Authority

Like Arnold Schönberg disrupted traditional classical music into what most of you would describe as noise, so has technology radically upset the world of work into what most of you would call a new economic paradigm. Digital disruptors and Unicorns dominate the financial and economic news. They are also spearheading all new HR and organizational thinking. Some of these firms seem to foreshadow the future of what the old Economy will transform into. That new world of work will dictate the way things get organized, decided and executed.

True, the Old Economy is being challenged. It cannot ignore the major transformation it will need to go through. Is the root cause however the digital imperative or a broader cultural force?

If you look at how things get decided in the New Economy, it is clear that classical top-down authority, with a command-and-control hierarchy headed by a CEO, doesn’t apply anymore. This phenomenon has in my eyes nothing to do with the digital imperative. As our western national industrial economies transformed into global service economies, knowledge displaced physical manpower. The workforce evolved from docile doers to educated, technology-savvy, emancipated intellectuals. Generations now of these intellectuals have been raised to function as autonomous individuals. They participate in economic, social, political and cultural life as independent actors, thinking and acting for themselves.

Some companies have long understood that capturing the combined intellectual and executive power of these individuals brings far more value than any CEO can bring with his limited executive committee. More and more companies today are looking at alternative management structures as there is ample evidence the top-down approach is suboptimal. Today’s knowledge workers are eager to displace the command-and-control hierarchies. They understand that with autonomy comes accountability. I believe companies unleashing that potential will be the winners, irrespective of Old and New, as long as they adapt to the digital age.

Let me go back to Schoenberg and all modern classical composers. None have true mass appeal. Bach, Mozart, etc. continue to dominate the classical music scene. In economic terms, the traditional Warren Buffet type companies are not about to disappear. Yes, they will have to adapt to the digital imperative at work. But that’s not really their biggest challenge. The emancipation of the knowledge worker is: how decisions are made and work gets done is up for total renewal. The incessant drive for economic value will leave companies no option but to change how authority is applied.

The philosophers under us which I presume to be few will see in this evolution the Enlightenment at work: horizontal organizations with a deliberative or bottom-up democratic authority show remarkable likeness to our political and scientific systems where equality and freedom dominate.

The economists under us which I presume to be many will see the omnipresent rule of capitalism at work. Both explanations carry validity. I’m sure you have your own explanation. All explanations will be formed by the rule of reason. That’s Kant’s definition of Enlightenment at work: Sapere aude (Dare to know). Remember what the Dormouse said: Feed your head.

Ulrich’s funeral

Over the past 25 years, Dave Ulrich’s model has been the inspiration and lifeline of the HR function. The transformation from an administrative personnel department into a value-add strategic business asset has been the mantra and the raison-d’être of many HR functions. The illustrious coveted seat at the table has been the catalyst for a radical overhaul on how HR viewed itself. It changed its mission, attitude and transformed its competencies. At least that is what is prophesized by the profession.

Reality is that the seat at the table is still for many HR functions a lofty goal. Scanning through the results of many self-assessed HR functions, you cannot deny the partial if not total failure of many of them. Getting from the day-to-day paper pushing to any form of strategic value-add has proven a very tough objective.

The biggest hurdle is the HR function itself. Many HR professionals do not even embrace the strategic objective as they cannot penetrate or gauge what the requirements or benefits would be. The administrative mindset continues to rule strongly in the HR community and the army of administrators seeks safety in numbers. The purely strategic or value-add positions rarely exceed 20% of the HR workforce.

Is it an illusion that the HR function can transform beyond recognition, just like a caterpillar into a butterfly?

The past few decades have shown very mixed results. One of the consequences of the HR transformation is a dichotomy in the HR-function. Talent Management in its broadest meaning has been trying to accelerate its value-add by embedding itself in the business while the rest of the HR function has continued to sideline itself, buried in processes, policies and programs.

The traditional part of HR has reluctantly but incrementally moved with forced changes, like the introduction of technology or globalization of practices. These conservative administrators however continue to push the status-quo and are at best unintentionally harmless. They clog the business with outdated practices and beliefs and stifle the competitive edge of the company’s human capital. Yesterday’s wisdom for yesterday’s world is sadly how today’s human capital is hired, developed, rewarded and exited.

The value-add component of HR is ready to jump ship. The strategic positioners, the credible activists, the capacity builders or whatever fashionable label today applies, are disappointed and disgruntled. The association with the HR function is strenuous and unreal. The value-adders belong in the business, in innovation or change functions, as practitioners and drivers of progress, applying innovative solutions to continuously changing challenges. They continue to prove their business impact and value in daily interventions, pushing reflection, innovation and change. Their strength lies in diagnosing and fixing dysfunctional roles, people, relationships, structures and processes. They co-create with the business a talented network of associates and promote a culture of initiative, collaboration and success. They constantly focus on people and output.

So here’s a thought: reduce HR to a core team of seasoned human capital practitioners. Focus all your internal HR resources on vital talent work. Create a TTT, a talent tiger team.

For all the rest, find another solution, like partners or service centers. Traditional ‘nice to have’ HR functions do not belong in an HR department striving to unlock and create business value through people actions.