Twice this past week I’ve been asked the question how to design an HR function for a smallish (500 people) organization, with plans to grow quickly in both their current market and new but related markets. As their business develops the number of employees will grow. They’re both looking for a design process that is simple, involving, quick and results in an HR function that can shape and guide their organization’s growth but not by growing the HR function in line with this. (That function has to stay small).
My first thoughts on this are that with a small team the approach is less about ‘a re-design’ as a one-off, and more about asking a series of questions that lead to continuous action (at a manageable and involving level) that keep the design constantly refreshing in an unobtrusive way. My image is one of diverting a river not by obvious intervention of dykes and dams, but by shaping the natural landscape a bit so that the rainfall over time changes the path naturally, or by enabling natural flood defences rather than constructing them.
At this stage, three questions that this thought on continuous design poses for me are:
- How much do we want the design process and the design outcome to be a ‘test and learn’ for developing our design process and thinking for use with other parts of the organization in the coming months as the organization grows?
- How should we determine what HR activity needs to be done and then determine how to do it in a way that delivers on our organisational strategy, aligns with our wider organisational design (itself under review) and meets requirements and expectations of our – HR and the organization’s – various stakeholders?
- How much do we want our design work and outcomes to reflect the new ways of working that are emerging in most aspects of HR (and organizations as a whole e.g. automated, data driven, networked)? For start-ups and smaller, newer organizations this could be easier than for well-established, larger organizations that have a legacy of process, system and practice.
Thoughts on Q1 (test and learn design): Paradoxically, just asking these questions is part of the design process. As Edgar Schein says in his talk on humble consulting, ‘the [old consulting] notion of having a diagnostic period followed by intervention is absolutely not the way this process works at all. It works with the recognition that the very first response I make to a client on the phone or over lunch or whatever is already an intervention’ .
In many organizations – regardless of size – it’s not easy to get across the idea that conversations and informal interactions without blueprints and models are just as shaping of designs as conversations about any formal design blueprints and models presented. Read Managing Change as Shifting Conversations if you are interested in this topic or look at Chris Rodgers’ blog Mastery, Mystery, and Muddling Through.
Thoughts on Q2 (HR activity): There’s a useful list of HR activity produced by the Corporate Executive Board that starts to frame a discussion around what HR functions need to do and where to focus their energy. I’m not sure how many HR functions could tell someone which of the activities they do produces most organizational value. It’s worth working this out and asking whether low value work can be done differently, elsewhere more cheaply/effectively, or not at all. Related to ‘what activity’ is the idea that the ‘right’ activity for an HR function depends on numerous factors. Look at A New Strategic HR Model and HR Operating Model: A new blueprint for HR for some ideas on this.
Thoughts on Q3 (new ways of working): A smaller, newer organization may well be at an advantage in not being hidebound by a tradition of what HR does. But they may not be. It is hard for people to be bold thinkers or flout the conventions of the profession in which they are trained. One way of being self-challenging is not to look for benchmarks, best practice, and examples of what ‘others like us’ are doing. But to look at examples of what ‘others not like us’ are doing to meet the challenges of offering a professional service from a small base of staff working in new ways enabled by data, automation, and collaboration. Corporate Rebels has some good case studies and Culturevist is a good source of info too.
What are your thoughts on the 3 questions related to the continuous re-design of a small HR function? Let me know.
Naomi Stanford 
Think there is also a wider organisational culture issue to at play and what relationships need to be constructed/de-constructed ie is it one where the whole organisation feels they are part of the HR capability or is it one where “people” issues are dealt with over there in HR. This links into Q1 but if the culture is about recruiting and retaining the best, creating the environment for people to develop and grow, working with tools and colleagues that are seen as inspiring is very different to where the culture is profit is key, transactional delivery, short turn around in roles and people. In short what people aspire there organisation to be is often very different to how they behave and this ultimately is what will determine the HR capability requirements
I like the challenge of designing an organisation or operating model for a small department in a fast changing organisation. Let me offer my approach and then see how much it overlaps with Naomi’s.
First thing I would do is clarify the strategy/purpose of this department and get a sense of how stable this is likely to be. Of course it may exist already, but typically this involves talking to the stakeholder (as Naomi suggests), finding out what they want HR to do for them, then figuring out what activities are most likely to make a significant difference to this organisation over the next year or so (Naomi also suggests).
I would then define the work steps (i.e. process) needed to deliver each of my chosen list of activities: one for helping with recruitment, one for helping with disciplinary and exit work, one for helping with people development, one for giving organisation development help, etc. Of course, some of these will change as the team learns short cuts or changes its focus. But clarity about the starting point makes changes easier (Naomi also suggests test and learn approach).
I would then start to think about how to deliver these work steps. Which steps should be done by the small HR team, which by the stakeholder HR is helping, which by suppliers, etc. By this stage I would then have a pretty good idea of the design of my HR team. But I would lay out these different processes in a “value chain map” to check that my organisation plan is sensible.
Then I would start to think about IT support to the HR team. I might also think about location (does the team all need to be in one place?). Then I would think about any tricky supplier relationships that will need to be designed. Finally I would work through a management calendar for the team (what sort of meetings and how often) as well as a scorecard (how will the team know if it is succeeding?)
So there is a good deal of overlap with Naomi’s questions – but also some differences …. and maybe a bit more focus on the work that will need to be done.