April 28, 2009
Master of Debate
Text Marjatta Pietilä • Photos Arto Wiikari, Tommi Tuomi and Piia Arnould
This article is also featured in HSE Executive Education PROFILE magazine (1/2009).
Mr. Ben Nothnagel who is featured in this article will be award the HSE Executive Education Best Faculty of the Year 2009 in May 2009. He will be teaching the module ‘Negotiations and Conflict Resolutions’ on October 03 – 04, 2009.
The role of HR is growing in the future, but in which direction? People in the corporate field, a business consultant and a researcher give us their viewpoints. Although their outlooks differ, their objective is the same: profitable business.
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Ben Nothnagel Visiting Faculty HSE Executive Education “HR can drive the transfer of valuable skills within organizations in ways that increase operational excellence and establish important cross functional and generational know-how.” |
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Kerttu Tuomas Executive Vice President, HR KONE Corporation “One of the biggest challenges for HR is having the ability to understand business on an appropriate level, so that we can concentrate on the right things and ensure that resources meet needs.” |
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Mikael Frisk Senior Vice President, HR Fortum Corporation “There are many challenging aspects involved in HR, including managing competences and cascading strategies. A company that maintains the link from the CEO to the shop floor achieves miracles.” |
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Karen Stephenson Professor, Netform consulting company Rotterdam School of Management “If a company could measure the human assets in their entirety, including tacit knowledge, the strategic significance of HR would rise to new levels.” |
People in the field know that the main task of HR has remained much the same throughout the years. Rapid business changes, however, call for increasing agility and a grasp of the big picture.
“One of the biggest challenges facing HR is the need to understand business well enough to focus on the right matters and allocate resources according to actual needs,” says Kerttu Tuomas, Executive Vice President, HR, at KONE Corporation.
The business environment changes quickly. HR solutions must be correctly timed for them to have a favourable impact on operations at any given time.
“Another central challenge is to find the right kind of competence and to retain skilled professionals in the company.”
The best results are achieved when business management and HR work in close co-operation. They must engage in an open and ongoing dialogue and understand one another’s fields.
User-Friendly Tools
For a strategy to succeed, it must be explained to the entire organisation so that everyone understands how it will affect individual duties. This calls for good leadership and operating models.
The HR function is responsible for drawing up operating models for HR, including resource management, performance management, talent management and the development of a good work culture.
“We also ensure that the company uses professional, streamlined processes and tools for HR management,” Tuomas adds.
In line organisations, the responsibility for practical HR management lies with the superiors. This is why they must be familiar with the practices in the field.
“HR helps and supports superiors in management issues and offers them coaching and counselling. The tools created to assist superiors must be fit for the purpose and easy to use.”
Tools develop all the time, but practice has shown that instruments and processes that are too sophisticated and complex are easily left unused.
Competitive Advantage From Good Operations
According to Tuomas, competence gives companies competitive advantage while a lack of competence erodes it. HR plays an important part in maintaining competence, since it creates procedures, channels, programmes and ways to develop skills.
People stay on at a company that has good HR policies and management, offers work that is felt to be worthwhile and rewarding that is reasonable, provides development opportunities that meet expectations and gives sufficient feedback. Weak HR management reflects on the corporate image.
Stories about unsatisfactory working conditions, unfair treatment or poorly handled recruiting processes spread easily.
Strategic Partnership Should Be Self-Evident
In Tuomas’ opinion, talks about strategic partnership between HR and management are old-fashioned. If the role of HR is purely administrative, discussions will not do much to improve the situation. What is needed is action. Deep partnership comes about from harmonised activities and solutions that are made jointly by HR and management, support objectives and benefit all parties.
Challenge From The Dissemination & Transfer Of Information
“The main task for HR in the next five years is to facilitate information sharing and transfer in the organisation,” says Ben Nothnagel, Business Consultant at Benna Oy and a Visiting Faculty with HSE Executive Education. Morsels of information are scattered across companies and external networks. The units and functions of international companies are located far apart in geographical terms. Colleagues may never meet face-to-face. On the other hand, people seated in open-space offices may represent opposite ends of the age spectrum and have little to talk about. Nevertheless, they work in the best interests of the same company. Work would be easier and the outlook for success better if these people were to share their knowledge.
Taking The Reins & Getting Down To Work
The big post-war generations are leaving the labour market. We are beginning to be in a hurry to transfer their competence, experience and tacit knowledge to the younger, technology-oriented generation.
“For companies to prosper, HR must take the reins and begin to promote co-operation and information exchange across geographic, cultural and interfunctional boundaries and the generation gap. This will improve operational performance, boost organic growth and activate creativity,” says Nothnagel.
It is particularly important to enhance competence and information exchange between engineers and experts, since this has a direct bearing on product development and, consequently, on the growth and profitability of companies. “However, success always calls for the ability to sell visions both within the company and to stakeholders.”
Nothnagel already sees signs of companies moving from a ‘shopping’ approach to organic growth involving the development and expansion of their own operations.
Emotionally Intelligent Teams
The best way to ensure competence and information exchange and the creation of new solutions is putting together teams that straddle boundaries. The teams that perform best consist of people with high emotional intelligence, which enables them to understand diversity, be extroverted and excel in communication and networking.
“Information exchange and work involving multinational and multifunctional teams is easiest and the most cost-effective on the intranet. There is no need to make changes to the organisation or transfer people from one country to another.”
When appropriately used, the intranet enables communication and work in virtual teams, innovation between functions, as well as networking.
“The role of HR in this work is to determine the needs for cross-border co-operation and information exchange jointly with the functions involved, put together expert teams, plan the required processes and choose the people in charge. HR must also support the process to help it succeed.”
In addition, HR is responsible for making the intranet into a suitable work platform for teams. This brings a brand new dimension to HR operations.
More Strategic Significance For HR
According to Professor Karen Stephenson, nothing new has been brought to the table concerning the creation of success for companies for decades.
Stephenson works in her own Netform company and at Eramus University’s Rotterdam School of Management.
During her 30-year career in research, Stephenson has collected vast amounts of information and compiled the world’s largest database on the subject. Based on the research results, she has pioneered the use of Social Network Analysis (NetForm™ Analysis) in business. Examples of applications include measuring social capital for new performance metrics, workplace design for enhanced productivity, succession planning, knowledge succession, team building and culture change including mergers and acquisitions.
Motivating Innovators
“Social Network Analysis is a practical and easy-to-use tool that has been missing from HR’s toolbox. With simple surveys, the application can measure the human assets of a company’s entire personnel. The complete product development will be completed during the next five years.
“It should only be implemented once a year to assess the total human assets,” says Stephenson.
“One of the central reasons for assessing the human assets of personnel is to identify in the early stages innovations and innovators. These ideas and people can then be invested in, thus making sure that they stay with the company and create something new.”
When the innovators are discovered, Stephenson’s advice is to assess their motivation. Many times mistakes are made by promoting an innovator too soon, causing a separation from the network that originally motivated the innovator. This can lead to disengagement with possibly disastrous results.
According to Stephenson’s research, the power holding together networks is trust. When the people that are central to building trust in the network are recognized, they are worth keeping there. However, if there is too much parallel thinking in any network, then it devolves into “group thinking.” Overly divergent thinking is not good either, because it makes creative dialogue difficult. So, the right balance in networking must be struck and that is why social network analysis is such an important application that can guide HR leaders.
Finding Multifaceted Partnerships
For her next research topic, Stephenson has chosen to study multifaceted and multinational partnerships. In her view, a partnership between two operators is well understood, but when a third party enters the network, relationships become instantly more complicated. It is impossible to monitor all relationships in the network; thus, trust suffers and political maneuvering emerges, as the left hand is no longer aware of what the right hand is doing.
“We are so naturally networked and take our relationships for granted, when in fact there have always been many subtleties and nuances to them – especially regarding the birth and functioning of complex multifaceted partnerships. Only when we understand complex partnerships can we build lasting relationships,” says Stephenson.