Episode Transcript
[00:00:03] Good morning, everyone. Today I'm going to talk to you about HR transformation a little bit, and the HR business partner. As many of you know, we've been working on the systemic HR model now for almost two years. And what we've essentially been uncovering, and we talked a lot about this at our conference two weeks ago, is the transformational change that's been going on in human resources from that of an administrative, bureaucratic, compliance oriented function to that of an advisory, consulting, data and systems function. Now, it sounds like a big bunch of words, but the real story is that in this particular business environment, which is accelerating in speed and more driven by technology and transformation than any time in my career, we as HR professionals need to think of ourselves as the consultants and advisors on the people issues and the people strategies and the people programs that allow companies to flourish and grow and innovate and make money. And that is completely different from filling out forms and submitting tax information to the government and making sure people are following compliance rules. I'm not saying that stuff doesn't have to happen, but you're not going to get any credit for that anymore. So in this journey towards this more evolved consultative function of HR, we have to think about how we're organized. Now. The organization models of HR for many years, certainly when I got into it, were centered around service delivery time and cost of service delivery. Let's recruit people as fast as possible. Let's train people as cheaply as possible. Let's allow people to get their questions answered as quickly as possible. You know, and maybe along the lines we'll do some surveys and do some things to make people happy and improve their benefits at the same time. And that worked in the 1970s, 1980s, into the early 1990s. But when we entered a war for talent and a labor shortage and a skills shortage and engagement shortage and now a shortage of commitment, in a sense, from workers, we really had to become more consultative now. And the organization structures that were created to facilitate the service delivery years of HR were called Centers of Excellence, where we took specialist roles and we put them into groups. It turns out there are 400 job titles in HR and the number keeps expanding. I won't belabor you with the details that's in the systemic HR research, but we're in a profession that is expanding. It's expanding in its breadth, in its scope and its importance. So if you're not careful, you're going to have a lot of specialist coes, you're going to have a diversity CoE, you're going to have a pay CoE, you're going to have an employee experience Coe. You're going to have a career Coe. You're going to have a leadership development Coe. You're going to have a general, high volume recruiting Coe. You're going to have a Coe focused on early hires, on people that are retiring.
[00:03:27] You get where I'm going is that we built lots and lots of specialist groups in HR, all of which had, you know, important roles to do important things, and it got too complicated and many of them did tremendous work. But now we have to stitch them all back together. And in order to do that, we have to create this thing we call systemic HR, which you can read more about as you join our membership. And many, many companies talked about it at our conference. We actually had a lot of companies benchmarking themselves against each other in systemic HR. And one of the hallmarks of this more consultative or problem oriented HR function, problem oriented, meaning you can solve a unique problem as opposed to selling a solution or delivering a solution that was pre defined find is this thing we call the business partner. Now, I've read a lot of the books about business partners over the years and the business partner role, and they're old, they're 20 year old books. Most of those ideas were built around this idea of the function being a bunch of coes and service delivery groups. And then the business partner was a local professional who lived and worked in the business, got to know the issues locally, in the manufacturing plant, in the retail stores, in the different countries or cities or business units, and just worked with management on their issues and then served as an ombudsman, in a sense, between the needs of those particular groups or those pods, as they're often called, and the Coes, to sort of buffer the Coes from handling lots of unique situations in different parts of the company kind of makes sense, but it's a little bit of an overhead job, if you think about it that way. And so what happened was, in the early days of business partners, they were what were called generalists because they were general and they were pointers or administrative assistants to help you get access to the information or the services you need from different parts of HR. You know, if I want to change my tax withholding or I moved or I had a child, you know, I maybe I don't know how to fill out the form or I can't find the right screen. And workday, I would just go to the business partner and say, hey, would you fill this out for me or tell me what I need to do? Well, that's not a particularly high value job, especially when we're going to add more AI and make things even easier to do for yourself. So what does this person do? As we just launched this week, a big piece of research on this. Generally what happens is we build little teams under the business partner and the business partner becomes the local vp of HR for that business unit. And that person has a recruiting team under them, an l and D team under them, and maybe a few others, specialists under them. Now you've got a whole bunch of HR departments. And we actually did a project last year for a company that had two to three times too many HR professionals because they built all these little business unit centric HR groups that were taking care of the needs of the local business executives. So that happens. And the business partner in that scenario is a more senior job. And those of you that become business partners aspire to those jobs because those are management or leadership roles and they tend to be mini vps of HR. And you learn a lot about the multifunctional aspects of HR, but operationally it's very unproductive to do it that way unless you can stitch these groups together. Because if the sales department in Germany needs a new hire program for, I don't know, some form of salesperson they're hiring, and the sales department in Australia also needs one of those programs and they're both run locally by those business partners. You're not going to get any sharing, you're not going to get any infrastructure sharing. You're going to probably have a lot of duplication, you're not going to get any learning, etcetera. So we don't really want, ideally in systemic HR, the business partners to be vps of HR. That is an evolution. That happens. But really where we want to go is we want the coes to be virtual and integrated and much more experiential in design. We want to have package solutions available for things like sales training, onboarding, management development, new hire, new manager training and so forth. And then we want the business partners to be consultants. And so in the evolved companies, the business partners are really like senior consultants and they oftentimes work in a pool. They may be assigned to a given business unit, but their job is not to replicate resources for that business unit, but to learn what's going on in that business unit and diagnose the problem and share it with others, to come up with innovative solutions and affect the rest of HR. So the rest of HR can lean in that direction. And so there may be a need to create a special CoE or pod of HR people for that business unit. That's not unusual at all. Of course, if you're a really fast growing tech company and you have 500 sales people and you're hiring another 500 more, you probably need a sales training group. You need a sales recruiting group, you need a sales leadership group. And so, you know, that group, which may be virtual for a while, would be led by this business partner. But over time, the business partner works on other things and operates more as a consulting resource than as a local HR leader, which just really puts them into another, in some sense, bureaucratic role. And now that we've gotten a chance to talk to a lot more companies about this, and we've been through what Mastercard is doing, what Lego is doing, what some of the healthcare providers are doing, some of the big insurance companies, this is a very powerful change. Very powerful. Now, that leads to the question, what is a consultant? And most of you in HR have had consulting opportunities to do consulting, but you may never have been trained or really taught what consulting is. Now, we happen to have a really fantastic course on this in the Josh person Academy. It's one of our most famous and most popular courses, called the HR business partner, or the HR consultant Masterclass. And Bill Pelster, who teaches it, has been a senior consultant all around the world for most of his career and went, what these roles look like in this more systemic model is very, very good relationship. People at getting to know senior leaders, understanding the nature of the problems in detail, not second guessing that the solution to the problem is something we already have, because it may not be. I mean, I used to laugh a lot when I was doing a lot of learning and development research, that if you're an l and D professional, the solution to every problem is training. And yes, every problem could be solved by training, but it may not be the right solution to the actual problem you're facing, even though it seems like training would help. So what we want to do as a business partner is really diagnose the situation clearly and then work within the rest of HR to bring the resources to bear from a pool of other consultants who can leverage the Coes and the solutions in place to solve that problem. And that solution may go on for months or weeks or years, depending on what the problem is. A great example of this was the Panasonic manufacturing case study, which we've written up. And actually, they were at our conference where Panasonic, being in the battery business, which is a very fast growing business, was having a shortage of capacity. By the way, Tesla is having this problem. A lot of companies are having this problem where manufacturer, the semiconductor industry as a whole is having this problem where there's just a shortage of manufacturing capacity. And part of that capacity is human beings. It's engineers, manufacturing, operations, staff.
[00:12:07] So everybody's trying to hire these people. And because the skills are hard to find, many of the people you hire are sort of trained, but sort of not. So they need to be trained on the process that goes on inside of your company. And you hope they're ambitious enough to learn a lot of new things in the process. So it was going on at Panasonic as the battery demand was exploding and the manufacturing engineers and managers were hiring lots and lots of people. So the business partner was working with the recruiting Coe to look at who was being hired, facilitate the process, try to monitor the impact and so forth. And what she found out as a consultant was that just delivering more humans in a faster rate wasn't really solving the problem.
[00:13:00] In fact, what she did discover, doing some analysis and using some data, by the way, with the help from some people, analytics technology they had, is that they were over hiring. There were so many new hires joining these manufacturing teams that there were people, too many people on shifts. The shifts were overstaffed, a lot of them were undertrained, and they had gone down the productivity curve of hiring. I call this talent density, by the way, talent density, which you can read about on the blog, is this idea that you don't want to over hire people that are under trained because your quality of output will go down and actually the inefficiencies will go up and you'll probably reduce engagement at the same time. So they were going through that problem, but the managers didn't know that because the managers really felt, because of the manufacturing pressure, that they needed more people to staff these shifts. She found out through analysis of the output of different parts of the manufacturing line compared to the input of who's being hired, that the shifts that had over hired were producing less output because there was more training and there was more unclarity and bureaucracy. So of course, the problem was one of talent density, but nobody understood that because most managers believe that if they can hire more people, they can get more done. But that's not true. There's actually a very significant diminishing return on over hiring. And sometimes you can over hire to the point that you get less done.
[00:14:45] That actually happens a lot. But you wouldn't know that if you're an individual manager, because you wouldn't necessarily have the data or even thinking about it that much. So she figured it out. And after several months of analysis and working with the manufacturing group that she was part of, I think she's part of one major plant, went back to them and showed them the data. And given that a lot of these people are engineers, they understood the data and they heard her and they believed her. Once she had the right data, and they sat down and changed their hiring strategy and training strategy to build a more productive team. She didn't need to have a whole HR department working for her to do that. I am convinced from the conversations that I have with many of you that these kinds of roles will be rapidly, will be extremely helpful in many, many parts of your company. I mean, let me just give you a sense of my life. In a given day, I may talk to two or three HR leaders in different companies, in different industries, and they have lots of questions and things they want to chat about. But usually there's something that's on their mind and they'd like to just get my advice, or they want to ask what kind of research we have or what we've done in this area. And so they'll throw something at me. Like one of the banks I interviewed a couple of weeks ago told me our new hire turnover is way, way too high. Would you please give me some advice? Should we be changing our universities that we source from? Should we be changing our recruiting process? What is your gut sense of where we should be going? And so I listen to these conversations, and because I've been around the block and talked to so many companies and done so much research, I can usually ask a few questions. It usually takes about 15 minutes, and we'll figure out what most likely the problem is. Not always, but we can at least get into the right range. And sometimes the problem that I point out isn't really what they asked me about. They asked me about a problem that seems to have a simple solution, but actually the problem is in a completely different area. So, for example, in the case of this particular company, I don't think there's anything wrong with their hiring at all. Actually, I think their hiring was pretty cool from everything I learned about it. But they had no concept of the first one to two year career, early career program for these people. They would come in to this company and they would be assigned to senior portfolio managers and other banking people, and they would be given projects based on what that person needs, and then they would be evaluated to see if they could stay and go on for other promotions. But those managers don't really know necessarily what to do with young people, and they're not in a developmental mindset because they have lots of commitments they have to meet. So the problem had nothing to do with recruiting, actually. It had to do with really the whole idea of what are we going to do with new people and what's our new hire development strategy, and how do we move people around and develop them quickly so they don't leave or get burned out the first year or two they're with us.
[00:17:58] I mean, it didn't take me very long to figure that out, but he may never have sort of understood that because he doesn't think that way because he hadn't had that experience. That's what the business partner should be doing. And then knowing the organization and knowing who's doing what and having a pool of people to help, he or she could amass a team to address that issue. And believe me, this is happening everywhere in companies all the time. That service delivery operation model for HR is actually getting in the way because we're being asked to, you know, do the things we do faster and cheaper, but we're not being asked to stop and reflect on whether the solutions we're building are the correct solutions for this particular problem. We call that falling in love with the problem, and that's really where the business partner role goes. Now, we have spent a lot of time on this. The very first course we built in our academy back in 2018 was in, was about the business partner. So if you really want to get some help with this, call us. We have developmental programs. We have an architecture. We can help you with skills, models and training, but you have to build this kind of capability in your company. There are, I guarantee you, regardless of whatever size your company you're in, there are people that want to have this kind of a career. It's a very fulfilling career. It's a great preparation for a much more senior role in a company. I think business partners are people in this model who should be rotated into and out of the company company into more line roles. So they have lots of expertise in the operations of your company.
[00:19:38] It is a career path upward that doesn't require you to have a bunch of people working for you, which there's not that many of those jobs in HR, by the way. So it's a very fulfilling career. So I wanted to give you that perspective today.
[00:19:54] Here it is coming on the summer solstice, as I know a lot of you are going to be thinking about this over the next year as we go through restructuring and flattening and adoption of AI tools. By the way, this kind of a role means that the business partner can be one of the big consumers and users of Galileo and tools like that, and then rolling Galileo out to line leaders and others so the business partner doesn't have to just be a hand to, you know, hands on consultant. They can be a technology consultant. They can get involved in data training, AI, things like that. Lots and lots of really important roles. Well, I hope that's a good little 20 minutes discussion for today.
[00:20:34] We have a whole bunch of exciting announcements coming over the summer in the Josh Burson Academy. I won't tell you what they are yet. They're coming soon. New courses and a whole new career experience for HR professionals. And I hope you're having a great summer. I know a lot of you are taking a little bit of time off, and we will be around and hope to hear from all you guys and keep in touch. We're starting the big reset again in another week or two. Those of you that haven't joined and would like to join, reach out to us and we'll let you know if you're qualified. Lots and lots of fun stuff to do there. Thanks, everybody. Have a great weekend.
