The crises of our day (global coronavirus pandemic, racial and civil unrest, global immigration, economic uncertainty, political squabbles, and personal and emotional malaise) have accentuated the importance of human resource issues to help an organization succeed in the marketplace.
Numerous HR innovations in programs, processes, practices, and digital apps have occurred under the rubric of HR transformation. We believe it is time to offer guidance on the extent to which organization effectiveness initiatives in talent, capability, and leadership deliver results to employees, strategies, customers, investors, and communities. We have developed and offered a free Organization Guidance System (OGS) to guide the portfolio of these efforts.
HR transformation underlies organization effectiveness. We have written books and hundreds of articles, collected data from over 100,000 respondents, offered hundreds of workshops, and consulted on how to deliver HR transformation. We have evolved the study of HR transformation into four stages of maturity and nine domains of action.
Figure 1 provides a comprehensive template for assessing overall HR Transformation along 9 domains for each of the 4 levels of maturity (36 cells overall).
|Domain||Stages of HR Maturity|
|Essential Foundation||Functional (best practice)||Strategic||Outside-In|
|HR ReputationWhat is HR known for?||HR Compliance||HR Functional Excellence||Strategic HR||HR Outside-In|
|HR CustomersWho are HR’s customers?||We are employee champions||We are advisors to managers||We are strategists||We are business proponents|
|HR PurposeWhat is our HR mission? Why do we exist?||We exist to do the basics well||We exist to design and deliver innovative HR practices||We exist to partner with business leaders to help make strategy happen||We exist to add business value that impacts external stakeholders|
|HR DesignHow is the HR department organized?||HR is an efficient organization||HR organizes to offer specialized solutions||HR organizes to match the business organization||HR organizes to build market value|
|Organization CapabilityHow does HR facilitate the right organization?||HR delivers organization role clarity||HR delivers organization systems||HR delivers organizational capabilities||HR delivers ecosystem for external stakeholders|
|HR AnalyticsHow can HR use information to make better decisions?||HR Scorecards or Dashboards||HR Predictive Analytics||HR Strategic Interventions||HR Guidance for Stakeholder Value|
|HR PracticesHow do we create and deploy HR practices?||HR delivers essential work||HR delivers leading-edge practices||HR delivers practices to enable strategy||HR delivers HR solutions that benefit external stakeholders|
|HR ProfessionalsWhat HR professionals need to be, know, and do to be effective?||Trusted Operators||Functional Experts||Credible Partners||Engaged Business Partners|
|HR RelationshipsHow does HR go about doing its work?||HR individual contributors||HR team players||HR as members of business teams||HR stakeholder partners|
Our point of view on HR Transformation is NOT limited to these 36 cells, but the extent to which the work in these 36 cells delivers results. We believe that describing what the maturity and activity of HR can be dramatically advanced by prescribing which of the stages of maturity and domains of activity should be focused on.
Report Guidance on Human Resource Transformation
After 18 months of collecting Human Resources data for the Organization Guidance System (OGS), we can now estimate how investments in each of the nine domains of HR will impact business results.
The results from the Organization Guidance System are startling! First, we had assumed that foundational/essential HR work was not as critical for results as the strategic and outside in HR work.
The results illustrated in Figure 2 inform the effectiveness of HR transformation. We report the global findings by the nine domains of HR activity. Please note these results are aggregated across the global companies we surveyed. Individual organization results will vary based on specific needs and desired targeted outcomes.
- Investing in HR Design (#4) did not have a high impact on any of the business results. We still find that most “HR transformation” work obsesses over HR design.
- Investing in HR Relationships (#9) had the highest impact on financial, customer, and strategic results.
- Investing in HR Reputation and HR Purpose had a high impact on all of the business results.
- Each result (column B, C, D, E, F) is shaped by different HR domains.
|Domains of HR||A
Strategic / Business
|HR Reputation||3.13||GREEN||LIGHT GREEN||GREEN||LIGHT GREEN||LIGHT GREEN|
|HR Customers||3.37||ORANGE||YELLOW||YELLOW||RED||LIGHT GREEN|
|HR Purpose||3.42||LIGHT GREEN||GREEN||LIGHT GREEN||GREEN||YELLOW|
|Organization Capability||3.17||YELLOW||ORANGE||LIGHT GREEN||YELLOW||ORANGE|
|HR Practices||2.99||ORANGE||ORANGE||ORANGE||LIGHT GREEN||ORANGE|
|HR Professionals||3.26||LIGHT GREEN||YELLOW||YELLOW||ORANGE||RED|
|HR Relationships||3.31||LIGHT GREEN||GREEN||GREEN||GREEN||YELLOW|
These findings from OGS: HR dramatically shift the discussion of HR transformation from what is done to what should bedone. The implications of this human resource guidance are profound. Rather than randomly create innovative HR initiatives, business and HR leaders can use the Organization Guidance System to receive rigorous guidance on where to focus for results.