Organization Development

Organization Development and Human Resources Management Knowing Our Place for the First Time?

“We like to say it is synergy that makes business teams so effective—the whole being greater than the sum of its parts. But for the whole to be greater than the sum of its parts, new relationships must be forged among those parts. If all the parts do is co­exist side by side, there is no synergy.”

By Dave Hanna Four decades ago, Herb Stokes, a pioneer- ing change agent and my first mentor at Procter & Gamble, told me, “The organi- zational forces for stability are always in conflict with the organizational forces for change. [Human Resources] represents the forces for stability. Organization Develop- ment represents the forces for change. That is why [HR] and OD never should be housed in the same department.”

Most of us OD practitioners in those days indeed were housed in Personnel or Industrial Relations (both known today as HR). And while we all enjoyed associat- ing with our HR colleagues, we did have frequent disagreements with them on what to change in the organization and how to go about making those changes. If OD consultants recommended a more innovative pay system based on contribu- tion vs. seniority or job title, HR managers would present a long list of reasons why such a change was very risky and uncer- tain in the benefits it would deliver. When HR would present the revised plant safety policy, OD would cry “bureaucracy” and point out how the policy failed to mesh with the empowerment initiative that was underway.

Pick the right issue in the right orga- nization at the right time and you could find HR and OD being each other’s chief antagonist. Many years have passed since those days, but some of the enmity still persists between the two groups.

The last thing either of these players needed was someone else complicating their attempts to improve things. The HR function traditionally has fought to gain

respect as a legitimate partner at the busi- ness table. Conventional wisdom said HR was supposed to take care of the people business so managers could take care of the “real” business. Accordingly, HR has been valued by its business partners as long as it could prevent people problems from landing on the calendar or inbox of the responsible manager. HR’s role evolved primarily to one of conducting wage and job classification surveys, handling employee relations and union nego- tiations, hiring people, finding the best values in plans and benefits, managing safety and hygiene, communicating with employees, and protecting the corporate image in the community. When the era of downsizing began in the 1980s, HR was at the top of the list of those targeted to add value to the bottom line by reducing their headcount.

This traditional HR role is what Herb Stokes was talking about when he described the forces for stability. Take care of the employee systems and services; keep things stable so managers can keep their attention on the changing business needs. And find ways to do all of the above with fewer and fewer people.

The only trouble with this thinking is that the people variables always have been connected with the business variables. In recent years this connection has become more obvious to everyone. Global mar- kets, rapidly changing technologies, and economic turmoil have led to products of shorter shelf life, unprecedented move- ment of people from home to foreign cultures, and traumatic measures like

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downsizing and outsourcing. All of these strike a dagger at the stability of people systems and practices. More and more of today’s managers realize they have to handle people issues with the same level of priority as marketing, financial, or tech- nical issues. There is a seat at the busi- ness table for HR professionals who can measure up to the partners’ demanding expectations.

OD has had its own interesting journey in the past 40 years. Internal and external consultants multiplied greatly in the 1960s, 1970s, and early 1980s. The OD consultants were considered by many clients to be a bit strange in their approach, but they went along in the hope that improvements would be seen at the bottom line. Eventually the curiosity and patience subsided and by the late 1970s Japanese companies were winning more and more of the world’s consumers with products of top quality and low cost. Many OD positions went away in the 1980s, but their contributions were still needed and emerged in the new Quality departments that were springing up everywhere. As the Quality tide has ebbed, the remaining internal change agents have been absorbed back into HR departments.

So today we find HR and OD back in the same homeroom, both seeking more respect and both fewer in numbers than before. I myself have experienced both sides of the homeroom. Most of my career has been on the OD side, but a number of my corporate roles, projects, and cli- ent engagements have been focused on employee relations, safety and hygiene, compensation systems, talent manage- ment, personnel research, performance management, and HR organization effectiveness. Based on my personal experi- ences and, with all due respect to Herb Stokes’ valid observation about the conflicts between stability and change, I believe the coming together of OD and HR is long overdue.

I say coming together because OD and HR should not be content merely to be siblings living under the same roof. We need to leverage our different strengths for the greater good. In the words of noted historians Will and Ariel Durant,

So the conservative who resists change is as valuable as the radical who proposes it—perhaps as much more valuable as roots are more vital than grafts. It is good that new ideas should be heard, for the sake of the few that can be used; but it is also good that new ideas should be compelled to go through the mill of objection, opposition, and contumely; this is the trial heat which innovations must survive before being allowed to enter the human race. (Durant & Durant, 1968, p. 36)

In other words, regardless of who is pro- posing what, an examination by contrary views is healthy. Diversity of thought and experience can indeed lead to the critical screening the historians say is so important for constructive, innovative breakthroughs.

The Durants’ statement explains why a multifunctional business team adds value through its 360° analysis before prioritiz- ing and implementing corporate strategies. We like to say it is synergy that makes business teams so effective—the whole being greater than the sum of its parts. But for the whole to be greater than the sum of its parts, new relationships must be forged among those parts. If all the parts do is co-exist side by side, there is no synergy. Like a business team, our different human systems disciplines, including HR and OD, could add greater value to the business through our interactions before bringing forward new organizational innovations and business solutions.

The 2007 HR Competency Study, co-sponsored by the RBL Group and

the University of Michigan Ross School of Business, yielded some provocative insights into the need for synergy in HR (Ulrich, et al., 2008). This study sampled more than 10,000 HR professionals and their business clients in all regions of the world and identified six competencies as being essential for an HR professional who adds value to the business: » The Credible Activist: being credible

(respected, listened to) and active (offer- ing a point of view and challenging others’ assumptions)

» The Operational Executor: flawlessly

executing the operational aspects of managing people and organizations

» The Business Ally: contributing to the success of the business by understand- ing its social context, how it makes money, and how to organize its parts to make more money

» The Talent Manager/Organization Designer: mastering theory, research, and practice in both talent management and organization design

» The Strategy Architect: having a vision of how the organization can succeed in the marketplace and actively shaping the strategy to fulfill this vision

» The Culture and Change Steward: recognizing, articulating, and shaping corporate culture and facilitating the change processes required to keep the culture aligned with the business needs

The results of this study show us how much the world has changed in the last four decades. Business leaders are actu- ally aware of the need for HR to shed its

Eventually the curiosity and patience subsided and by the late 1970s Japanese companies were winning more and more of the world’s consumers with products of top quality and low cost. Many OD positions went away in the 1980s, but their contributions were still needed and emerged in the new Quality departments that were springing up everywhere. As the Quality tide has ebbed, the remaining internal change agents have been absorbed back into HR departments.

13Organization Development and Human Resources Management: Knowing Our Place for the First Time?

traditional role. They want HR profes- sionals to step up to a more value-adding contribution. They are looking to HR for help in crafting strategy, determining priorities in running the business, design- ing and structuring how work gets done, shaping culture, and, yes, managing people systems to give a sense of stability. More- over, the business leaders know they need HR professionals who are credible activists who will push, prod, and even lead some discussions that chart the course for the future.

Looking over the list of the six HR competencies, I am unable to choose which ones are essential only for OD and which are relevant only for HR. Our business partners in this survey said these are the competencies they expect us HR profes- sionals to deliver if we are to add value to the issues that most concern them. If HR professionals were to become proficient in the six competencies, regardless of what their current assignment might be, where would you find “OD types” and “HR types” in the future? There would not be a mean- ingful distinction between the two.

So, let’s face up to this scenario and its implications for us collectively and individ- ually. First of all, regardless of our heritage, we, in both HR and OD, are all profession- als today in the function known by our business partners as Human Resources Management. But this is today’s HR, not the HR of yesteryear. Not the HR with OD and HR silos. Not the HR that managed the forces for stability and opposed the forces for change. It is no longer a mat- ter of stability or change; every organiza- tion requires some of both. Today’s HR needs professionals who can find the right balance between stability and change. So I am proposing that the function be called HR or HRM with centers of expertise in talent management, HR operations, OD, change management, compensation and benefits, etc.

Let us be clear that it is the global market place and economic fluctuations that are shaping today’s HR. The mar- ketplace requires organizations as never before to design, assess, and redesign their strategies and systems to improve the bottom line. Adding value in this

complex situation represents more work than any army of HR specialists could handle (and remember the “army” is more like a “squadron” when compared to past staffing). The mere sum of our individual HR contributions won’t do. A squadron of professionals, each skilled in the six HR competencies, can deploy its resources against critical business needs in a wide variety of combinations. A few true HR professionals can do the same work that many isolated specialists were required to do previously.

Come to think of it, this is precisely the same approach OD consultants have been advocating to their clients for years— tear down the silo walls, develop multi- skilled flexibility and team up as required to meet the challenges of change. Now we need to apply this same process to our- selves and to our own profession.

How can we succeed at changing ourselves after all these years? There has been much discussion about why change is needed. After all is said and done, a lot more has been said than done. This is a change process as complex as any I have been involved with.

I believe each of us has to look at the big picture outside ourselves to appreciate the context for what we do in HR. I call this looking from the “outside in” and it will change the way we think about our work. Then each of us has to get centered personally and become committed to the ways we can add the most value to the big picture. This will lead us to initiate actions and work differently within our sphere of influence for the good of the business. This internal centering and commitment pro- cess I call working from the “inside out.”

Looking outside in means we first have to expand our perspective. Some ways to do this:

1. Think of the business need first. We need to deeply understand the global marketplace and the business realities facing our own organization and set our priorities accordingly. This is not some nice-to-know theoretical con- struct. In many companies in different parts of the world, HR professionals, when asked to identify a business

challenge they need to work on, invari- ably describe something that is valuable from an HR point of view. They identify the challenge as meeting the recruiting goals rather than building leadership capacity for global growth. They want to build a stronger culture rather than improve flexibility and productivity to respond to changing business require- ments. Are these just differences in semantics? I think not. The words we use reveal what matters most to us. If meeting the recruiting goals is on my To Do List, then I check the box and congratulate myself if we get enough people in the door. I consider that item done even if we don’t yet have the lead- ership capacity for global growth. I have met my HR target, but may not have helped the business. Rethinking our priorities is the beginning of becoming a business ally.

2. Participate in your company’s HR rotation program or work with your leaders to organize a rotation plan for yourself. Many companies have a rota- tion program for new HR associates. The rotation enables associates to get experience in several HR functions over a period of a few years. This may seem “beneath” you if you are a veteran in HR, but don’t dismiss the concept out of hand. See if there are ways you could participate in the rotation program to build up your competencies. Or find some alternatives for short-term assign- ments or special projects that require you to get immersed in those areas of HR in which you have little or no expe- rience. Learn and appreciate how these functions add value to the business. Consider how your skills and experi- ence might synergize with these other functions.

3. Show how much you value diversity by seeking out and digesting different points of view and critiques of your own work. Remember the Durants’ statement about the need for radicalism and conservatism on any major issue— how the grafted branches and roots are interdependent. If we HR professionals

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are truly committed to fulfilling real business needs, as opposed to merely getting approval for our individual proposals, then we ought to welcome discussions that examine any potential flaws in our plans. Approach colleagues and other associates (especially those who tend to approach things very dif- ferently than yourself ) and use them as a sounding board and think tank for important initiatives you are working on. Enjoy the discussions that follow! Debate with our colleagues is not bad, different approaches are not distrac- tions and none of us starts out with THE solution.

Having looked (and worked) from the outside in, you will see yourself, your col- leagues and your work in a different light. Now internalize this outside-in perspective into personal insights and commitments that can add much more value to the busi- ness. Work from the inside out to translate personal commitments into new ways of working together that will yield much syn- ergy. Some suggestions on how to do this:

4. Team up with those whose expertise is needed to fill the business needs. We all need improvement in some of the HR competencies. An informal, but effective way to build these competen- cies is to partner with someone else and learn from each other’s strengths through your teamwork. Pick one of the business needs you uncovered in #1 above and identify one or more col- leagues to partner with who are skilled in important areas that are your current weak spots.

For example, Marissa was the epitome of the outsider’s assessment of HR: “I love my HR person, but I hate HR.” Marissa was a “can do” person, who immediately volunteered to solve transactional problems involving any HR system, policy, or practice. Health insurance problem? Marissa would contact the provider and get it cleared up. Need to replace a director who just left the company? Marissa would work with the talent management system to get the replacement. The

bigger business problem, however, was Marissa’s research division and the company’s sales and marketing division were always at war. This schism slowed down the product pipeline. Revenue targets were being missed. Relation- ships between the two organizations needed to improve, and the entire process needed to be redesigned to hit the targets. Marissa admitted to a close friend, “I don’t know how to do any of that stuff.”

Bill was an organizational consul- tant who prided himself on being an

unorthodox, “out of the box” manager. He believed revolution, not evolution, was the only way to make change. The problem was that Bill’s approach did not win much support from his clients. He had great difficulty speaking corporate language, following protocol in making a proposal and appreciating how much (or little) shock his col- leagues could absorb in the process of organizational change. Clients didn’t trust Bill. And Bill bemoaned how tradi- tion bound his clients were. Bottom line: Bill changed jobs about every two to three years.

If Marissa and Bill were to team up to address a business priority, they would collectively have many of the needed skills and they could help address each other’s needs for improve- ment. Marissa could ensure their work was practical and earned commitment from the client. Bill could provide some of the organization design expertise that Marissa lacked. If their personal

commitments were aligned, each would learn from the other and as a team they would add more value than either could produce individually. This is the nature of synergy.

5. Take on a new assignment/role. Based on your new perspective from looking outside in, you may find a different assignment or role that aligns well with your current competencies, your learn- ing needs, and the business needs. You may change assignments within HR. Or you may apply your strengths to a

new client group that needs what you can provide. Or you may change mem- bers in your work group to learn from/ mentor each other.

For example, Wayne had earned a PhD in organizational psychology and had applied his trade in his employer’s personnel research department for many years. He was somewhat of a celebrity at national conferences and workshops because of his practical experience and adherence to pro- fessional standards. If you had an employee turnover problem, Wayne was someone you would call on the phone to explore ways of researching the issue. Then Wayne accepted a new assignment to be the HR Generalist supporting a business unit that was struggling to keep its best talent. He applied his skills against a divisional priority, but also learned a lot about the rest of the HR world through the daily issues that came to him. He was a subject matter expert and a student at

Let us be clear that it is the global market place and economic fluctuations that are shaping today’s HR. The marketplace requires organizations as never before to design, assess, and redesign their strategies and systems to improve the bottom line. Adding value in this complex situation represents more work than any army of HR specialists could handle (and remember the “army” is more like a “squadron” when compared to past staffing). The mere sum of our individual HR contributions won’t do.

15Organization Development and Human Resources Management: Knowing Our Place for the First Time?

the same time. The division eventually solved its turnover problem and Wayne expanded his credibility as a generalist.

6. Based on business needs, define those projects that require multifunctional resources from HR and staff them appropriately. Outsourcing initiatives require consultation that addresses operational efficiency, people policies, organization design, talent manage- ment, and change management. Union contract negotiations should be approached with a clear sense of common values, corporate strategy, high performance principles, corpo- rate policy, and labor law. Too often we tackle such issues individually, as the generalist or as the consultant that is supposed to ensure success. The more complex the issue, the more likely it is that one HR person won’t have all of the required expertise. Organizing a multifunctional HR team to address tough issues is another way to build synergy through new work relation- ships and expand each person’s compe- tency in the process.

I saw such synergy in one of my clients that had experienced a melt- down in HR effectiveness. The parent company was under tremendous cost pressure, the lure of business growth had left many parts of the business overextended with shrinking resources. And HR had been downsized and its transactional functions outsourced as one way of coping with the situation. But the business pressures hadn’t gone away and morale among all associ- ates was at an all time low. And just to rub salt in the wound, HR was given much of the blame for the low morale. The most senior HR leaders left the company and the HR function that was needed to regain corporate momentum was itself in a shambles.

Weeks of interviews with business unit and functional leaders as well as with many HR associates documented all of the dynamics that were now play- ing out. Three teams were formed, each with a mix of HR functional experts and credible leaders from different business

units/functions of the company. The three teams each pursued a different target for redesigning the HR function:

» Design the leanest, most efficient HR organization imaginable.

» Design an HR organization that will deliver a talent powerhouse in the future (the company expected to lose some 6,000 employees due to retirement in the next five years).

» Design the HR organization to provide the ultimate in customer service.

Each team had to consider transactional as well as transformational issues in formulating their organizational proposals. All three had to include specific staffing headcounts, organiza- tion structures, development plans, and change management provisions in their proposals. When the three came back together, the company’s General Counsel was asked to review their pro- posals and give feedback. This leader was impressed with what was delivered to him. He suggested that representa- tives of the three teams get together and combine their pieces into one package with this logic:

» The lean, mean machine option serves as the foundation.

» If the Board of Directors would like to have the foundation plus the talent powerhouse and/or customer service benefits, the cost for each addition would be $XXX and $YYY.

» The Board makes the final decision, based on the most critical needs facing the company.

In the end, the Board chose to pay for all three benefits. All board members’ questions were answered in the teams’ package. The case for all three options was compelling. Those in HR were shocked that the Board was willing to spend more than the bare minimum for HR resources. Such a decision could not have been reached without the com- ing together of all HR competencies to meet the business needs.

Putting together all the elements of this outside in and inside out process will require much exploration and

collaboration. There will be moments of pain as we move out of our comfort zones and build a stronger HR community and stronger business results. In the words of T.S. Eliot, “We shall not cease from explora- tion. And the end of all our exploring will be to arrive where we started and know the place for the first time” (“Little Gidding,” 1944).

HR and OD may have co-existed in the past, but as we discard old beliefs and habits, we will truly come together—and know the place for the first time.

References

Durant, W., & Durant, A. (1968). The lessons of history. New York: Simon & Schuster.

Hanna, D. P. (1988). Designing organiza- tions for high performance. Reading: Addison-Wesley.

Hanna, D. P. (2001). Leadership for the ages. Provo: Executive Excellence.

Hiebert, M., & Hiebert, E. (Eds.). (1999). Powerful professionals: Leveraging your expertise with clients. Victoria: Trafford Publishing.

Ulrich, D., & Brockbank, W. (2005). The HR value proposition. Boston: Harvard Business School Press.

Ulrich, D., Allen, J., Brockbank, W., Younger, J., & Nyman, M. (2009). HR transformation: Building human resources from the outside in. New York: McGraw-Hill.

Ulrich, D., Brockbank, W., Johnson, D., Sandholtz, K., & Younger, J. (2008). HR competencies: Mastery at the inter- section of people and business. Alexandria: SHRM.

Copyright © 2010 by the Organization Development Network, Inc. All rights reserved.

Dave Hanna is a principal with the RBL Group, a global profes­ sional services firm committed to creating value through the effec­ tive management of people and organizations. He has worked with Global 500 clients in every region of the world and is the author of two books and several articles on leadership and organization ef­ fectiveness. He can be reached at [email protected].

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