Redefining HR, Transforming People Teams to Drive Business Performance by Lars Schmidt
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HR expert Lars Schmidt says his profession needs a paradigm shift. He argues for an employee-first approach – one grounded in empathy and psychological safety. While Schmidt’s vision is not new, he does make a compelling, vital and refreshing case for building a humanistic company culture grounded in learning and coaching – while at the same time not shying away from using advanced people analytics and AI to achieve your organizational goals.
Take-Aways
- Companies that don’t put people first are cracking.
- Possess a deep knowledge of your company – and the industrial, sociopolitical and economic trends that guide it.
- Use data to improve decision-making.
- Develop business expertise to win the confidence of your company’s CEO and other executives.
- Underscore employee wellness by building a culture of inclusion and belonging.
- Treat your employees like adults: Grant freedom about when and where to work and offer meaningful rewards.
- Get the basics right: competitive pay and top-notch recruiting.
- Invest generously in employee career development.
- Engage in regular coaching and performance conversations.
Redefining HR Book Summary
Companies that don’t put people first are cracking.
Nearly every economic, financial, political and business challenge companies face is currently about people. The COVID-19 pandemic made it clear: Companies that refuse to put their employees first will suffer the most. In response, modern HR must attune to people and organizational needs more than ever, while stepping away from a compliance-driven, transactional mind-set.
“We need to shift our focus to understanding the potential of humans: what makes us human; how to get the most from the human experience at work.”
To make this transformation, HR leaders must develop a broad and deep knowledge of not only the myriad facets of their own field – diversity and inclusion, analytics, performance reviews, compensation, coaching, employee development, and more – but the wider business and societal trends that shape it.
Possess a deep knowledge of your company – and the industrial, sociopolitical and economic trends that guide it.
Today’s forward-thinking HR leaders – Chief People Officers (CPO) or Chief Human Resources Officers (CHRO) – understand the business, industry and sociopolitical trends that shape them. They partner with business leaders to push their agenda forward more effectively. They study, curate and implement modern workforce practices tailored to their organization, including evidence-based decision-making using talent analytics and cutting-edge technologies. They bring out the best in people through a culture of care, wellness, support, empowerment, diversity, inclusion, coaching, continuous learning and enterprise-wide cohesion.
CPOs and their teams partner with the CEO, board, other executives, line leaders and managers to set the environment and conditions for a powerful talent culture. This enables frontline managers to spend time on essential coaching, feedback and recognition – activities that unlock the talent and potential of everyone in the organization. CPOs don’t ignore compliance and risk, but focus mainly on building enterprise-wide trust to reduce the frictions that slow firms down.
Use data to improve decision-making.
Advanced HR teams use sophisticated statistical analysis and machine learning to predict the outcomes of decisions and initiatives.
“There are few components more fundamental to modern HR than analytics.”
Many HR teams embrace dashboards to improve decision-making and models to aid strategic workforce planning. As the sophistication of people analytics increases, firms gain the ability to forecast talent requirements and improve diversity initiatives. These capabilities drive increased profit.
Develop business expertise to win the confidence of your company’s CEO and other executives.
CPOs and their teams need business acumen. CPOs must understand profit and loss statements, customer preferences, revenue streams and product development.
HR must develop business expertise to earn the trust and confidence of the board, the CEO and line managers. CPOs must develop expertise in an array of areas: diversity, equity and inclusion (DEI); talent and technology; performance management; learning; workforce planning; and more. Of course, no one person knows all of HR, let alone the entire scope of any business. This means CPOs need strong networks, coaches, mentors, modern HR teams and frontline managers. CPOs, CEOs and other leaders must partner effectively.
Today’s CPOs often come from strategy, marketing or operations. New CPOs don’t necessarily need previous experience in HR if they dive in and learn by tapping into the wealth of open-source information available. Online materials abound on topics ranging from best practices and principles, to case studies, courses, videos and online networks.
Before launching activities or initiatives, new CPOs should meet with their CEOs, peer executives, board members, frontline managers and employees to hear what matters to them, their priorities and what HR can do to help. These conversations build vital relationships and trust while helping CPOs develop the credibility, support and partnerships they require to leverage talent.
“Modern HR practitioners are vital partners to the business. They combine data, research and experience to help teams think through their most complex talent challenges. They’re respected, requested and needed.”
After their listening tour and a check-in with the CEO and senior leaders, new CPOs can plan initiatives drawing on their business savvy and experience. These perspectives often bring new and valuable insights.
Underscore employee wellness by building a culture of inclusion and belonging.
CPOs should set a climate for transparency and vulnerability by underscoring the importance of mental health. Vulnerability should be viewed as a strength, not a weakness. This demands courage and empathy, but no company can claim a commitment to employee wellness until people feel safe to discuss their stresses and worries openly. Wellness requires inclusion and belonging.
Diversity flows naturally from proactive and non-discriminatory hiring practices driven by leadership that understands the business advantages of a representative workforce. Inclusion follows where CPOs and other leaders educate everyone in the truths concerning systemic racism and white privilege, and help each employee, manager and leader identify their known and hidden biases that can lead to acts of microaggression or exclusion.
“We’ve come a long way in employment protections, but we still have a long way to go in creating equal and equitable opportunity.”
In most firms, DEI efforts have made little progress. CPOs in small firms and start-ups should take on the role of Chief Diversity Officer (CDO). In larger organizations, CPOs build a better organization by bringing in an experienced CDO. The talent analytics group can leverage demographic and workplace data to reveal insights into inequities and opportunities for improvement. This requires a public commitment to change and requires openness to sharing DEI data – including pay, promotion and diversity in senior positions. CPOs must eliminate biases from hiring, celebrate ethnic holidays, offer training where appropriate, and check the culture itself for systemic biases. This means integrating DEI into every aspect of the business.
Conscientious CPOs understand their unconscious biases. They know they might inadvertently shape a culture, for example, according to their experiences and background, which forces others to fake cultural buy-in. CPOs, CEOs and the rest of leadership can deliberately set the conditions for a workplace that invites everyone to bring their entire selves to the job. This uncompromising climate of psychological safety and belonging unleashes creativity, divergent ideas and hidden talent; it helps people engage and thrive.
“Sometimes you have to know when to throw your badge across the table and walk out the door to stand up for what’s right.”
Effective CPOs advocate for DEI, including diversity in the most senior ranks of the organization. If the firm refuses to fulfill its moral obligations – if it sacrifices DEI progress for financial expediency, for example – the CPO should resign. Any effective partnership with the CEO evaporates at that point.
Treat your employees like adults: Grant freedom about when and where to work and offer meaningful rewards.
Avoid heavy HR policies and rules in favor of broad principles. At Netflix, for example, CPO Patty McCord worked with founder Reed Hastings early on to create its famous “culture code.” Netflix treats employees like adults, giving them the freedom to decide when and where they work and how much vacation they should take.
“The people have the power. All we have to do is awaken the power in the people. ” (John Lennon)
Resist telling employees they can’t use social media at work. Don’t impose sweeping, reactionary rules when one person does something wrong. Grant people trust and savor the energy and loyalty you inspire.
Surrender power by embedding people leadership into every division of the firm. Emphasize the importance of HR partnerships with line leaders and managers. Offer meaningful rewards. Rather than foozball and free food, provide exceptional health coverage, including mental health, wellness programs and family leave. Extend the widest work flexibility possible. If you offer unique perks, connect them to your values. At Patagonia, for example, the company pays the bail of employees arrested during protests.
Get the basics right: competitive pay and top-notch recruiting.
Make pay fair and equitable for everyone – so even your least skilled employees don’t need two or three jobs to get by. Part of living up to the reputation of a modern, caring firm means finding the resources to pay people well. Pay demonstrates care or communicates indifference. If you don’t get pay right, little else matters.
“Let’s be real – compensation is often one of the top drivers of employee satisfaction.”
Invest in recruitment, too. CPOs in start-ups especially will focus primarily on recruiting. They invest in talent acquisition that will sustain the firm as it grows. They put in place a people strategy that will help the firm scale effectively, even during hypergrowth. Laying this foundation early in a start-up’s growth pays dividends down the road.
As a start-up grows, its culture invariably adapts and evolves, but values should remain constant. These might include trust, transparency and collaboration, for example. If so, recruit, recognize, promote and reward these values.
Recruit ethically and open-mindedly. Work in partnership with hiring managers to guide their decisions. Apply new recruiting technologies, including AI. These practices and tools help you reach more candidates with more personalized messages, and ensures your hiring process treats candidates with respect.
“The foundation that you lay in your earliest stage around culture and talent is really, really hard to undo if it’s bad.”
Develop a strong employer brand and compelling, honest communications about the firm and its jobs. Review and, where necessary, revamp your hiring process from the candidate’s perspective. Measure your progress by determining success metrics and canvassing interviewees, candidates and new hires about their experience. Collect and analyze recruiting data; make adjustments to improve the process continually.
Invest generously in employee career development.
Everyone knows that tenure with organizations now lasts years rather than decades, and that skills go stale quickly. Employees look for opportunities to develop new skills and knowledge. They want to cross and climb the lattice of opportunities available in their organization, and they may leave if you deny them that chance.
Make full-time and temporary assignments available to employees through an internal job board. Encourage employees to take on assignments in other divisions and departments to broaden their knowledge and skills.
Engage in regular coaching and performance conversations.
Empower frontline managers to spend sufficient time with their teams, including regular one-on-one time with team members to talk about performance, learning and development, and career goals. Don’t conduct crucial performance conversations once-per-year. Regular coaching and performance conversations lead to better outcomes for individuals and firms. Regular feedback and recognition from frontline managers and peers builds a culture of appreciation and higher performance.
Train and equip frontline leaders with the tools, skills and mind-set they need to inspire and coach their growing numbers of virtual workers. Talent today demands flexibility, whether to work from home, in the office or elsewhere. With most of today’s work and value emanating from small groups, goals and rewards should shift, in part, from individuals to teams.
“Culture is a thousand things, a thousand times. It’s living the core values when you hire; when you write an email; when you are working on a project; when you are walking in the hall. ” (Brian Chesky)
Use your culture to attract a diverse range of worthy, collaborative and caring people whose personal values align with your corporate values.
About the Author
Lars Schmidt is the co-founder of HR Open Source, a nonprofit that aims to democratize access to modern HR practices. He has also worked in HR and other roles at National Public Radio (NPR).
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