QUESTION 1 [40 MARKS] Case Study Why its hard to make change happen in HR We in HR can only make a lasting difference if were willing to take a fresh look at how we work too Im a recovering HR director. Ive spent 20 years in the field and have been HR director at three sizeable organisations: large-scale service provider Serco, global law firm Eversheds, and finally the BBC. For the past four years, however, Ive been engaged in something rather different. Having become increasingly frustrated with my profession towards the end of my time at the BBC I realised it was time for a change of my own, which led to the creation of my consultancy, Disruptive HR. Together with my business partner, Karen Moran, I now work with HR professionals all over the world who both recognise the need to change the way HR operates and want help with doing it. Ive met thousands of HR folk through my workshops and consultancy programmes, and while theyre a diverse bunch they all have one thing in common: an overwhelming desire to do HR differently. They understand that the macro business environment is experiencing tumultuous change and that they therefore need to wise up to a different way of working; in some cases their leaders are pushing for this too. But to their frustration, their attempts at making this transition a reality are largely unsuccessful. Ive certainly had my fair share of failures when Ive tried to improve the way HR goes about things. When I was at Serco each division was focused on its own sector: defence, rail, prisons, and so on. I could see there was growth potential in helping teams work together rather than separately in siloes, and I wanted to encourage this. My first move was to remove the financial incentive for managers to focus only on their own areas, by instigating a new bonus scheme which combined a reward for individual achievement with the needs of the wider company. This would be the ideal solution (or so I thought). Unfortunately, the result was a hugely complicated bonus structure in which leaders were financially incentivised according to group, divisional, and personal performance. Page 3 of 6 Not only was it ungainly but it also had no business impact whatsoever because no-one could understand it, and by the time the bonus amounts were split into the different areas they became irrelevant. All I achieved was a waste of time and effort, and the resentment of leaders and managers who couldnt understand why I was tinkering with something they thought worked perfectly well already. Zero points to me for that one. I had another disappointing experience with implementing change when I tried to simplify the pay and grading structure at the BBC. My aim was to reduce and harmonise the 5,000 job titles across the organisation to make it easier for people to contemplate shifting from one division to another. This would result in a more dynamic BBC, with a flatter hierarchy. Together with my team I devised what I thought was a beautiful and transformative plan. We slaved for nine months crafting a revised grading structure that was reduced from 17 levels to six, cutting the number of job titles (eliminating senior and executive, for instance), and slotting them into neat, new pay bands. We could have saved ourselves the trouble it bombed. Why? Because Id completely overlooked two vital elements that were important to people. The first was that employees liked their tribal language, and didnt want to relinquish it for what they saw as HR expediency. The second was that in an era of cost cutting and low pay increases, the puffing-up of a job title with the addition of senior served as a reward in its own right. Id also missed the whole point of the exercise: the reason people didnt readily move across divisions was little to do with a lack of understanding about job roles, and more to do with the fact that it wasnt culturally acceptable to jump ship from, say, television to radio. It was seen as disloyal. And our response to that? To snatch away peoples hard-won job status, and in the process alienate them from HR even further. This was brought home to me when I presented my simplified structure to a wall of ill-disguised apathy at the World Service senior team: Im not sure this does anything except achieve HR neatness, I was told. They were right. Youll be gathering by now that to make change more successful in HR, we need to radically redesign how to make change happen. Be warned though, we in HR can only make a lasting difference if were willing to take a fresh look at how we work too. HR can borrow and steal from other disciplines for our own purposes. Lets consider marketing first. Marketing know-how is useful for HR, because people in that discipline understand, often far better than we do, how to influence human attitudes and behaviour. However, weve not traditionally seen this area as our natural ally in business. Instead thats been finance, from which weve traditionally taken our lead in terms of insight and data analysis, operational compliance and efficiency. This has led us to view people as assets rather than as living, breathing individuals. Product design is another area we can learn from. In HR we tend to see ourselves as providing a service, priding ourselves on creating consistent, cost-effective, scalable, and easy-to-monitor processes that can be applied across the whole organisation. Page 4 of 6 This sounds good, but it isnt. To put it another way, we create and tinker with processes that support our service rather than asking ourselves if the process is actually needed in the first place. In contrast, product designers base everything on their end users and this has produced an increasingly agile discipline which isnt hindered by the same rigid procedures as we have in HR. If you think about it, can you honestly say theres much at all about HR that has changed in recent years? We also have a huge amount to learn from psychologists and behavioural economists. It amazes me how shy we are about calling ourselves the human experts, and again this comes down to our age-old desire to emulate finance. In a world in which CEOs and shareholders are looking for certainty, weve tried to boost our status by proving our financial benefit to our organisations. This means instead of becoming experts in the messy, intangible world of human behaviour, weve become specialists in process design and project implementation. I can certainly understand why, because it comes from a desire to help people work more effectively, but its not the way to create effective change. If theres one thing Ive learned in my journey through disrupting HR in various organisations, its that it doesnt have to be as big and scary as you think. In fact its better if its not, because when you as an HR professional feel confident about change, everyone else will too. It really is down to you to lead the way. Lucy Adams Lucy Adams is the founder of Disruptive HR having previously held senior HR roles at the BBC, Eversheds and Serco. Source: Personnel Today magazine 6 February, 2019 QUESTION 1 (a) In the case study it is mentioned that there is an overwhelming desire to do HR differently. In your opinion, what are those aspects of HRM which need to be done differently from the traditional way of managing people? Explain your answer. (15 marks) (b) Two examples of failed changes have been cited in the case study, namely: (i) the incentivisation of managers (ii) the simplification of the pay and grading structure at the BBC Why, according to you, the changes failed and what lessons HR managers can learn from these two events? Support your answer with evidence from the case study. (25 marks)