high-impact hr operating model: in brief...become obsolete or the needs get more reﬁned becomes...

High-Impact HR Operating Model:In Brief

Overview

If HR is to help foster the organizational adaptability to keep up with digitaldisruption, exponential change, and unpredictable environments, it must also

look in the mirror and embrace and manifest that quality. This requires replacingtraditional, inflexible HR operating models with new approaches that continuouslyincorporate emerging technologies, networked and cross-functional teams, newcapabilities, and a full range of agile practices.

This article describes the limitations of the conventional HR operating model andsummarizes several of the principles that leaders can follow in designing a moreadaptable operating model that can better serve their organizations.

In This ArticleWhy adaptability is the basis for the new HR operating modelaSelect principles for designing an effective and adaptive HR operating modela

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RESEARCH ARTICLE

Jeff Mike, HR Research LeaderBersin, Deloitte Consulting LLP

Denise Moulton, Vice President, HR & Talent ResearchBersin, Deloitte Consulting LLP

Copyright © 2019 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material.

High-Impact HR Operating Model: In Brief

What Leaders Need to KnowThe ability to continuously adapt—to fast-shifting market demands andmyriad disruptions—has risen to the top of the list of organizationalpriorities. Because form must follow function, adaptable organizationdesigns have likewise become a top priority for executives.1

This adaptability imperative extends to HR as well. Bersin’s High-ImpactHR study in 20172 and its High-Impact HR Operating Model study in 20193

found that high-performing HR functions are continuously adapting torespond to ongoing change and maintain alignment with the organizationsthat they serve. And like those organizations, those studies also found thatthe ability of HR to continuously adapt must be built into its operatingmodel.

Unfortunately, most HR operating models are still dominated by rigid,hierarchical structures that constrain collaboration and how work gets

Source: Bersin, Deloitte Consulting LLP, 2019.

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done. Instead of form following function, their form dictates their function—limiting, rather than engendering, adaptability.

HR needs a new operating model—one that enables it to continuouslyscan and sense the internal and external environments of the largerorganization (through quantitative and qualitative data collection andanalysis) and incorporates a strong capacity for response (through cross-functional teams that can assemble around new opportunities andproblems as they arise). This new model will still deliver scalable services,such as benefits administration or payroll, that demand consistency,compliance, and efficiency while keeping pace with change in terms ofstrategy and talent.

The Journey to an Effective and Adaptable HROperating ModelNo single operating model design will be right for every organization’s HRfunction; however, our High-Impact HR Operating Model researchidentified a set of principles for creating an effective and adaptive HRoperating model that may be applied regardless of context. In addition toa strong focus on adaptability, three more principles follow.

Governance determines performance more thanstructure.Structure is an important element of any operating model. It is needed tomanage systems and maintain order and scalability in dynamicenvironments. But structure is not the only element. In fact, our researchindicates that structure, per se, is not a differentiating factor in HRperformance.

A complete operating model must broadly describe how people andtechnology will organize and interact to drive business outcomes. That’swhy designers of adaptable HR operating models should pay particularlyclose attention to governance. Governance is defined as “a system bywhich an organization makes and implements decisions in pursuit of itsobjectives.”4 Governance shifts the focus from structure to the interactionsthat create value for the organization. Our research found a high level ofdifferentiation in HR performance based on governance-related questions.

Pioneering HR leadership drives innovation andshapes the future of work.HR operating model transformations require leaders to bring a whole newmindset to their roles and to the teams they lead.5 They won’t be able tomerely copy best practices or follow the benchmarks set by otherorganizations. Instead, a pioneering mindset is needed to drive innovationand create new ways of working in both HR and throughout the enterprise.

A pioneering HR leadership mindset starts with envisioning an operatingmodel that takes full advantage of digital technologies and the practicesrequired to exploit them. It also requires continuous and effective

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communication. Our High-Impact HR Operating Model research identifieseffective communication from HR leadership as one of the mostprominent predictors of performance.

An adaptable HR operating model is built on a robusttechnology platform.As the technological ecosystem available to HR evolves and expands, theability to adopt new technologies and replace existing technologies as theybecome obsolete or the needs get more refined becomes ever moreimportant. High-performing HR functions create this technical capacity byincorporating a platform architecture into their operating model designs.

A platform technology strategy supports the automation andaugmentation of HR roles and work, freeing human capacity for higher-value interactions. A platform enables the integration of an array oftechnologies that can drive productivity and create a compelling workforceexperience.6 It also allows for the more efficient testing and adoption ofnew technologies—such as robotic process automation, chatbots, andmachine learning—and their many applications.

Looking AheadAn adaptable HR operating model provides the foundation on which agility,automation, productivity, and innovation can grow and thrive. It enablesHR to sense and respond to continuous change in the enterprise and theenvironment. And it allows HR leaders to play a more instrumental role indesigning the future of the enterprise, the workforce, and work itself.

Source: Bersin, Deloitte Consulting LLP, 2019.

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Key TakeawaysAHigh-performing HR functions are continuously adapting to•respond to ongoing change and maintain alignment with theorganizations that they serve.HR needs a new operating model that enables it to•continuously scan and sense the internal and externalenvironments and engender a strong, agile capacity forresponse.The designers of adaptable HR operating models pay•particularly close attention to governance, which shifts thefocus from structure to the interactions that create value forthe organization.A pioneering leadership mindset is needed to drive•innovation and create new ways of working in both HR andthroughout the enterprise.Building a platform-based technology strategy into the•operating model supports the automation and augmentationof HR roles and work, and it frees HR staff for higher-valueinteractions.

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EndnotesGlobal Human Capital Trends 2016: The new organization—Different by design, Deloitte Consulting LLP and Deloitte University Press, 2016.1.High-Impact HR research, Bersin, Deloitte Consulting LLP, 2017.2.High-Impact HR Operating Model research, Bersin, Deloitte Consulting LLP, 2019.3.“ISO 26000 definition of governance,” International Organization for Standardization, 2010, www.iso.org.4.Ecosystems, Platforms, and HR: Mindsets for Becoming Digital, Bersin, Deloitte Consulting LLP / Jeff Mike, EdD, and Madhura Chakrabarti,5.PhD, 2019.What’s a Unified Engagement Platform?, Deloitte Consulting LLP / Arthur Mazor, Jeff Mike, EdD, and Michael Stephan, 2019. 6.

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http://www2.deloitte.com/content/dam/Deloitte/global/Documents/HumanCapital/gx-dup-global-human-capital-trends-2016.pdf

http://www.iso.org

https://digital.bersin.com/article/ecosystems-platforms-and-hr-mindsets-for-becoming-digital-645/

https://capitalhblog.deloitte.com/2019/04/05/whats-a-unified-engagement-platform/

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Publication Date: December 17, 2019