I’m going to be honest and say the traditional service delivery model that many HR deparments still work to should now be regarded as an old and tired model.
In fact, it’s akin to how many IT departments still work – by addressing tickets that come in, and dealing with them in a ‘there’s a problem to fix, so then fix it’ sort of way.
But while this may have worked in the pre-internet and pre-AI era, given the substantial evolution in organizational dynamics and the shifting expectations of both internal and external stakeholders, it’s clear we’re now transitioning to a new paradigm.
Now I would say that in the strongest-performing organizations, HR has completely transcended this traditional service-delivery model. But…and this is the big but, these companies are still very much a rarity.
I know this because my team at The Josh Bersin Company recently completed the biggest-ever HR study, analyzing how top-performing organizations are navigating the modern challenges facing them.
Those challenges include adapting and restructuring around AI and hybrid work models to responding to the evolving business landscape that we now find ourselves in.
We found that just 7% of companies have any sort of professional development for HR, and only 4% have a defined AI strategy in place, highlighting a significant gap in preparing HR professionals for the challenges of tomorrow and leveraging emerging technologies effectively.
So what needs to change?
Outside of understanding what organizations are not doing, we also learned what the top-performing organizations are doing.
We’re calling this the emergence of “Systemic HR,” – a groundbreaking conceptual model that promises to reshape the HR landscape and drive organizational success in new ways. And currently, it’s being pioneered by leading companies like Mastercard, LEGO, IBM, SAP, and Unilever.
The concept of Systemic HR is intricate and multifaceted, encompassing 18 dimensions and six key elements.
At its essence however, it entails the integration of formerly isolated HR areas – such as HR operations, HR technology, L&D, talent acquisition, total rewards, and HR business partners – into a cohesive and unified framework; one which enabes HR to enhance its capabilities and influence across the organization.
It’s “systemic,” because HR is operating as an integrated system, rather than a set of disconnected parts.
Systemic HR also entails reimagining HR organizational structures to be flatter, more agile, and leaner.
At the same tme though, it also includes the introduction of new roles that were never part of HR before – roles like a product manager role, an innovation lead role, an experience owner role. These are new titles that are not part of the traditional HR vocabulary and skill set.
A huge part of all this is a reflection of the changing nature of the HR Business Partner (HRBP) role.
HRBPs, now senior members of the leadership team, play a crucial consulting role in all major aspects of management and talent strategy. This integration highlights that HR strategies must no longer be viewed in isolation but rather as integral components of the broader business strategy.
But our research shows that companies that embrace and implement all these Systemic changes are far more likely to achieve remarkable outcomes compared to their counterparts.
Specifically, they have a twelve-fold greater chance of attaining high workforce productivity, a seven-fold higher likelihood of adapting to change seamlessly, a six-fold increase in the probability of fostering effective innovation, and a nine-fold greater potential for engaging and retaining their workforce successfully.
Organizations lacking Systemic HR often find themselves entangled in a messy web of disconnected strategies that yield minimal results.
HRBPs can bring all of this together from the top-down, linking the people strategy to the business strategy, prioritizing the most important aspects of it, and supporting change and transformation throughout.
While the HRBP role itself isn’t new, its increasing prevalence and up-skilling is.
Today, HRBPs are catalysts for change, providing leadership coaching, and actively shaping key organizational elements at top-performing companies.
Lego offers a compelling example of Systemic HR in action, particularly in its innovative approach to re-imagining the role of the HR business partner.
By intricately aligning their business and HR strategies, Lego demonstrates how a Systemic approach can drive organizational success.
Lego’s strategic shift towards digitization went beyond traditional toy manufacturing, encompassing online play and community support.
This necessitated a comprehensive digital transformation across various business functions, including marketing, sales, and operations.
Recognizing the critical role of Systemic HR, Lego strategically assigned and trained HRBPs for each business unit.
Its overarching objective was to unify these disparate arms of the business and effectively manage talent through a significant transformational phase.
The cornerstone of Systemic HR lies in crafting coherent HR and business strategies that are intrinsically linked, with each reinforcing the other.
A really strong example of this comes from healthcare company NewYork-Presbyterian.
Confronted with the imperative to enhance patient experience, expand their network, and digitize operations, it recognized the need for a corresponding HR strategy.
NewYork-Presbyterian’s HR strategy was meticulously crafted to align with its overarching business objectives.
This involved prioritizing talent acquisition, particularly in critical clinical areas, to bolster their workforce.
Additionally, it focused on up-skilling their staff in technology and AI to meet the demands of a digitized healthcare landscape.
Moreover, it undertook a strategic redesign of their care teams to enhance the overall patient experience.
The key is understanding what works with your business, your goals, and your people.
It’s about knowing where there are overlaps and how best can strategies be designed with the other elements in mind?
As CHROs, you’ll need your HRBPs to support and advise on these strategies.
Their daily activities should revolve around aligning with these strategies, supported by suitable technology.
This technology should facilitate seamless identification of development needs, mentorship connections, coaching opportunities, and issue resolution – all integrated into their workflow for maximum efficiency and impact.
It won’t be easy. Embodying Systemic HR presents a formidable challenge, as evidenced by the fact that only 11% of organizations have achieved the optimum level of Systemic HR maturity.
However, the benefits are substantial, and remember this – your top competitors have already embarked on this journey. If you don’t get on board now, you’ll only be losing competitive advantage.
To read the full Systemic HR report – click here:
