, with additional data and stories to help organizations create HR operating models for the new world of work.

Seven High-Impact Findings to Redefine HR, Bersin, Deloitte Consulting LLP / Jeff Mike, EdD, 2017.

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