Episode Transcript
[00:00:00] Okay, it's the weekend before irresistible and I have a lot to talk about when I get down there. But I wanted to start the weekend with a really important concept which I think matters to most of you listening to this is why does the HR department exist? And obviously having done this for almost 30 years, I have lots of perspectives and opinions. I went through the SHRM website and I found almost nothing to help. And I know everybody has different opinions about this and, and while I was thinking it through and doing some research, I ran across the word called hrification. And if you take the word HR iFoodation and put it into Google, you will find a long list of somewhat scathing articles about how the practices of HR ruin other things. In fact, I want to read you something from an article in the Atlantic about how the HR ification of the Democratic party lost the last election. And what he said was, and this is from a writer, I'll put a link in here. Quote, I have suffered in HR dealings, but I cannot blame these representatives personally. I never resented the actual practitioners for a of HR for being made to implement their mind numbing training videos or distributing their jargon laden rule books, for being the gendarme of liability avoidance. But I don't want to live under that regime if I don't have to. In other words, many people believe that the reason HR exists is to support the policy or police force of the organization. When there's a layoff, it's always HR that does it. And the leaders don't tend to take a huge amount of responsibility anymore, especially now. And then there's this question of there's three audiences that we represent and which one is the one that you think of first? Are we representatives of the company? Are we representatives of the police or the legal entities to force compliance? Or are we representatives of of the workers or the employees or perhaps even the customers? Obviously it's all of that, but the history of this profession is, is really a problem because in the new world of what we call HR 2030, things are going to be very, very different. And I'm not going to let the cat out of the bag about what we're going to be talking about next week. But let me give you my informed opinion, I guess I would call it, and you can decide whether you like this concept. The history of this profession goes back to industrial businesses where we had management and labor and the lab labor was workers doing hourly work in rather routine jobs. And there was a set of business processes and pay practices and hiring practices to hire and Manage and pay the labor. And then there were a set of things we did to promote and develop and select leaders, managers and labor. And then there were labor unions. And so HR had to deal with the relationships with labor unions. And in those companies, the labor relations or labor issues were very, very important. And they still are in healthcare and many are unionized. And so the HR department, and especially in countries like Germany, where we have works councils, does a lot of the work of negotiating and managing the relationship between management and labor. And I don't know that that's ever going to go away. But that's where it all sort of began. And most of what HR did was behind the scenes. We didn't see them that much unless there was something bad going on. And the people that went into it were not business people per se, but they had more administrative or compliance backgrounds or interests. And of course, 73, 75% of the people in HR are women. It's going down a little bit. It's closer to 70% now, but it's still very high. And so there was always this idea that the HR department was the people department and the touchy feely human part of the company. Now, over the last hundred years or so, moving up to the age of AI, the role of human capital got much, much, much greater. I mean, enormously greater. We've almost flipped the switch entirely from management and labor to labor, driving all the value. If you're Starbucks, if you're Boeing, if you're intel, if you're Nvidia, if you're Google, if you're Microsoft, if you're JPMorgan Chase, if you're Walmart. The labor, the people, the human beings are delivering the product and the services to customers. They are inventing things, they are developing things, they are creating things. They are the most important asset you have. Whether you think that way or not. They are, and they are the only appreciating asset you have because as you train them and develop them, they become more productive. And we suddenly are in this role of not managing the relationship between management and labor and thinking of labor as a replaceable entity, but rather developing and building and growing and supporting the power in the company that creates and develops and delivers services to customers. Very, very, very different. Now. The legacy that we brought with us from the old days is things like learning and development, talent acquisition, diversity programs, pay programs, payroll systems, hour issues, overtime rules, lots and lots of things, many of which were legislated that we had to bring with us. Fine. So we have to deal with all that, but the job, as we become more automated, especially with AI, is not really focused on that anymore. Because in the world of agents, most of those compliance related issues are going to be automated. And as you see when we show you the framework and the blueprint we're building for HR 2030, it's not going to be hard for you to figure this out and see how this will work. So within a few years, I'm not saying immediately, many of those kinds of activities will be much, much less time consuming. And there'll be, there'll be anomalies, of course, to deal with, but you won't be focused. That's not really going to be your job. And you'll see the competency model we have for HR before and after AI explains that. So what is left? If you really conceive through where we're going with all this technology and dynamic delivery of information and dynamic assessment of skills and dynamic assessment of candidates and so forth, we're moving to a world which I call dynamic enablement for growth. That is a kind of a big phrase, but it means a lot. Growth of the individual and growth of the business. Dynamic enablement means that at any point in time, when we need human capital, human beings, value creators in our companies to do different things or do things better, or align in a different way, or go after different markets, or work on different technologies, or move to a different country or whatever, we are there to facilitate that dynamic change and that dynamic improvement. And as most of you know, when we did our research on the dynamic, dynamic organization, what we found is the most high impact process that drives value in a company is creating a more dynamic company. If you're stuck in your ways, you're going to fall behind your competitors. That's just the way the business world works. So being dynamic and creating dynamism in all of its aspects is a hugely important thing. And in the case of people, it means a lot of things. It might mean training, it might mean hiring, it might mean redeployment, it might mean cultural things, it might mean solving problems, it might mean dealing with disputes, it might mean setting goals, it might mean performance management, it might mean succession management. All of those jargony things that we throw around in HR are tools now, not services. Tools in service of dynamic enablement for growth. And I like to say growth of the company and growth of the individuals.
[00:07:30] Because as appreciating assets, we want our people to grow and our company to grow. Because if the people grow, the company grows and the people stay and the engagement level and the productivity and the performance is greater. So we, we really own a big thing. And when you sort of rethink your job that way and think, think as a, as a profession, not as an individual, then all of a sudden these COEs or service centers that deal with compliance issues or training programs or onboarding checklists and things like that are really not products or solutions. They are means to an end. Now, by no means am I naive enough to say that they're going away. They're not. All of those services in HR have to happen somehow. And they're not going to get automated by AI overnight are within the next three to five years. For sure. We know this in L and D, we know this in talent acquisition, we know this in performance management, we know this in skills assessment, we know this in leadership assessment. Within a few years there will be personal AI that each of us will have in our companies that represent our capabilities and our activities. And the company will have data and information and tools and intelligence that will allow us to meet those needs. Without giant coes with lots of people behind the scenes filling out forums and building stuff, there will be some of that. It's not going to go away quickly, but certainly the way our data plays out, 30 to 40% of the job titles in HR are going to change in the next few years. They're not going to go away because these AI systems require maintenance and tuning and training and all sorts of things. Who we're going to talk about next week, but it's going to be a different job. Now take it up a level. Why does everybody think HR is such a burden? Why are all these articles written about HR ification? The CEO who blamed his HR department for his poor business performance the other day, all the articles, why we hate hr, that old article on and on.
[00:09:27] What is this all about? Including, by the way, the TV show the Office. Well, we have a bunch of baggage to bring with us. People that go into HR don't have a lot of training in business.
[00:09:39] In fact, there are very few HR training programs in college. You can get it in community college and some one or two business schools cover parts of it. Very small number, but most people get into HR by accident and they learn about it over time. And so if you really want to deliver on this mission of dynamic enablement for growth, well, you got a lot of things to learn because this is now systemic hr, this is now problem solving, this is consulting, this is understanding the relationships and the pieces between all of the disciplines of hr. It's like having a job titled like energy engineer. If you're an energy engineer and all you know how to do is to calculate the chemical process of hydro cracking, which is one process in a refinery, you're not an energy engineer, you're a hydrocracker engineer. And if the hydrocracker technology goes away, you got to find a new job. So in a sense, because HR is becoming so systemic and AI is becoming a better and better tool to make it systemic, you have to be systemic too, have to have more multidisciplinary skills, experiences, resources and tools. And there will still be specialist roles, of course, and there will be coes of some kind. We can't necessarily identify exactly how they'll work yet, but there won't be a lot of bureaucratic HR managers that create these narratives. And I'm going to do my best as one person to try to promote this new, bigger, different, more exciting role or mission for this function. Now, you can rename it, you can call it People Operations, which I don't like at all, because it's not really just operations. You can call it people and culture, you can call it whatever. But the reality of it is if you're not taking on this bigger role of dynamic enablement, it doesn't matter what you call it, people are going to think about you as the HR department. As I mentioned earlier, the second big part of this mission is the development of your capabilities.
[00:11:37] And what we're going to be launching next week is the Josh Burson Institute. And you'll see that for those of you who come to our conference and learn more about it following next week, we're putting a huge amount of resources into taking the intellectual property and experience and case studies and stories of technology information we have and putting it together in a new form of AI fueled certification so that you can become a global excellence leader in this new domain. I won't belabor that at the moment because you'll hear more about it later, but it's coming next week. But the big reason we're doing it is because the demand is so critical. Now, in this weird time we're living in, there's a lot of conversations from technology companies that AI is going to take over all the jobs. I was just listening to Satya Nadella yesterday talk about the fact that intelligence is the logarithm of compute. Now, if you don't know what that means, it's kind of a weird concept. But basically what he's saying is the more computation you have, the intelligence your company has, theoretically eliminating the need for people. And next week, Elon Musk is going to highlight the public offering of SpaceX, which is going to be well over a trillion dollars. And he's just finished a speech at the JP Morgan Investor Conference explaining that the reason SpaceX is going to be such a big company, and I think he's probably right, is that we're going to have so much demand for electricity and so much demand for compute that we're going to need data centers and power plants in the sky that can capture energy from the sun, because the sun is so big and has so much energy that it is millions of times more capacity than the fossil fuels and other sources we're using on earth. So whether you listen to these guys or not, there's a lot of conversation at the sea levels about if we can just buy more AI, more computers, cheaper and cheaper power, our companies will be smarter and smarter and smarter, we can generate trillions of lines of code and we don't need so many people. Now, I'm in complete disagreement with that for a whole bunch of reasons. And you'll read about that in the book that we're publishing this fall and I'll talk about a little bit next week, but that's going on. So the question you're going to be running into all over your company is people saying, well, wait a minute, we need to reduce headcount. You have too many people, too many bureaucratic jobs, too many administrators, too many policy people, too many bureaucrats, too many paper forms to fill out. And that is a good thing. In fact, the way I think about it as a 70 year old is this may be the only time in your entire career that you're going to have the opportunity to wipe out all the stuff you don't like. Anything that's driving you crazy, it looks stupid. That's left over from the 1970s or 80s that you're doing in your company. In this age of AI, you now have the license to lead a project if you decide to do this, to eliminate it. Because AI is and is being positioned as the tool to eliminate bureaucratic work. So what we're doing in many ways is reinforcing this idea that human capital is the most important appreciating asset we have. By using AI to re engineer or redesign, revolutionize the way we go to market, the way we build things, the way we serve customers and everything else. And that is going to be your job, is to help that happen. Now, interestingly enough, one more small point on this whole narrative, you might think to yourself?
[00:15:03] Well, I don't really know that much about AI. I'm not an engineer. I'm not a software engineer. I don't write code. I don't even know what code looks like. I don't know half the words you guys are using. You don't need to know that stuff. I'm going to show some data next week. It's going to blow your mind. Two things. First of all, we've had almost 20,000 HR people assess their skills or their global capability model. 95 capabilities assessed by 20, 25,000 HR people all over the world, each of which told us how fast their companies are growing. And what we discovered is that the companies that are the fastest growing companies have exceedingly high HR skills in change management, organizational design and leadership. Technical skills like data and AI score very low in their correlation to company growth within HR now so. And by the way, you can use that data to make a business case that the money you spend on our certifications or our academy are exceedingly good investments. And we'll show you the data on that on what the revenue potential growth for upskilling your HR department. It's very, very high. It may be one of the best opportunities you have other than sales training to apply L and D dollars. The second finding from a lot of this research I'm going to talk about next week is the skills needed in AI staff. So Lightcast has done research on the trending skills in jobs that are AI related jobs, in other words that have AI in the title or the job description. And what they found is that the highly trending growing skills are cross functional collaboration and stakeholder management. In other words, the technology part of AI, as interesting as it is, isn't really the problem we're trying to solve. It's really redesigning and reintegrating and re imagining how we do work. And that's stakeholder management, change management and understanding the business.
[00:17:01] So your agenda for the next few years isn't just to get demystified on all this AI stuff which will you with, but to think more broadly about the business you support, what it does, what it's trying to do and spend some time wiping the slate clean of the way you're doing it now and redesigning it for the future. And that is what dynamic enablement for growth is all about. So there you go. A small preview of what I'm going to be talking about next week. I am happy to debate this, discuss this. We will show you more on what this means relative to operating model, job title skills, roles, et cetera, in the coming months. And I hope you all have a good weekend. And for the 450 of you who are coming to LA, you're going to have a fantastic time. We have the most exciting this is our fifth annual Irresistible Conference. I'm really excited to come down and spend three days with everybody, so look forward to having a great time in la. See you guys next week.
