What are the 3 capabilities of highly effective HR leadership in the future?

3 capabilities of highly effective HR leadership

A number of forces are conspiring to pull HR into the core of the business, writes Jeff Mike, who explains that HR leadership will need three important capabilities to successfully occupy that space

It’s an exciting and challenging time to be in HR leadership. Elemental forces are driving HR out of its long-established functional orbit around the business and pulling it into the core value drivers. Leaders who can effectively navigate this positional shift will have an unprecedented opportunity to bolster business outcomes and worker productivity as well as their own careers.

The forces behind this opportunity include a fundamental shift in the character of companies and a related shift in the nature of work itself. Changing demographics, particularly the attitudes of Millennials and Gen Xers, are pushing companies to embrace and act on purposes that are broader and more fulfilling than profit alone. Witness the rising incidence of employee activism in Silicon Valley and the emergence of the social enterprise.

Digital technologies are not only amplifying the demands of employees (and indeed, all corporate stakeholders), but they also hold out the tantalising promise of a more collaborative and productive workplace. As the tools of data-driven decision-making become more available to employees at all levels, work itself can be reimagined and the role of management fundamentally reshaped.

Instead of command-and-control hierarchies, companies can perform more like symphonies. We are already seeing this trend manifesting in the emergence of what we call the symphonic C-suite, in which siloes are torn down and top leaders play together as a team while also leading their own functional teams, all in harmony.

The above developments are people-centered, and that’s why HR is being pulled into the core of the business. To be able to successfully occupy that space, HR leadership will need three important capabilities that have been revealed and confirmed by Bersin’s high-impact HR research.

“Elemental forces are driving HR out of its long-established functional orbit around the business and pulling it into the core value drivers”

1. Highly-effective HR leadership provides vision and direction
The ability to provide vision and direction not only within HR, but also as an indispensable member of the symphonic C-suite will be essential to the effectiveness of tomorrow’s HR leadership. Our Three Capabilities HR Leadership Needs Now research finds this ability is strongly correlated with organisational performance: 85 per cent of HR leadership in high-performing organisations are effective or very effective at providing vision and direction vs. only 26 per cent of the leaders in lower-performing organisations.

HR leaders must not only be as conversant with the strategic direction of their companies as any other member of the C-suite, they also must contribute to strategy formulation, especially as it pertains to culture, talent, and overall fit. They are the keepers and caretakers of the vital link between people and strategy execution.

In addition to the organisation at large, HR leaders must provide a North Star for the HR function to follow. They need to reframe the function’s mandate from intervention to integration. HR won’t act on the business; rather, it will be embedded in the business. Performance management, learning, rewards, and other HR offerings will need to operate in a manner that reduces or eliminates the frictions that diminish their adoption and constrain employee and team performance and productivity.

2. Highly-effective HR leadership persuades and influences a broad array of stakeholders
To realise their vision, HR leaders will need to become highly-skilled persuaders and influencers. Again, the Three Capabilities HR Leadership Needs Now research found a strong correlation with high-performance: 85 per cent of the HR leaders in high-performing organisations are effective or very effective at persuading and influencing stakeholders vs. 26 per cent of the leaders in lower-performing organisations.

“AI has the potential to transform performance and productivity, yet many HR leaders are sitting on the fence. Instead, they should be leading the charge”

The success of the social enterprise hinges on team-building prowess, on the development of a welcoming culture of collaboration, and on the digital transformation of key HR processes. Without the luxury of the command-and-control, HR leaders will have to rely on their ability to persuade and influence other people – from the C-suite to the customer-facing frontlines and into the broader business ecosystem – to embrace change and act.

For many HR leaders, the ability to convince others also will hinge on a more courageous approach to risk. In the past, HR leadership was often called upon to provide an expert opinion in go/no-go decisions, but they rarely had to fully shoulder the risk of business bets. Now they will have to find ways to navigate the people-related risks associated with disruption while maintaining progress towards business imperatives.

3. Highly-effective HR leadership is an agent of change
The more courageous new approach to risk needed to support the ability of HR leadership to persuade and influence will also be critical to their success as change agents. Once again, our research establishes a strong correlation between this capability and organisational performance: 81 per cent of the HR leaders in high-performing organisations are effective or very effective at driving change and innovation vs. 21 per cent of the leaders in lower-performing organisations.

Tomorrow’s HR leadership will exchange information and ideas, experiment with work-related technologies, and explore new ways of working. They will lead the effort to create and nurture the organisational culture of innovation, experimentation, and open-mindedness that will be needed to drive outcomes in social enterprises.

This capability will be especially valuable in the realm of technology. Take the outsized promise of artificial intelligence (AI). There is no doubt that AI has the potential to transform performance and productivity, yet many HR leaders are sitting on the fence. Instead, they should be leading the charge.

The beginning of a new year is a natural time for reflection. This year, the most effective HR leaders are preparing themselves and their organisations to drive business growth. Are you among them?