Interview: How Healthy is HR Now and What Does the Future Hold? (Part 1)

October 13, 2010 – Chris Roebuck advises organizations on delivering organizational performance improvement through people. He is visiting professor of transformational leadership at Cass Business School in London and he has held senior HR roles at HSBC, KPMG and UBS where the project he worked on is now a Harvard Business School case study. Mr. Roebuck also writes for CEO and HR Magazines, frequently speaks at leadership events and is regularly interviewed on television channels such as BBC World, CNBC and Bloomberg. In the following interview, Mr. Roebuck discusses the current state of the HR sector and how the position is evolving.

Discuss the findings from some of your recent reports on the changing nature of leadership in today’s economy.

Just as the world has changed since the financial crisis in terms of markets and customer attitudes it as also changed in the way leaders need to be effective in organizations. The best people to lead organizations prior to the financial crisis are not necessarily the best people to lead them in the current world. The present troubled times require a different type of leadership – more focused on efficiency, customer service and engaging staff than before. The problem is that few organizations have dealt with this change effectively. Many of them are still using the same performance management or selection criteria for leaders that they had before the financial crisis when times were good. In reality they are selecting leaders for a world that no longer exists. In the long term this could be counter-productive. Other data suggests that we still have a significant number of leaders in our organizations who don’t have basic management and leadership skills in place. Even if the organization has an excellent strategy and leadership at the top the ability to execute is restricted significantly by poor management and leadership skills further down. This is simple stuff – that should already be in place but in many cases it isn’t. Its simply about leaders on all levels having the ability to align effort of staff onto core deliverables, to motivate, inspire and develop the performance of those staff and to deliver what the organization needs.

Can you elaborate?

We know from the research by the Corporate Leadership Council that even the most basic leadership activities can make a real difference. A good development plan can increase individual performance by up to 45 percent, good quality feedback by 39 percent and improve performance by over 30 percent. The real message of the change in the world of business since the financial crisis is that previously in good conditions excellent leadership was a “nice” to have but you could get away without it; now it’s a “need” to have and if you don’t have it your organization’s future could well be in doubt.

What are some HR-related challenges companies might be having in terms of diminished budgets?

The challenge of reduced budgets often reveals itself via a knee jerk reaction that involves general cost or headcount reductions across the company dictated from the top. However the evidence suggests that the most effective cost savings are often identified by staff lower down the organization. Cost cutting also tends to hit departments that are seen as a cost, and not a revenue, generator. HR is seen as one of these but transactional HR, such as pay and employment contracts, is a legal and practical necessity so that must be retained – however that means that higher ROI HR such as leadership development is therefore reduced. This can be counter productive. What organizations need now is better leadership for more difficult times. Now is the time to increase leadership and talent activity, not to reduce it. Attention also needs to be paid to the retention of key talent. These key individuals may not be moving now, but when the market picks up if they haven’t been treated well over the past few years they will leave. In any event an organization’s greatest asset are its people. Too many CEOs just say this and then demonstrate they don’t believe it via their actions in cutting HR. Unlike your tangible assets your people can walk out the door. When the financial climate improves people will have opportunities to move elsewhere and unless your organization has demonstrated that it does care about its people they may leave – so its wise to invest in them now.

How are HR staffs using social networking as a tool — and does it work?
Communication failures are the cause of a significant percentage of organizational problems.

So anything that enables better communication across organizations to make things work better is a good thing. That’s the criteria by which these initiatives need to be measured. Pure social networking like Facebook by employees may have some minor benefits in making staff feel part of a community but that should not be a substitute for building a good team culture and good relationships with the people they work with day-to-day. The strength of social networking and allied systems comes where there are people who cannot interact face-to-face easily but who would benefit from the ability to interact in other ways. There are obviously ways to do this more formally such as video conferencing and teleconferencing but these are normally restricted to specific meetings to discuss specific things. It is unusual for other “general” discussions to intrude on the meeting agenda. Social networking access plays a role in generating discussions on an informal and more conversational type basis that allows general discussion of issues and rapid brainstorming. This can play a significant role in solving operational problems, adapting working practices, exploring new ideas, developing new products, sharing best practice across boundaries. Whilst the telephone can do this as well if you know who you need to speak to the social network establishes a ready made and large community to address rather than having to guess who to speak to via the corporate phone book. If used well and aligned to getting better outcomes for the organization not just as a socializing mechanism these networks can add value, but as with email they should never become a substitute for face-to-face contact – remember a significant percentage of communication is non verbal which is why face-to-face discussions are the most effective, however it that’s not possible then networks can play an important role.

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