A blog by Joel Barolsky of Barolsky Advisors

6 strategic shifts and implications for HR

In Articles, Commentary on 8 November 2017 at 4:22 pm

By Joel Barolsky and Sue-Ella Prodonovich

If you have HR responsibilities in a professional services firm then you’re working in the epicentre of turbulent times. Changes to our workforce population, participation and productivity are throwing up new challenges while the expectations of firm owners and employees are changing – but not necessarily in sync.

Here are six strategic shifts we’ve observed which we believe will have profound implications for HR.

#1 Shift to the rocket model 

The next five years will see a migration away from the pyramid model towards the rocket model. A typical pyramid structure has a partner at the top supported by one or two senior associates and four or five juniors. In the rocket model, most juniors are substituted by a combination of technology and para-professionals.

For HR this means

  • Partners need a new set of skills and knowledge to manage their rockets and to win and deliver projects, profitably
  • Improvement in digital literacy across the board.
  • The end of the apprenticeship model that involves training juniors on-the-job on low-level process work.
  • New recruitment markets, processes and criteria to include non-technical areas.
  • Measurement and reward systems that reflect non-time-based pricing, innovation and collaboration.
  • Managing a much more diverse culture of professionals, para-professionals, technologists and project managers,

#2 Shift to workforce accordions

Most firms currently operate with a defined cohort of full-time staff. With growing variations in client demand, there is a growing trend towards the accordion model. This model means having a blend of full-time staff plus a pool of pre-selected trained variable cost contractors. Corrs’ Orbit, Minters’ Flex, Pinsent Masons’ Vario, Allen & Overy’s Peerpoint are firm-based accordions. LOD (Lawyers on Demand), LexVoco, Crowd & CoBespoke are examples of specialist providers in this space.

Other variants of the accordion include flexible work arrangements, hot-desking, secondments, reverse secondments and sabbaticals. Maddocks recently reports that over 20% of its partners were working outside the ‘normal’ 8 to 6, five days a week model.

HR complexity increases exponentially as a firm increases the variability and flexibility of its workforce.

#3 Shift to smart collaboration

With the increased competition from in-house providers, boutiques and individual freelancers, most multi-service firms are recognising that their main competitive advantage lies in the collective. If firms continue to be just a collegiate group of individual practitioners, then they will lose share to other competitors with lower costs and/or better-perceived quality.

Four-Seasons-Orlando-Coffee-Latte-Art-Barista-Bootcamp

Source: uspinjaca.hr

While economic geographers have identified the positive relationship between physical co-location of knowledge workers and firm performance, HR plays the critical part of bringing capable people together. It’s through true cross-practice collaboration that the firm can offer something that others can’t. Bringing a diverse set of expertise and experiences to solve clients’ toughest problems is more profitable, more fun and more valuable to the client. It’s also a lot harder to do.

#4 Shift to supportive intolerance

There is ample evidence that better leadership leads to better performance. Firms with a depth of leadership capacity across all its partners are in a much better position to handle market uncertainties than those with just one or two stars.

Developing leaders doesn’t just happen through a wish and a prayer. It requires a particular style of operating, first coined by David Maister, called ‘supportive intolerance’. The support bit is offering partners personal insight/reflection, coaching and training to help them develop their full leadership potential.

The intolerance bit is making them accountable for their actions and inaction. This means calling-out behaviours inconsistent with firm values, providing constructive, prompt and honest feedback, having full transparency around agreed actions, and if all else fails, reducing reward as a sanction.

HR should be the lead change agent in introducing this style of leadership and operations. Again, it’s really hard without formal authority, but it’s critical to the firm’s long-term sustainability.

#5 Shift to loving the problem (not the solution)

While we try to do more with less and stay up with game-changing ideas, many HR professionals are still expected to solve day to day problems so it’s easy – and tempting – to go into problem-solving mode.  Boudreau and Rice’s caution for HR professionals:  “Embrace too many ideas (from popular talks and articles) or apply them too superficially and you’ll develop a reputation for fad surfing. Dig beneath the surface to the fundamental scientific research and insights and you can set the stage for true impact.” So one thing HR can do to add more value is ‘fall in love with the problem’ – that way you’ll look forward to spending more time on understanding them more deeply.

#6 Shift to ambidexterity

One can think about firm strategy as two parallel streams: one being ‘exploit’ and the other ‘explore’ (based on the work of O’Reilly and Tushman). Exploit refers to efforts to leverage current strengths and capabilities to make the current core business as good as it can be. Explore refers to new exploratory and experimentation efforts that will hopefully bear fruit in the future.

Firms need to become more ambidextrous, that is, change the firm’s culture so that everyone embraces explore and exploit in his or her everyday work and client interactions.

In an environment of rapid change and hyper-competition, every firm needs a healthy portfolio of both exploit and explore initiatives. A genuine commitment to exploring will most likely mean substantial changes to the firm’s dividend policy and capital structure. Firm governance and structural arrangements are also likely to be impacted, as will marketing, pricing, IT, operations and, in particular, HR.

Join us in Melbourne November 21 or Sydney November 22

HRMinds have asked Joel Barolsky and Sue-Ella Prodonovich to help finish their year of seminars with a discussion of major trends and practical ideas for those with an HR remit. These November workshops will be in Melbourne on Tuesday Nov 21 and Sydney Wednesday Nov 22. Details and registration here.

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