HR has a bit of a ‘love-hate’ relationship with the finance function, don’t we? On the one hand, most HR professionals groan at the thought of Finance going anywhere near the people agenda. Insufficient empathy. Overly focused on the tangible assets and the numbers, rather than the intangible value of people. Too interested in short term deliverables and not enough in building long term capability. Too black and white in their judgements. Every HR professional I’ve ever known has voiced these concerns, particularly if we’re unlucky enough to report into them!

On the other, we admire and are slightly envious of their status amongst the leadership team. FDs never seem to struggle with impact and gravitas at the Board. They are pretty good at saying ‘no’ in ways that doesn’t seem to annoy our colleagues as much as when we do it. They are typically great at presenting a coherent argument based on intelligent data and analysis.

‘It’s not you, it’s me’

It’s time to make our relationship with the Finance team a bit healthier and, as in real life, it’s about changing our attitude, not theirs. And the first thing we need to do is to stop trying to BE them.

For too long, we have tried to compensate for our lower status in the hierarchy by copying them. We have adopted their language, for example. We use terms like ‘human capital’ or ‘FTE’s’. We talk about employees being our greatest ‘assets’. We even have our own ‘asset registers’ of people data where we list things like, how many we have, what they’re costing us, and their productivity, in terms of absenteeism rates and churn. But ‘assets’ are things like buildings or computers. We, in HR deal with human beings – beautiful, wonderful, frustrating, mercurial human beings. All of whom are different to one another, who have different needs and wants and who are essentially, unpredictable. Talking about them as assets undermines the complexity and value of our people.

It also means we don’t give our leaders the insights into their people that might help them make better decisions. Churn rates are relatively meaningless in the way we present them. If we are going to copy anyone, we could adopt the approaches used by our Marketing colleagues. Adapting techniques like consumer persona for our employees for example or using a blend of qualitative and quantitative measures to tell a strong and compelling narrative about how our people feel and might be persuaded to change their mindsets and behaviours. We need our own language – one that isn’t filled with finance-like words but which reflect the very different – and human – nature of our work.

You either believe people matter or you don’t

One of the most frequent requests we get from HR professionals is access to data that will help them convince their leaders that it’s worth doing things differently. For example, data that proves offering flexibility will improve engagement. Or proof that getting rid of ratings will improve performance. Or to quantify the ROI on our training investments. Now, I’m not saying that we shouldn’t evaluate what we do. But as the polarisation in the current vaccine debate shows us – data rarely convinces people to change their behaviour. We often find that asking for ‘data as proof’ is usually a way for leaders to put off making a decision or to camouflage their fear of change.

People are not as easy to measure as revenue or profit growth. It is incredibly hard to provide proof on people issues. Instead of trying to compile data that’s bound to be ignored or refuted – we need to appeal to our leaders’ common sense, their own relationships and experiences and the feedback from their own people. Take individual annual bonuses as an example. There’s a ton of data and research that shows individual bonuses fail to either motivate or drive the collaborative behaviours we need today. None of this has made the slightest difference to leaders’ preference for them. If we use scenarios, stories, compelling evidence from our people themselves – we might start to have more of an impact.

As I get older … and probably more impatient with leaders who aren’t prepared to acknowledge that people leadership needs to change… I am increasingly of the view that you either ‘get’ the people stuff – or you don’t. If we spent more time hiring and promoting leaders who ‘get it’ and less time trying to find proof for the ones who don’t – maybe we’d stand more of a chance!

Rather than trying to be as credible as the finance team by copying their language and approach, HR can build our credibility by being deliberately different. We will have a stronger and more powerful voice if we own our role as the people experts. We can do so much better than being a second-rate finance partner. We should stand proud as HR – the experts on human beings.

As unpopular as it might be with leaders who often crave certainty, great HR is just ‘messy’. The HR leaders who are having the most impact, who are creating the conditions where people and organisations can thrive in our disrupted world are those who have the courage to avoid the neat solutions and instead offer light-touch, agile and less perfect solutions to the challenges we face.

Messy HR has a number of features that differentiates it from the traditional neater version;

So, what do these messy HR solutions look like in practice? I thought it would be useful to look at one of our most popular ‘neat’ HR processes – talent management and compare it to the newer messier alternative.

The neat approach to talent management The traditional neat approach is all about the annual completion of the 9 Box Grid as part of our annual talent review, seeing this as the complete picture of talent strength.

The leaders I have worked with who seemed to enjoy the Annual Talent Review were always those who got a kick from structure and process rather than the great people leaders. The latter were able to do the exercise fairly quickly, but it didn’t create any real value for them as they already had a clear picture in their mind about their people and some idea about how they were going to develop, manage or reward each of them. The leaders who enjoyed the process of neatly categorising were typically the ones who did little with the results and saw the activity as being completed the moment they placed the last name on the grid. We know that great talent management is all about movement – moving up, around, in, out and yet the 9 Box Grid often fails to generate that movement and becomes more about allocation. I can see that having a snap shot of your senior teams at a point in time might be useful as a wake-up call or a reassurance but not much more and, given the inaccuracy of that snap shot, why bother to do even that?

It’s not unusual for talent reviews in larger organisations to take several months to complete. Not only is this time consuming for questionable results, it just doesn’t mirror the true pace of most organisations. Every Talent Review I’ve ever produced was always out of date by the time it was complete and leaders who want to move quickly to recruit or promote are justified in their irritation at the time it takes to get a perfect picture.

So, we spend crazy amounts of time and effort producing a complicated (but neat!) grid that is inaccurate and doesn’t add value. Not a great use of time at best and at worst, yet another HR activity that fails to add value and damages our credibility. Finally, messier alternatives are emerging with much greater impact.

So what’s the ‘Messy’ Alternative to the Annual Talent Review? Firstly, it’s not annual! Instead we’re seeing much more fluid and dynamic talent processes and interventions that don’t have a rigid and irrelevant timetable. Approaches like Western Union’s approach where they get clusters of leaders together for an hour a month to ‘talk talent’. No documentation to fill in, no 9 box grids – just conversations about their teams. I’ve always found that most leaders like to talk about their people, they just don’t like doing the paperwork. Getting leaders to discuss talent on a regular basis helps them get better at it too.

Secondly, we’re seeing greater customisation to reflect the different needs of the talent themselves. At 3M, the HR team identified a number of different segments based on the employees’ main motivation for working at 3M. Three examples of these clusters include employees who are:

“In it for my life”—those motivated by alternative work arrangements, as in “I have a life.”

“In it to win it”—those motivated by a fast-paced, highly challenging, risk-taking environment.

“In it to experience it”—those motivated by developmental stretch assignments.

The clusters provide managers with the ability to tailor programs to various employee needs rather than a one-size-fits-all approach to career development.

Thirdly, talent management is much less about focusing on an elite few who have been anointed during the talent management process but instead about creating an environment where employees are encouraged to take responsibility for their own career development. Initiatives such as Nielsen’s ‘Ready to Rotate’ where employees are encouraged to flag when they believe they are ready to do something different is a great example of this change of ownership.

Finally, messier talent management is all about regular conversations between a line manager and their team, not the once a year career discussion at the annual appraisal. Numerous organisations are now embracing this less structured approach and encouraging leaders to have frequent check-ins which include discussions about career development instead.

Messy HR is often going to be harder sell to our Execs than the neater one. Providing proof of leadership capabilities or talent bench strength feels good because it offers the seductive illusion of certainty. Advocating approaches where there are no guarantees, where ‘it depends’, where it takes longer and where it’s harder to measure may meet with greater resistance but it’s honest and in the long run will deliver greater results. I believe the truly impactful HR teams are the ones who are brave enough to promote ‘messy’ in a world that craves ‘neatness’.

Of course, we work in complicated businesses with a myriad of issues – but the people strategy shouldn’t be a remedy for insomnia. We can produce short, punchy documents that get people energised by our plans and which, more importantly, focus on a few key ambitions that actually matter. In this video (just one of the regular 5 Minute Monday series for members of the Disruptive HR Club) we look at what a People Strategy could look like.

Lucy talks to Chief People Officer at DAZN, Shaun Conning about non-traditional routes into and approaches to HR

Lucy interviews Tanith Dodge, one of the most foremost HR Directors in the UK about what it takes to get to the top of the HR profession.

Nebel has done some really exciting things during her time at fashion retailer River Island. In this interview Nebel shares how she uses ‘agile hr’ as well as some great innovations in performance management and employee engagement.

In this podcast Karen talks to Karl Burnett, VP of HR at A+E Networks about some of the great HR initiatives that helped A+E win the award for ‘Best place to work in TV’ in 2018.

A+E Networks UK is a joint venture between Hearst and Sky and a leading media network reaching 60 million homes across 100 countries. Known for award-winning factual and entertainment content they have been entertaining and inspiring audiences for over 20 years and currently partner with over 360 operators broadcasting throughout the Nordics, Benelux, Central Europe, the Middle East and Africa.

Karl joined A+E Networks UK as VP, Human Resources in July 2015. Based in London, Burnett manages Human Resources and Recruitment across all of A+E Networks UK’s territories, including offices in Poland, Denmark, Benelux and South Africa. The business currently employs over 200 people. Burnett joined A+E Networks UK from the BBC, where he held senior HR positions since 2010. Karl served as HR Director for BBC News and Radio, leading an international team of 50 HR professionals. He previously held roles at Nickelodeon UK and Channel 4 Television.

At Disruptive HR we are constantly looking for an opportunity to share stories of companies from around the world who are approaching HR in a different way. We recently had the pleasure of speaking with Mario Kaphan, the Founder of Vagas, which is a leading e-recruitment company based in Brazil.

Mario briefly shared with us the journey Vagas has been on to become the dynamic company that it is today. They are constantly re-inventing themselves to find the perfect balance that works for them. Here’s more from our discussion:

Vagas looks like it has found the secret of managing through self-managing teams. You currently have around 150 employees organised in 30 self-managing teams serving more than 3,000 customers and you have had a similar model since you started the company back in 1999. It’s interesting to see how you’ve managed to maintain the entrepreneurial spirit in spite of the growth over the years. How did you manage to do this?

It has everything to do with our horizontal management model. People are free to do what they want but the synthesis of our model is that everyone has everything to do with it. This is the fundamental basis of our model. It means all decisions are consensually made with our 150 employees.

You’ve said ‘Although there are no formal leaders, VAGAS is not a leaderless company’. The hierarchies or decision making seems to be dynamic at Vagas. Would you say that authority shifts based on who has the most knowledge and experience in a specific context?

Yes, but there is absolutely no delegation of power. No one wears the badge of a leader. Leadership is dynamic and it changes every day. The different teams decide who they want to involve in any decisions making process that they are undertaking based on knowledge or experience required. We are always learning – we hack the company permanently.

Since you mentioned ‘Learning’ as a continuous process at Vagas, we know you always look to hire individuals who have something to teach. How does that work in practise for Vagas?

The whole hiring process can take a long time. Candidates are interviewed by several people. Competencies are only one of the aspects that are considered. The cultural fit is equally important. Sometimes that means that what people have to teach us may not be directly related to their technical skills. It may have something to do with their other interests.

We also place a lot of emphasis to discuss the future of work and we look to hire people who have an opinion or a view of what this future will look like for us and how they could help us get there. It is very important for us that someone who wants to join our company has the clarity of ‘what’ and the ‘why’ of our company’s horizontal model. It can sometimes be difficult to function within a horizontal model and for some people it is all they want and for others it is practically impossible to function in this environment. We try hard not to hire the wrong person for which we assess clearly during recruitment.

There is absolutely no delegation of power. No one wears the badge of a leader. Leadership is dynamic and it changes every day.

Teams in Vagas are responsible for hiring, developing and firing. What role does HR have to play at Vagas?

HR has an active role to play. The first phase of the hiring process is quite conventional except for the fact that the respective team which has a vacancy works together with HR during the process. But the whole process of opening a position, attracting people and the first rounds of interviews are all managed by HR.

A healthy amount of controversy seems to be normal and expected in an organisation with zero hierarchy. How do the employees deal with this and how does this affect the relationships at work?

“Controversy” is only the name we have given the main methodology for our horizontal decision making process. For every decision, no matter how big or small, it begins from this point of ‘controversy’ and is lead to consensus.

The process starts by defining a “minimum and appropriate” group (of one or more persons) for the controversy that builds the consensus and publishes it on our intranet, so that anyone who disagrees may bring it back to the controversy phase. This simple process can be more efficient than the vertical process: it may be better because the group is not tied to hierarchy, faster because it does not have to rise to the necessary hierarchical level, and decisions still come with broad engagement.

It sounds like sometimes it may be difficult conversations to be had. How do you prepare or train your employees to have these difficult conversations?

Perhaps it’s more difficult in Brazil than in UK for instance because Brazilians don’t like to confront others. Even so it’s not so complicated. We conduct workshops to help people to learn how to have the pleasure of having these types of conversations. The word ‘Controversy’ really is just the name we gave the process, it really is the process of how we decide. It is important to say that we are absolutely ‘imperfect’, sometimes decisions take a very long time, sometimes they will consume too much energy and people will not be happy. But in a majority of cases we don’t struggle with these problems.

It has more to do with understanding what is being done and being in an environment which is safe. People know that expressing their opinion does not bring any threat to them. When you visit Vagas, you will see that the spirit here is very high because it is made up of a group of people who value freedom and are fully engaged in building a purpose which is meaningful to them. It may sound like a utopia from what I’ve said but this is what objectively happens. We are closer to it than many other companies.

We believe it is not our duty to motivate our employees. We think that is a very paternalistic approach. They should be engaged and self-motivated by our purpose.

Having an engaged workforce is what everyone strives to achieve. How do you encourage your employees to perform when you don’t have pre-determined targets?

Our focus is not to maximise profit or to grow. Our focus is our purpose. Profit and growth comes as a consequence. It all has to do with our values that are alive and are lived and shared by this community of 150 people. Our values are not a list hung on the walls. It’s what gives shape to our decision making. We are horizontal because it is the best environment to live values. So the values are alive for each person making decisions. In a vertically managed company most important decisions are made at the top and that is where the values are lived not with the majority of their employees.

We have found that the main reason for our success is because the market recognises the authentic living values of Vagas. That’s what helped us grow until now. It is so pragmatic – we are horizontal because it is the best environment to live shared values and this is a strong success factor, where success for us is realising our purpose.

In a world where everyone is keen on climbing the corporate ladder, what do you think motivates your employees to stay in a role without any future of linear progression? Do you have a reward and recognition mechanism and how does this work?

We believe it is not our duty to motivate our employees. We think that is a very paternalistic approach. They should be engaged and self-motivated by our purpose. Compensation is not a form of motivation. It is only compensation for their time and effort. We believe that employees need to feel that salaries are internally fair and at least aligned to the market. Today, if someone thinks their salary is not right they will open a controversy which will lead to consensus. Their motivation should come from the fact that they are helping build something relevant with a bunch of likeminded people.

It’s the same for development and professional growth. We don’t determine anything for our employees because we believe it is an individual’s decision about how they want to grow. It isn’t always as simple as that but we are on a journey of constantly learning to improve and better ourselves.