The Challenge for HR in the 21st Century Organization: Reengineering Management

by Peter Mark Adams

petermarkadams@gmail.com www.petermarkadams.com

Just as organizations spent huge amounts of energy over the past decade reinventing their operating models their logistics, supply chains, and customer supportthey must now commit themselves to reengineering their management models. Gary Hamel

In many previous articles we have talked about some of the key issues affecting HR such as change management, work values and the new generation, employee engagement and Enterprise 2.0. Whilst all these issues will continue to be critical for the forseeable future, they are about to be overtaken by a far bigger issue: the reengineering of management itself. What do we mean by this? Three key forces: market, technology and generational shift are about to make the management paradigm that we have all lived and worked under for the past 100 years obsolete. But lets step back a little and try to see how and why this will be so. Here are some trends that are highly impactful, unstoppable, imminent and, in fact, world changing. They do not belong to some distant future they are already happening and will continue to accelerate over the coming years: Global peak oil combined with continuously increasing demand for energy accelerates the shift to alternative sources of energy and gives rise to a whole range of new technologies and industries The decline of the petrodollar & the rise of a new global currency empowers a second wave of globalization Economic growth and spending power shifts from north to south and from west to east Fast broadband communication is pervasive and accessible from anywhere through a whole new generation of communication devices Artificial intelligence and expert systems dominate global financial, commodity and stock markets, trading is 24/7 and at the speed of light Company life cycles shrink to just a few years or even months as most fail to cope with the speed of change

Global M&A creates ever fewer megacorporations through which the best local companies in each country become globalized Companies no longer compete with just local companies & local workforces nor do they only access local markets they recruit globally, compete with the best in the world, and operate 24/7 all year round The new Net Generation (or Millennials) arrive in the workplace bringing different values, expectations and patterns of work. They are fluent in English, net savvy, un-hierarchical, and naturally seek to build the kind of cooperative value networks that are essential for effective transnational business. They care about equality, justice, freedom and sustainability and dislike being ordered, supervised or being pressured! The basic unit of work will be a transnational business process held together by a flexible, evolving value network of players consisting of both insiders and outsiders rather like a Facebook network who manage the flows of information and materials to obtain measurable business goals that tie into globalized trading systems. These value networks will span the entire value chain with specialized sub-units focussing on supply chain, forecasting, delivery and service. Because of the speed and connectedness of the new work place, traditional management control and decision making becomes too slow, disconnected and uninformed to control what needs to be done.

How will these changes affect Human Resources?

HR will be at the forefront of managing these transitions. The following issues are likely to arise: HR will find its role increasingly globalized to reflect emerging trends in recruitment and retention Old school managers with significant product, customer and market knowledge will tend to misunderstand the nature and dynamics of the new workplace. They will want it to conform to a more traditional top-down model. This cannot be allowed since it will tend to cancel the gains made from the new technologies and participative value networks. Leadership will emerge naturally from within the value networks traditional management will be redundant but there will be a significant need for coaching across a much broader range of issues some personal but mainly business and technology related HR will need to track & reward performance on a the basis of the value generated by the new value networks which may include both insiders and outsiders who nevertheless generate value for the company In a 24/7 business model, HR will need to proactively manage work / life balance in ways that are compatible with the values of the newer generation to ensure the continuity of a high level of business performance

HR will need to take a lead in introducing social, cultural and environmental initiatives that align with the values of the new generation the company must walk the talk on sustainability and social issues

Finally, HR will need to be able to articulate the nature and implications of all of these changes to executives so that the differences in workplace organization, values and behavior are apparent and the importance of supporting the new situation to ensure ongoing business viability is clearly understood. Becasue of this the larger part of the task is clearly one of reengineering management itself.

Copyright Peter Mark Adams 2010