Enterprise 2.0 Diagram

I ran across this quite interesting and comprehensive e2.0 diagram and thought I’d share.  I like how it’s organized with Actors, Technologies and Methods as part of the engine behind e2.0, but as usual I have a few comments.

I probably would have phrased the Business Drivers differently – perhaps removing it as one of the towers and instead phrasing the business drivers into a e2.0 governance area that carries through the other 3 towers of actors, technologies and methods.  In fact, the actors technologies and methods are always revalidated as the e2.0 function takes place and as business needs change – the tools iteratively adapt.

I’d also would likely have rephrased the Value Add tower.  While I really like all of the elements in it, I think ultimately the value add are a couple of elements not in this tower – namely collaboration and new innovation.  Collaboration is noted in the technologies and methods towers, and I think it’s misplaced, but that’s just my opinion.

All in all, a wonderful visual explanation of e2.0, among the best I’ve seen.

Hat tip to Susan Scrupski

The Stupidity of Crowds

I have a lot of favorite bloggers.  I think I’ve tipped my virtual hat over to Rob Millard quite often here, but I was going backwards in time reading some of his old posts and got to reflecting on an old post if his on the “stupidity of crowds.”  We are, I am confident, soon heading into a Web 2.0 business world filled with social media that will have many of us interacting on-line and creating knowledge.  Whether this knowledge is wise, accurately interpreted, and leads to valuable innovation seems to be a conclusion we’ve already agreed upon.  Perhaps it’s reasonable to question this conclusion however.  Millard states:

Conventional wisdom holds that crowds are “wise” and that all things being equal, the more inclusive a decision making process and the larger the number of people in a group making a decision, the more likely the “correct” decision will emerge.

In his landmark book on this topic, The Wisdom of Crowds, James Surowieki asserts that the conclusions of a large group can often be better than those of a small group of experts, simply because large groups can aggregate a large amount of dispersed wisdom.  ((Millard, Rob, September 28, 2006.  “The Stupidity of Crowds.”  Retrieved from http://www.robmillard.com on July 13, 2008.))

As Millard states, the wisdom of crowds is wholly dependent on the idea that large numbers of people can consume larger amounts of data.  However, in practice, it seems to me that large numbers of people simply consume the same small amounts of data that is fed to them from the experts.  Therefore, it’s still the small number of experts that collect and synthesize data into innovations.  Perhaps as the data is being synthesized, external non-experts can contribute perspective, they are probably not a part of the innovation process.  Without the experts doing most of the heavy lifting, I’m not sure I really want the masses creating my innovative wisdom.

Perhaps all social medias are really going to do is identify the experts, and bring them together in a simplified fashion.  The question is how we’ll identify those experts, and how we minimize the negative impact when a non-expert is mis-identified.  Theoretically, social medias will provide some sort of a self vetting process, but HR will also need to apply competency and skill databases to ensure that social medias are working optimally.  Last thing we need is for us to enhance collaboration between those who have no business collaborating in certain topics.  Let’s keep it to the experts, so let’s make sure we apply our talent databases as we deploy our social medias.

Innovation is an HR Problem

I was reading an article in a recent McKinsey Quarterly on innovation.  The Quarterly was interviewing Brad Bird from Pixar, and I was surprised how often employee engagement came up.  Sure, Brad talked about collaboration and all the rest, but the engagement of the employee teams surprised me.  In HR, we all know that employee engagement is critical, but we don’t always expect our leaders to phrase it in the same way, using those words.  Perhaps the message is starting to sink in.

It’s quite obvious to us in HR that an engaged employee is one who will contribute better to our organization’s future.  They will be more productive and put in more of the personal discretionary time.  But cutting to the chase, they care about success more and will try harder.  When it comes to innovation, put into the context of engaged and unengaged employees, you simply can’t innovate unless you’re engaged.  It’s almost contrary to the definition of engagement.

The problem is that it’s clear that employee engagement is an HR issue.  But if engagement is low, innovation is also low, and this seems to be one of the global prime directives of business at the moment.  “Innovate or die” is something I’ve heard often recently, and while not a nice through, global competitive forces may make it true.  Well if “innovate or die” is correct, and innovation cannot exist without engagement, then perhaps “engage or die” should be HR’s slogan.

Here’s a couple of snippets from the McKinsey interview.

The Quarterly: Do angry people—malcontents, in your words—make for better innovation? Can you be innovative and also happy?

Brad Bird: I would say that involved people make for better innovation. Passionate involvement can make you happy, sometimes, and miserable other times. You want people to be involved and engaged. Involved people can be quiet, loud, or anything in-between—what they have in common is a restless, probing nature: “I want to get to the problem. There’s something I want to do.” If you had thermal glasses, you could see heat coming off them.

The Quarterly: It sounds like you spend a fair amount of time thinking about the morale of your teams.

Brad Bird: In my experience, the thing that has the most significant impact on a movie’s budget—but never shows up in a budget—is morale. If you have low morale, for every $1 you spend, you get about 25 cents of value. If you have high morale, for every $1 you spend, you get about $3 of value. Companies should pay much more attention to morale.  ((Hayagreeva Rao, Robert Sutton, and Allen P. Webb, April, 2008.  “Innovation lessons from Pixar: An interview with Oscar-winning director Brad Bird.”  Retrieved from McKinsey Quarterly on July 13, 2008.))

Where People Fit in the Toyota Way

A while back I wrote a series on the Toyota Way.  Toyota is unquestionably one of the top manufacturing companies in the world producing high quality products at a very low cost.  At the center of this is the Toyota Production System (TPS) which formalizes production structures throughout the manufacturing process.  However, behind the scenes is a culture of innovation that permeates the entire company.  Other companies can mimic TPS, but creating a culture of innovation continues to be their greatest challenge.

Toyota believes that efficiency alone cannot guarantee success… What’s different is that the company views employees no just as pairs of hands, but as knowledge workers who accumulate chie – the wisdom experience – on the company’s front lines.  Toyota therefore invests heavily in people and organizational capabilities, and it garners ideas from everyone and everywhere: the shop floor, the office, the field.  ((Takeuchi, Osono and Shimizu.  June 2008.  “The Contradictions that Drive Toyota’s Success.”  Harvard Business Review, Page 96.))

While we’d often believe that Asian companies must be more hierarchical, at Toyota, the collaborative and innovative culture is actually flatter than in leading organizations in the U.S.  Regardless of the actual organization structure, the ability to present any idea flattens out the company and allows innovations to happen more quickly and easily.  We see the same type of thing at Google where employees can go work on whatever they want and Google will see which ideas eventually “float”.

Toyota fosters a complex web of social networks because it wants “everybody to know everything.”  The company develops horizontal links between employees across functions and geographic boundaries, grouping them by specializations and year of entry; creates vertical relationships across hierarchies through teaching relationships and mentoring; and fosters informal ties by inviting employees to join clubs based on birthplaces, sports interest, hobbies, and so on.  ((Ibid))

I’ll be honest and state that I have no idea if Toyota has implemented any type of a social network technology, but this is basically what we’re talking about: something like Facebook.  In Serena Software’s well known Facebook Friday’s where employees are given an hour to network and collaborate each week, some of that time can be spent simply playing on-line scrabble across continental borders.  This type of “getting to know you” activity eventually leads to better collaboration opportunities as you have made relationships and have an understanding about skillsets in other areas.  We seem to be starting the processes of creating these networks in our own organizations, but adoption across the enterprise will be our greatest hurdle as some older employees are still wary of social medias and privacy.

HBR goes on to outline some key characteristics of Toyota executives:

  • Willingness to listen and learn from others
  • Enthusiasm for constantly making improvements
  • Comfort with working in teams
  • Ability to take action quickly to solve a problem
  • Interest in coaching other employees
  • Modesty  ((Ibid))

As I looked at this article from a Human Resources point of view, it became apparent to me that everything revolves around engaging employees in a culture of communications.  This is not only laterally with a flow of ideas, but also up the management chain where receptivity to ideas is very high.  We in HR have the opportunity to help create and implement these networks in our own organizations.  We have the ability of providing employee portals that allow and facilitate communication and feedback.  But while we sit around focusing on automating a performance process that is probably already broken, have we taken a look at engaging employees in an endeavor that will influence the productivity of the enterprise?

SystematicHR’s Thoughts for 2008

I suppose that I do need to put together a list of things I’m especially interested in this year. Many of these are already trends. Some of these will never be, but are things perhaps only I am interested in. Other ideas might actually emerge in 2008.

  1. The War for Talent: People will realize that there is no war for talent. In fact, this war is just a misnomer for our inability to develop the best. Therefore we have to try and steal the best from elsewhere. Rather than calling it a war for talent, why don’t we just concentrate on talent management?
  2. Innovation: I’ll continue to be interested in innovation and collaboration models. First of all, they are interesting topics. Second, and more importantly, these are concrete areas where the workforce strategy meets up with the business strategy. It’s our best shot in HR to gain greater access to the business. We should be paying more attention to these and other opportunities like them.
  3. Web 2.0: Yes, I’m sick of it too. I don’t want to talk about it, I don’t want vendors to talk about it, and I certainly don’t want to hear anything about Web 3.0. However, I do want to SEE what everyone is going to do with this. The re-visioning of how applications work and create more usable spaces for practitioners, employees and managers is very exciting. Let’s cut the jargon and just make it happen.
  4. HR Service Delivery: We seem to be focusing on a few too many things. Between technology implementations, workforce planning, the “war” for talent, and other initiatives, some of us have forgotten that our HR function and service delivery model are not working. If the core is not working, all of our strategies are just band aids. It’s time to look at service delivery again.
  5. The Vendor Space: I just can’t resist this. I’m looking for more consolidation as well as more innovation. While we need to service delivery model to be effective, the vendors are also providing us with incremental improvements every time they have a new release. We just can’t ignore the benefit they provide to the HR function, and I’ll continue to watch them closely.

There you go. That’s my short list, and while I’m sure everyone else will come out with a list too, these 5 should sum it up for me. Let’s have a great year.

Collaboration is Innovation

When it comes to innovation, the myth of the lone genius dies hard. Most companies continue to assume that innovation comes from that individual genius, or, at best, small, sequestered teams that vanish from sight and then return with big ideas. But the truth is most innovations are created through networks — groups of people working in concert.  ((Cross, Rob, Haragadon, Andrew, Parise, Salvatore and Thomas, Robert.  September 14, 2007,  “Together We Innovate.”  Retrieved from http://sloanreview.mit.edu/smr/ on October 1, 2007.))

A few months ago I republished a picture that showed us what innovation looked like.  By charting thousands of scientific papers and the papers they references, you could actually create an image that showed the collaborative effects of a scientific community’s impact on generating new scientific findings and innovations.  The interesting thing about this was that new innovations had to draw upon old innovations, and the same goes for the business community.  Very little happens in a vacuum, and it turns out those water cooler conversations are critical to our business’ health.

While it’s possible that a small number of individuals might generate the largest amount of innovations within an organization, those innovations are usually going to be the result of many conversations and minute refinements over a long period of time.  The trick here is that sometimes the innovators don’t know each other.

The other problem is that there are some people in the organization that may not be high volume innovators, but are brokers of critical information.  These people are the center of data and knowledge, are trusted by many in the organization for insight, but simply might not be the ones to come up with the next radical idea.

As part of HR’s talent management program, we should be helping our organization by identifying competencies that contribute to innovation.  By doing so, we can ensure that these resources are most tied into critical parts of the organization and are in the path of information distribution channels.  Identifying and then tying together innovators and knowledge brokers is one of those critical HR functions that has everything to do with talent management simply through the competency data that we have at our fingertips.  Innovation is a critical staple of our businesses, and HR has the power to enhance it.

Driving Innovation by Creating Culture

This entire year I’ve been talking about topics that most HR people don’t talk about.  Innovation and collaboration are often thought of as the domain of the business side.  It’s really the guys in production or R&D to figure out how to innovate, or so we thing.  We’re dead wrong.  I finally found a whitepaper that creates the linkages between what HR can do about innovation and producing the results for the business.

In ISR’s case study for innovation, they outline a series of drivers for creating a culture that bolsters innovation:

When examining results from its analyses, ISR concluded that four issues stand out as particularly important for this company to improve in order to support innovation more effectively – leadership, collaboration and teamwork, rewarding innovation, and bias for action. In the first analysis, ISR found that, of the cultural dimensions supporting innovation, these four issues were among those rated least favorably by company employees when compared with respondents in high-performing organizations. Therefore, there is room to improve in each of these areas.  ((ISR, 2005.  “Building Culture of Innovation.”  Retrieved from ISRinsight.com.))

It’s interesting to me which were ISR’s 4 major drivers.  Collaboration and teamwork is certainly not a surprise, but I’m a bit shocked that “support for risk taking” and “stimulating environment” were not higher on the list.  Generally I would have thought that a stimulating environment (not on the list) and “collaboration and teamwork” (on the list) would have been tightly correlated.  Similarly, a “bias for action” and “support for risk taking” were also not directly correlated.  It’s interesting when you see an organization that can actually measure these drivers within the workforce and put the numbers to good use.  While HR is not usually deemed as a key stakeholder for driving innovation, we are up there for building a corporate culture.  Linking these two may be HR’s best route to impacting the bottom line.

Changing Management Culture to Improve Employee Creativity

More and more of the literature that is out there (at least what I’m reading) is about innovation.  Business thinkers are clearly over the fact that R&D, engineering and production is moving offshore.  They realize that those tasks can go away, so long as we keep our edge where it counts – thinking up new ideas and being creative and innovative.

Here’s the problem.  Employees are most reticent not to talk about problems with work, but about creative ideas for improving performance.  They have an untested belief that managers react negatively and feel “shown up” by their subordinates.  ((Detert, James R. and Edmonson, Amy C.  May 2007.  “Why Employees Are Afraid To Speak.”  HBR May 2007, Pgs 23, 24.))

What needs to happen is deep rooted cultural change.  It appears that both managers and employees contribute equally to the perception.  Urban myths around employees who said something “wrong” and then were suddenly gone are pervasive and cross all organizations.   The changes that are needed are really cultural in nature.  Making employees feel like they can safely speak must be rooted in an understanding that leadership acknowledges the incredible benefits that are available when employees innovate openly.

Another possible tactic is to counteract these untested employee assumptions with tangible rewards.  Rewarding employees for successful innovations has long been a part of great R&D companies, and the same tactics can be used in any organization.

Organizing for Innovation

You manage talent for a large organization that needs to innovate in order to stay competitive. How do you know what types of innovations are important and how do you attract the types of innovators that your organization needs? Some research coming out of Harvard has once again given us some answers:

Based on in-depth, longitudinal data on 13 business units and 22 innovations, we investigate the consequences of organization design choices on innovation outcomes as well as the ongoing performance of existing products. We find that ambidextrous organization designs are significantly more effective in executing innovation streams than functional, cross-functional, and spinout designs. Further, transitions to ambidextrous designs were associated with significantly increased innovation outcomes, while shifts away from ambidextrous designs were associated with decreases in innovation outcomes. ((Michael Tushman, Wendy K. Smith, Robert Chapman Wood, George Westerman and Charles O’Reilly. May 21, 2007. “Organizational Designs and Innovation Streams.” HBS Working Knowledge. Retrieved from http://www.hbs.edu on June 17, 2007.))

My first thought was that I would never have made it at Harvard (try reading the whole paper). My second thought was that I should write about this. Basically what the authors are talking about in ambidextrous design is the combination of exploitive and exploratory approaches to innovation. When we talk about talent, it makes life a bit simpler if we know that the best source of innovation is not singular, but a combination of completely new ideas and continuous development on old ones. What this means for talent is we’re not trying to focus our efforts on just one thing. Instead, our best approach is to recruit

  • the types of employees who will have new ideas,
  • those seasoned professionals who have exposure in many other places and can help redefine our existing processes
  • internally groom employees to think differently about current processes and challenge them continuously

What’s especially lovely about this is we’re always focused on specific competencies. When it comes to innovation, we don’t need to be. The proven approach seems to be that your most effective approach will be to go broad and wide.

HR Needs to Be Scared

Why?  Because we’re not doing our jobs and our bosses know it.

Workforce Magazine published an article saying “Business Leaders Don’t See HR as Key to People Strategies” and Thomas Otter asks a bunch of us this question:  “HR-HCM folks, does this concern you?”  Absolutely yes it does concern me.  And this isn’t the first time I’ve said so.  I feel like I’ve spent the last six month preaching that while HR has a “seat at the proverbial table” we’re just sitting there twiddling our thumbs.  We are all overjoyed that we’re doing great new things like talent acquisition and talent management – topics that have captured the deepest thoughts of our CEO’s.

But let’s face it:  The CEO doesn’t care about talent management!!!!

“Really?” You ask.  “Dubs, I change my mind about you.  You’re an idiot.” Well, let me rephrase.  They only care about talent in so far as they know they need it and they want their talent to perform.  HR thinks about talent management and we get ideas of training and performance reviews and merit processes.  Let me restate.  The CEO does not care about any of the above.

I’ve been sitting around the last few months preaching that it’s about innovation networks, collaboration and the resulting advances in technology, process, productivity and profits.  These networking ideas are “people” things that are a direct downstream result of the organizations ability to mobilize and get talent into a workable organizational model.

Only 23 percent of corporate leaders see their HR departments as currently playing a crucial role in coming up with corporate strategy and having a significant impact on operating results. And although business experts increasingly recognize people as a key intangible portion of a company’s market value, 63 percent of executives rarely or never consult their HR team on mergers and acquisitions. Even when it comes to regulatory compliance, a traditional HR domain, 26 percent rarely or never check in with HR.  ((Kiger, Patrick, May 29, 2007.  “Business Leaders Don’t See HR as Key to People Strategies.  Workforce Magazine.  Retrieved from http://www.workforce.com on June 17, 2007.))

I’m not saying that the current pieces of talent management are unimportant.  Just like being on point when there’s a harassment case or the unions want to negotiate, there are some things we just have to do.  And when we focus on things like recruiting and performance, we’re thinking about talent, but not in ways that are always relevant to the business.  At the end of the day, CEO’s don’t care if they have talent.  They care if their talent is producing results, and if HR thinks that we can’t play in that game, then we should just get out of the game.

How Talent Networks Increase Profits

Getting the right people and retaining them is the start of building a great workforce. Engaging them to your brand is the next step. But the true work of optimizing the workforce is going to be in defining how the individual talents collect and relate to each other to produce value.

Talent is the scarce resource because it is the ultimate generator of the intangibles that drive the creation of wealth in the digital age. Winning companies are those that can increase their profit per employee by mobilizing labor, capital, and mind power into profitable institutional skills, intellectual property, networks, and brands.

The opportunity to create wealth by reducing unproductive complexity and increasing productive interactions is great in today’s corporations. The numbers rapidly become large. If a company with 100,000 employees makes internal organizational-design changes that add $30,000 in profit per employee, for instance, that would mean $3 billion in extra profits. Since they would be what economists call “rents”—additional earnings requiring no additional, marginal investment of capital or labor—they would create $30 billion in new wealth (at a 10 percent capitalization rate).  ((Bryan, Lowell and Joyce, Claudia. “Better strategy though organizational design.” McKinsey Quarterly, 2007, Number 2.))

There is no doubt that organizations who can optimize collaboration will ultimately perform better. People work better and develop more quantity and quality of ideas when there is some “group think” going on. When resources are readily identifiable and accessible, speed to innovation increases. Unfortunately the histories of our organizations reward people for individual contributions, or achievements that are so broadly aggregated that it means nothing at all. Take for example sales incentives or corporate profit sharing. Also unfortunately, it’s currently too hard to measure collaboration to reward it.

That’s why basketball players are measured on their ability to get the ball to players who then score—assists, to use the technical term—as well as on the points they themselves score. ((Ibid))

If however we can move social networking into the employer domain, it’s possible that we can eventually get to “assists.”

Digital technology provides the means not just to promote efficient, effective, and large-scale collaboration but also to measure each person’s “assists” and thus motivate employees to collaborate in ways that were not possible in the past. ((Ibid))

HR needs to take a firm grasp that our leadership is not about ensuring the future state of the workforce. That task is already at hand and should not be considered leadership. We need to be thinking ahead of the curve past the simple concepts of attracting, managing and retaining talent, and onto the strategies of creating effective collaboration capabilities within our organizations.

Evolving from Knowledge Management to Innovation Networking

Knowledge management was all the rage a decade ago.  People realized the need to maintain institutional and intellectual capital as employees filtered into an organization, created new knowledge, and then often left the organization leaving little trace of the knowledge they developed and didn’t share effectively.  But knowledge management didn’t really take off as a practice.  More than hard core data building, knowledge management was replaced by increasingly better search capabilities, the decreasing cost of storage and disk space, and the increasing digitization of our work.  All of this led to the capture of knowledge that was more effective than any attempts to archive and categorize knowledge – although there has been some of that as well.

Today, we’ve shifted from making sure we “know what we know” to “knowing who knows what we know.”  Wow, that’s pretty convoluted sentence structuring, but the bottom line being that in the ever increasing pace of innovation, we have to be able to mobilize innovation capabilities at an exponential rate.  Simply having knowledge and creating more of it on a linear scale is meaningless in today’s world – that tactic would put you 50% behind your nearest competitor within a year.  What matters is that you can mobilize the people who are best able to broker knowledge within the organization to increase the rate at which knowledge connections are made.

So again I ask “why does HR care?”  Well aren’t we the people people?  And aren’t we the competency people?  Shouldn’t we be the ones identifying who our best innovation networkers are?  Isn’t the ability to collaborate effectively a skill we should be tracking?  We’re not trying to figure out who are the smartest people in our organizations, although that does impact the ability to innovate.  We are trying to catalog a particular set of skills that allow innovation to happen.

Yes it’s possible that innovation and collaboration networks can be mapped, but the reality is that very few of our organizations are going to be spending the huge time investments it takes to perform this task today.  What we can do is have our managers help us identify who has these competencies and get them recorded into our talent management systems.  Our managers surly have a pretty good grip of who their go to people are, and with these people in the talent systems, it gives management not only an idea of how their innovation network functions, but also gives us another basis upon which our succession plans as based on.

It would also be critical for HR to be looking at some of the key metrics for this population – minimizing the turnover in this population might be the most important turnover statistic you generate, as is probably different from the turnover statistics you’re doing today.  Having an upward trend in terms of headcount for this population over time would also be a very positive indicator that you’re recruiting the right type of people.  In the end, having an innovation and collaboration focus in your HR practice and filtering that through to the functional components to increase recruiting and retention of the “right” people will eventually drive your partnership with the overall business.

Does Web 2.0 Suck?

Michael thinks web 2.0 sucks.  Actually, he doesn’t, he’s the biggest user of new technologies I know.  But enterprise users have been slow to adopt the technology.  I talked about capturing collaboration networks in HR using web 2.0 technologies, but take a look at Sean Rehder’s excellent rebuttal in the comments section.

There are good reasons HR is having a hard time with web 2.0.  Some of the easy things will be ajax in our ESS and MSS sites to provide a bit more immediate user satisfaction.  But when it comes to blogs and wikis, those are currently the domain of product development and R&D – really the only places where web 2.0 has taken off within the enterprise.  They need spaces where they can share and record knowledge, where writing about their software code edits can be edited on-line by other people.

So if my idea of collaboration networks using tagging didn’t pan out, how about utilizing wikis in learning and knowledge management?  We have these huge LCMS (learning content management systems) that are constantly updated.  Content is constantly being revised, updated, outdated, and the current tools out there are not as flexible.  Granted, I don’t know how to engineer a wiki into an LCMS so it would make sense, but perhaps someone out there has an idea.

Don’t get me wrong – I think we all love web 2.0.  We just don’t know how to apply it to HR.

Innovation in Human Capital Management

In my existential search for meaning in HR, I’ve tried for a very long time to understand what HR could really do for the business.  Certainly talent and our ability to contribute to directing talent’s growth through talent management is very important to our organization’s viability and competitiveness for the future.  But this doesn’t change the way we look at human capital.  In fact, to most of us, human capital are simply producers.  Yes, we are increasingly a service society, but our view of human capital has not substantially changed.  For HR to be viable in the future, we need to rearrange our understanding of what human capital is and what their contributions are.  Without this fundamental change, we cannot successfully change our approach to HR strategy.

As I stated before, the new value of human capital is innovation.  The days that workers brought skills, labor, know-how to their jobs is over.  Today, we call ourselves a knowledge economy.  But we’re so far past looking for simple knowledge that if we treat knowledge and intellectual capital as our most important assets, we’re screwed.  Innovation capital is so much more.  Beyond simple knowledge, it’s our employee’s ability to analyze, problem solve, and innovate.  It’s the ability to be constantly creative and bring new ideas to the table consistently.  It’s the ability to collaborate as a complete organism to develop and retrieve the best ideas out of the organization.

Innovation and new knowledge generation is not new, we just don’t think about it in HR.  We’re so involved with our HR workforce planning and our talent management, we’ve missed out on the fact that all this talent operates within an organization.  It’s not the organizational culture that makes success.  Neither is it talent that makes success.  The interplay between culture and talent to create an environment is what will breed success.  I’m not saying that we get away from talent management, HR metrics, and workforce planning.  These are all good and necessary pillars that will hold up true and ongoing innovation.

But why can’t we just stick with talent management?  Because talent management does only addresses a small part of the core business need of the organizations we work for.  In today’s knowledge economy, what matter is the creation of ideas.  While necessary, talent simply allows us to fill orders (perhaps very well) and increase performance capacity.  It does not modify the way people “think” and connect ideas.  The only way this is done is through careful and cultural attention to how we create ideas, and ideas are not created individually.

I’m not saying that innovation is an important output of or employees.  I am also obviously not saying that innovation is the sole domain of the operations and production side of the business.  I’m specifically saying that innovation is the single most important value element that our employees produce.  Employees bring talent.  Therefore we must manage the talent of our employees.  But the output of talent is innovation.   Therefore we must manage of talent must be directed to the production of innovation.

HR Strategy – What Really Matters?

Harvard Business Review recently published that “Most traditional HR performance metrics – such as employee turnover rates, average time to fill open positions, and total hours of training provided – don’t predict organizational performance.”  ((Bassi, Laurie and McMurrer, Daniel, March 2007. “Maximizing Your Return on People.”  Harvard Business Review.  Retrived from http://www.hbr.com.))  Instead, they correlated organizational performance with five human capital drivers.  These are:

  1. Leadership Practices are really the message from the top.  It’s about the employer brand, the company mission, and the executive’s ability to act and execute in accordance with that vision.  Without the top, the supporting organization simply fails.
  2. Employee Engagement is the employee’s individual and collective commitment to the organization and their work.
  3. Knowledge Accessibility is about the organization’s ability to cause learning sharing.  It’s the cultural component of the organization that fosters increased productivity and innovation.  More than simple knowledge management, it’s about active and open sharing.
  4. Workforce Optimization is mostly what I’d call talent management.  These are the processes you’ve put in place to create the type of workforce that you want in the future.  The performance plans, if effective, provide direction and momentum to your workforce needs.
  5. Learning Capacity is the organization’s ability to “cause” learning growth through a collaborative culture.  ((Ibid))

The state of HR is that most of us are aware of at least employee engagement and talent management (workforce optimization).  We realize that we need to engage our employees, and continue to develop them.  Unfortunately, I’m not sure we as HR practitioners know what to do with some of the other areas.

The areas that we may not be as good at are those areas that are more qualitative – these are cultural elements of our organization that are hard to express, hard to measure, and hard to modify.  However, in the interest of “changing the game” I think we need to come up with ideas about how to manage these rather tenuous and ideas.  Our human capital are no longer producers of products.  The value of their work is much more heavily invested in knowledge and intellectual capital.  As this shift in what’s valuable from our employees happens, we need to also have a new understanding of what human capital means and how to manage it.

Some would argue that talent management was the answer.  It wasn’t.  While talent is incredibly important, talent management exists because we understand that we need to grow our talent more organically from the inside if we want to continue to be competitive.  Of course talent management has all sorts of other great outcomes like engagement and productivity, but in and of itself, talent management didn’t shift our understanding of how human capital operates, nor did it redefine our understanding of the value of human capital.

We need to find entirely new constructs for human capital with the new understanding that the actual capital is now knowledge.  Too long have we “known” this but not “understood” the real meaning.  If we really understood the meaning of knowledge and intellectual contributions, we’d have long since shifted from our focus on the person and their growth to the organization, and how the organization can support the person.  I’ve been trying to figure this out for a long time.. what’s the next big innovation in HR?  I think it’s tying all of our HR strategies to complementing the case for innovation in our knowledge economy.  More on this later.

Redefining Innovation

The American Heritage Dictionary simply defines innovation as “The act of introducing something new.”  ((American Heritage Dictionary.  Retrieved from http://www.dictionary.com on April 3, 2007.))

ZDnet has a pretty nice CIO interview series.  In one of them, Steve Cooper, the CIO of the Red Cross talks about innovation and some of their hurdles from the Hurricane Katrina disaster.  Mr. Cooper states, “I used to think that innovation represented brand new ideas that nobody had thought up before. Now what I realize is that innovation can take additional forms. It can simply be the application or reuse of other people’s ideas in an environment where that idea has not been introduced before.”  ((Cooper, Scott.  “Fostering innovation in the midst of disasters.”  Retrieved from http://www.zdnet.com on April 3, 2007.))

I’m not entirely sure I agree with his definition of innovation.  I think that for the most part, we think of innovation as something that is new to the world, an idea that will give our company a cutting edge advantage for a period of time.  Mr. Cooper’s redefinition strikes me as simply catching up to your competitors.  He does however have some ideas on fostering innovation.

What I’ve tried to do and how I believe you can create and influence a culture of innovation and, quite frankly, a culture of risk taking – appropriate risk taking – is to leverage a level of what we’ve labeled a “center of excellence.” So you take people who are bright, talented, not afraid to fail, not afraid to take risks, who can think out of the box, so to speak, I know that’s a bit of a cliché phrase, but it really does mean to think differently than the way things are normally done, and to give them really difficult problems. You give that to a couple centers of excellence, and the centers of excellence, by the way, might be uniform skill sets.  ((Ibid))

So put a real pilot in place and see whether it works. If it works, then what we want to do is begin to expand that out to more and more geography, more parts of the business, to more business units. If it doesn’t work, we don’t give up. We take a look and say “well, what happened here? How come we expected this to happen, it didn’t happen.” We make adjustments and we kind of go at it again.  ((Ibid))

Instead we’ve created a very small, six people, six people, innovation center and it is literally named “innovation center.”  Those people are not focused on pie in the sky over the horizon technology. They work directly with our client account managers, the customer facing folks that work directly with business units and they’re part of the IT organization but they’re business people. They’re requirements analysis people. They understand business first and they may have some, but they’re not in deep technology experts. They figure out what are the business objectives, goals, challenges that are face by our business units. They then sit down with the innovation center staff and they say “hey look, I need to figure out a way to…”  ((Ibid))

What Innovation Looks Like (really)

Image information in footnote  ((Research and node layout by Kevin Boyack and Dick Klavans; data from Thompson ISI; graphics & typography by W. Bradford Paley. Commissioned and partially supported by Katy Borner and the Places and Spaces: Mapping Science exhibition. Copyright (c) 2006 W. Bradford Paley, all rights reserved. (But you may print a version for personal use, and optionally donate to i|e or Places & Spaces if you want to be a good infosphere citizen.)  ))

Nature.com recently published this topic map of how scientific paradigms related to each other. Similar to innovation and collaboration networks we’ve been discussing here, this scientific paradigm map directly displays the relative influence of particular nodes on furthering research. While it’s easy to do in academic research since everyone is militant about citations (like I am here on systematicHR), in the less formal business world where self interest sometimes gets in the way of the greater good the mapping process becomes a bit more gray.

Take a look at the discussion threads and let me know if you have any ideas on how we could apply this in HR. At first I thought the whole thing looked rather parasitic, but as I studied it, it’s really a creation that’s quite beautiful (in an odd sort of way).

As to what the image depicts, it was constructed by sorting roughly 800,000 scientific papers (shown as white dots) into 776 different scientific paradigms (red circular nodes) based on how often the papers were cited together by authors of other papers. Links (curved lines) were made between the paradigms that shared common members, then treated as rubber bands, holding similar paradigms nearer one another when a physical simulation had every paradigm repel every other: thus the layout derives directly from the data. Larger paradigms have more papers. Labels list common words unique to each paradigm.   ((W. Bradford Paley, December 24, 2006.  Retrieved from http://wbpaley.com/brad/ on March 29, 2007.))

Web 2.0 Networks and HR

This is an increasingly featured topic on this site.  Innovation networks and collaboration networks are of great interest to the business community because it ties together how work and product actually gets done.  Sure we have our formal organizational hierarchies, and we have process flow charts that rout our activities to each other, but the world knows that this is not how business actually gets done.

Ever notice that Linked In is loaded with Recruiters??  That’s not the point of this post, but I think we can all agree that the recruiting function of HR has long since discovered communities as an avenue for adding talent to organizations.   But recruiting is only one small part of the HR function.  What about talent management and organizational design?  ((Community Group Therapy.  February 28, 2007.  “Exploring communities and corporate HR…”  Retrived from http://communitygrouptherapy.com on March 18, 2007.))

Innovation and collaboration networks will be increasingly seen in the business over the next decade, but it’s rarely thought of for HR (except perhaps here on systematicHR or on Talentism).  If we’re only talking about using a social network and community for recruiting, how could we apply this to talent management?

  • Learning:  this is probably the easiest to envision.  Innovation and collaboration networks will be providing the platforms that HR can “piggyback” on.  As those networks roll out, we’ll see clear paths that we can use to improve the opportunities to learn through a network, create great mentorship programs, and find our senior talent that really influences the rest of the employee population.
  • Performance management:  could you really see everyone tagging you (good, bad, collaborator, mentor, effective, productive, fell asleep in meeting)?  The first issue is one of transparency.  People have to be willing to tag and have that tag be traceable back to them.  Second, people might have a major bias to rating you based on their personal like or dislike of you.  At the end of the day, can we figure out how to build a community and use web 2.0 in an innovative way to create better performance management?
  • Succession planning:  On linked in today, you have people writing positive reviews of your work (hopefully).  When we’re identifying succession candidates, wouldn’t real world experiences that each of us have built over time with our employment networks be the most critical to deciding if we’ll be effective leaders in the future?  These measure not only our experience and successes, but our potential.  Instead, we have rigidly structured succession planning processes that identify successors based on their current roles in the organization and the evaluation of one or several contributors to the succession plan.  Not a complete picture by any means.  I could totally envision how ongoing, constantly open networks (feeding into a secured system) would be a major enhancement to the current system.

Web 2.0 is here.  It’s coming soon to an HR vendor near you over the next few years.  The form it will be in is unknown to me, but putting more power in the hands of the community to convey information and knowledge can only be a good thing.

Innovation Software and HR

Do I ever get sick of being the only one who talks about innovation and preaching that HR should be involved?  Sometimes I feel like I’ve spent the last 6 months spewing on about collaboration and innovation and how HR should be part of the lead for figuring how that stuff works.  After all, it’s about how the WORKFORCE comes together and interacts to create product.  Yes, that’s all the businesses’ responsibility, but we can’t really ignore it, can we?

Well, turns out that I’m not the only one who’s been thinking this.  Thomas Otter wrote back in April about a beautiful tool that SAP is using to help their employees understand innovation and how the collaboration networks can be utilized.  Some nice commentary is included from users at SAP.

Do I realistically think that HR can participate in this discussion?  And why do I think that?  Yes, and I think that because we have other core data that makes it possible.  If we’re identifying competencies and expertise, our data in HR should be part of the algorithm that eventually calculates if someone is a go to person for particular topics.  It’s not the only part of the equation simply because some of our really smart people just don’t have the capability to collaborate to the level that other people do.  These are growth opportunities, and as we understand who our high potential collaborators are, we can help mold them in the right direction so that they are better go to experts.  (the total system of technology I envision may not actually exist yet today).

Similarly, we are here to develop a more productive workforce.  While it might be someone else’s responsibility to lead the development of product and production, the fact that HR touches every facet of the business can’t be ignored.  This is one of those things where if we have a “seat at the table” we should participate in the conversation.  Otherwise, we should give up our seat to someone who will participate.

Real Lesson From Despair.com: Get To Work

You aren’t being paid to believe in the power of your dreams. ((Despair.com))

Somewhere I needed to write one of these despair.com pieces and disagree with the message. Sometimes, we are paid to believe in the power of our dreams. I’ll take myself as an example. If you read enough of systematicHR.com, you’ll have noticed that much of what I write would be considered visionary. I certainly believe that utopia can coexist peacefully with a healthy dose of reality mixed in. The true business environment that we operate in today demands that we all dream and strive for this perfection in whatever it is that we do. It is this drive that allows us to innovate, create and improve on the current state of our work.

While realizing that not all of our dreams can be implemented, and that some of them are really quite un-sensible, the power of the dream is critical to business and leadership.