Jim Lefever outlines why the shift away from Industrial Age thinking cannot be ignored – and why the new ‘Social Era’ means HR must tap
By any measure, on a global, regional and local basis,the world of business is in a state of flux. We are rapidly moving away from the Industrial Age with its rigid structures, stable business models, formal processes and functionally siloed organisations into a fluid and flexible environment that fundamentally changes the way value is created, the meaning of work, and the structures of our institutions.
This has huge implications not only for how HR fulfils its purpose but indeed whether HR will survive as a function without undergoing an appropriate transformation to meet these new realities.
THE SOCIAL ERA
Nilofer Merchant first coined the term ‘Social Era’ in her book 11 Rules to Create Value in the Social Eraas a way to capture the key shifts in how the world is changing. In her own words, the term ‘Social Media’ was limited by its connection with marketing and communications. ‘Enterprise 2.0’ was too technological. And ‘Social Business’ simply added an overlay to the existing framework rather than challenging the premise of an organisation. Instead, ‘Social Era’ captures two distinct power shifts:
1. ORGANISATIONAL. Connected individuals can now do what once only large centralised organisations could. This fundamentally alters the structural core and role of ‘the firm’, and of working people. As more and more freelancers and ‘solopreneurs’ enter the market, work is increasingly freed from jobs. The shift is from ‘value chain’ to ‘value flows’.
2. INDIVIDUAL. Anyone can be a game changer by using the power of their ideas. They need not first be vetted or chosen to be powerful. These previously unheard voices are essential for solving new problems, as well as for finding new solutions to old problems. Without celebrating what anyone — quite possibly everyone — can offer, people are simply cogs in a machine: dispensable and undervalued. By celebrating each person and the value only they can create, economic power is unlocked. And it’s not that everyone will, but that anyone can.
Welcome to the Social Revolution, where everything is changing, where there are seismic shifts in how and, more importantly why, people work, and where businesses with both a clear social purpose and a community aligned to that purpose are outperforming those without one.
WHY YOU DO THAT VOODOO THAT YOU DO SO WELL
It all begins with Purpose – that simple reason for being that can inspire employees, excite customers, and create vibrant communities. With it, everyone understands what they need to do and why they need to do it. Without it, we are unlikely to experience consistently innovative thinking, high employee engagement, true market differentiation or great customer loyalty.
Deloitte’s chairman of the board, Punit Renjen, recently wrote that “corporate culture is increasingly becoming a critical anchor that underscores the importance of maintaining core beliefs and values … [yet] the majority of employees and executives believe businesses are not doing enough to create a sense of purpose and deliver meaningful impact”
Think about it. Which is the more inspiring: a multinational company that says we are “a diversified technology company serving customers and communities with innovative products and services. Each of our six businesses has earned leading global market positions”; or one, equally large, that says our “people worldwide are dedicated to turning imaginative ideas into leading products and services that help solve some of the world’s toughest problems”? Or how about the one you will probably be most familiar with: to “organise the world’s information and make it universally accessible and useful”?
The most successful businesses will have a Social Purpose that ties into something bigger than them, that is focused on creating something for the good of the entire community that surrounds them, not just increasing the earnings per share for shareholders. How much better is that than having a mission statement that gets stuck above the photocopier and forgotten until the Annual Report is published or gets dragged out again for the performance management cycle?
IT’S NOT WHAT YOU KNOW, OR EVEN WHO YOU KNOW, IT’S WHO THEY KNOW
If industrialisation, as Karl Marx put it, “rescued a considerable part of the population from the idiocy of rural life”, then the Social Era has connected the intelligence of the individual with the power of community. Connected individuals can now do what once only large centralised organisations could do, which changes organisational structures and individual power. Key to business success in the Social Era will be the ability to proactively create deep social capital through the development of, and interaction with, a strong and diverse Community of Interest that leverages both the strong and weak ties of its members’ networks for the success of the community as a whole.
While we could equally call them Communities of Purpose, I define a Community of Interest Network (COIN) as the product of shared interests that may either converge within a shared geographical region or be independent of spatial boundaries, and where individuals are linked through a social network by one or more activities or factors covering a range of business, environmental and cultural elements; and where all members and actions are aligned with a common purpose and shared identity.
We shouldn’t misinterpret community as a nostalgic metaphor for some rural idyll where everybody knows your name. It should instead be welcomed as a concept that embraces diversity, creativity, engagement, conflict and dynamism. And for that concept to be realised, information must flow through the networks that connect individuals both inside and outside those communities. According to David Putnam, a strong community contains high levels of coordination and cooperation for reciprocal and mutual benefit. So by adopting a formal focus on community and the networks and ties between members of that community, businesses and HR in the Social Era can take advantage of both the ‘hidden wealth’, namely the non-financial resources comprising local skills, trust and know-how, useful contacts and care-based exchange, as well as leveraging the positive effects of ‘social contagion’, the spreading of behaviours and values, to create success.
OF COINS AND COPS AND CONES
A COIN is the broadest form of community and, at a macro level, encompasses the whole eco-system that facilitates the art of business in the Social Era. That system is made up of Communities of Practice (COPs), Communities of Action (COANs), and Individual Personal Networks, covering a wide-ranging, far-reaching and often global population of current employees, employee alumni, customers, customer alumni, suppliers and their value chains, vendors and their sales chains, as well as, at every level, each individual’s personal network of family and friends.
Etienne Wenger defined COPs as groups of people who share a concern or a passion for something they do, and learn how to do it better as they interact regularly. A COP has an identity defined by a shared domain of interest where members engage in joint activities, help each other, share information, and, critically, where members of the community are practitioners developing a shared repertoire of resources, experiences, stories, tools and solutions. Project management and change management
are quite clearly COPs, while HR is itself a COIN with multiple COPs inside, such as generalist business partner, Compensation & Benefits, Learning & Development, IR, M&A, Recruitment, etc.
A COAN (pronounced ‘Cone’) is a group of individuals from multiple COPs who are brought together, or voluntarily come together, to effect change under a common purpose, independent of geographical or organisational boundaries and defined by outcomes, time, budget and other constraints. A project team is a COAN, but so too are design, product or HR teams. For example, an organisational change will be managed by an HR COAN consisting of individuals from different COPs, eg HR business partners, OD, IR, Compensation & Benefits, Recruitment, Payroll, business leaders and other stakeholders.
In any Social Era business, there will be multiple COANs, forming and reforming, linking different COPs and COINs, targeting self-determined projects of work defined by their alignment to, and understanding of, the Social Purpose of the business.
As more and more individuals see the benefits of leveraging the power of their communities and the portability of their skills, knowledge and experience, we will see a rise in the number of Portfolio Workers, using their individual networks to work across a variety of communities at the same time, employing their skills, knowledge and experience in the way that interests them most. Just as a screwdriver (physical capital) or a university education (human capital) can increase productivity (both individual and collective), so does the quality of social contacts (social capital) affect the productivity of individuals and groups. So it is not the fact of creating COINs, COPs, COANs or even individual networks that matters but how they are all enabled to interact and generate social capital for the business. The solution, as Aristotle said, is that the whole is greater than the sum of its parts.
HR: DODO OR PHOENIX?
So where does all this leave HR?
For HR to be successful in the Social Era and meet these challenges, it needs to unite behind a purpose, that core reason for being with which all actions can be aligned. While there are numerous examples along the lines of “to maximise the contribution of people (in) delivery of the organisation’s goals”,they don’t really inspire or excite the reader. I therefore propose that HR’s Purpose in the Social Era is to build a better world through creating, linking and managing relationships and engagement across all communities in a business.
If we accept that purpose, then the responsibilities of the HR community must align with it and evolve to include the following:
The Community Curator
acting as a ‘superconnector’ to bring together disparate networks to enhance the flow of information, both internal and external, to benefit the core business while leveraging the bonding, bridging and linking capital existing within those networks to manage the flow of people in the communities; from resources in through attraction and recruitment
, to COANs and COPs delivering solutions to develop and enhance efficiency and effectiveness, and, finally, resources out through separation and alumni management.
The Co-creator influencing the development of the corporate strategy through their knowledge of, exposure to, and experience with the commercial operations of the business, then developing HR solutions aligned with the agreed strategy and purpose to develop and transform the people, process, tools and technology to achieve success.
The Expert Guide providing a flexible framework of policies and procedures related to employment and engagement of all types of staff, and implementing the tools to do this effectively, providing guidance, support and advice as required. The framework must be crafted in such a way that it allows for global consistency and alignment with the Social Purpose, but for local autonomy in application by multiple and diverse community groups.
The Communicator connecting people by creating and maintaining relationships of trust and value through open, honest, transparent and timely communication focused at targeting the creation of bonding, bridging and linking social capital.
The Guardian of the Social Purpose using community visioning to articulate ‘why we do what we do’ and embodying the concept through the development and implementation of the employee value proposition.
The skills currently valued and promoted by HR practitioners will also undergo a change in emphasis, with additional skills coming to the fore to support these new responsibilities in the Social Era. They will include:
1 Community curation– The ability to design and implement a community management strategy that enhances connectivity, reflexivity and redundancy across the networks.
2 Network weaving– The intentional practice of helping people to build and connect to more relationships of trust and value, by virtue of being genuinely interested in building and connecting oneself to more relationships of trust and value.
3 Solution design and integration– The ability to design and integrate holistic HR solutions based on input from all communities as well as through insight fed by ‘big data’ analysis.
4 Transformation management
– The ability to effect transformation through a synthesis of project management, change management
, business consulting and data analysis skills.
5 Strategic thinking– The ability to perceive
issues at micro and meso levels and create
solutions at the macro level to address.
6 Business acumen– The ability to define and deal with a business situation by employing a thorough understanding of what drives profitability and cash flow, a market-focused approach to the business, and an overall big-picture understanding of the business and its interrelationships.
7 Data analysis/Interpretation– The ability to use disparate data sets to generate insights about the business and provide data-based inputs for refining HR and corporate strategies.
Treating itself as a Community of Interest with an agreed Social Purpose, and evolved responsibilities and skills, HR will eventually find that it no longer needs to sustain a large and permanent organisational structure. Using a fluid community model, it will maintain a small core team with two main groups: generalist business partners for strategic co-creation with business leaders and management of HR COANs, and individual subject matter experts acting as relationship managers with the various HR COPs.
Surrounding the core, interacting and engaging with each other, will be outsourced HR COPs and COANs, populated by Portfolio Workers providing subject matter expertise, forming and dissolving as required.
HR can finally become the business enabler it has aspired to be for so long.
However, if we don’t adapt to the new realities of the Social Era, we may see the extinction of HR as we know it, perhaps through the merging of corporate strategy, marketing communications and HR generalists into one function that will have the necessary capabilities to deliver the required services by leveraging current skill sets and supported by outsourced HR COPs.
In the Social Era, the power of community coupled with the intelligence of the individual fundamentally changes the way value is created, the meaning of work, and the structures of our institutions. It is an exciting time to be in business, and HR has a great opportunity to be the agent of change to a new way of working across all industries, but to do that we need to seize the moment and choose to transform.
We can be the Phoenix or we can be the Dodo. We can’t be both. Which will you be?
Jim Lefever is the managing director of HR consultancy HR2BE. Visit hr2be.cominto the power of community