Hacking HR to Build an Adaptability Advantage
Hack:
Enabling crowdsourcing as a lever to strategic adaptability
Strategy crowdsourcing, when conducted successfully, can be used to lever strategic adaptability in powerful way. However, success requires new capabilities, revised mindsets and a new participatory culture.
We propose HR to guide organizations in the quest for crowd engagement, and outline how HR could support and even drive the change in culture, mindset and capabilities in a framework of crowdsourcing.
As Wim Elfrink, Chief Globalization Officer at Cisco said, the future is about a “new type of corporate brain… which collaborates and co-creates,”* internally and externally. This vision of the future is driven by the shift in demographics—workers and customers are younger, cultural diverse and tech savvy. They expect their opinions to be heard and their opinions and decisions are shaped by a multitude of networks and social media.
When it comes to formulating a competitive business strategy, however, incorporating employee and customer perspectives typically is an archaic and slow process, relying on surveys, consultant interpretation, and internal biases, added to “gut feel” of the loudest person in any boardroom. Internal and external information used to shape strategy is often obsolete before the strategy process is complete.
In the age of social media and co-creation, traditional direction setting processes are facing both internal and external obstacles. Internally, the cognitive power of the organization is easily wasted. Externally, customer feedback is “real time,” and, when negative, can render even the most theoretically perfect strategy a public failure.
Organizations are by nature hesitant to open internal processes to the external world and there are numerous reasons, including legal and competitive concerns. Inviting employee and customer input on strategic issues raises these issues immediately. And executives in charge of the strategic process may be unfamiliar with the new social territory.
The new global demographic is emerging and companies should start to engage crowds – internal and external – to their strategy process. Forerunners are already doing this successfully.
Entering a new dialogue internally and externally calls for new processes, but focusing exclusively on them may lead to failures. Capabilities, mindsets and norms need to be developed as well. HR should be actively engaged here to support businesses.
Fundamental reasons for HR to take an active role in developing capabilities and culture for crowd sourcing are evident:
- The emerging use of social media and crowdsourcing is a disruptive change. That is, like the Quality/TQM, Outsourcing/Supply Chain Management, and Internet Marketing/Distribution models, crowdsourcing disrupts existing business models and implies major organizational change.
- HR has always played a critical role in guiding the business and executives through such changes, even though HR may not "own" or initiate the change. HR has been the first to understand the implications for organizational structures and for employees and the culture, and undertake tasks to facilitate the transition (e.g. training, engaging employees, etc. Indeed, HR played a significant role in alerting organization to Workforce 2020 issues and revamping processes to attract/retain the next generation workforce.
- The role of HR in Socialization of Strategy through crowdsourcing and other social media events is the same. First, to alert and educate the organization to the trend. Second, to support champions of the idea and help them succeed. Third, to help executives rethink the structures, processes and culture required to succeed. And finally, to identify and acquire the right talent.
Target groups for strategy crowdsourcing – the crowds – are employees and external stakeholders. External stakeholders may further be divided to at least customers and the rest of the world, depending on the business.
Despite many similarities in how to source in the various crowds, there are critical differences, especially related to the maturity of the mindset and capabilities of the company.
Employee Crowdsourcing
The objectives of employee strategy crowdsourcing are many. Increasing strategy awareness in the whole organization, enriching the strategy content and pre-testing the strategy feasibility are examples of such goals.
To get high quality results out of the crowd, a culture of strategy dialogue should be developed.
In this development HR can and should take a strong role as advisor and facilitator, with competencies to match.
The starting point is a broad understanding of the strategy on all levels of the organization. Without it, the results of crowdsourcing will most likely be marginal. Enough time and focus should be given to structured discussion. We recommend facilitated team workshops for strategy assimilation and “localization”.
Trained facilitators, preferably own employees, are a great support to line managers, allowing them to focus on the substance instead of the process. Over time, the whole process will be handled by the teams themselves.
Strategy assimilation will most likely set new requirements to the quality of the business plans on different levels of the organization. Managers do not get their subordinates’ approval for granted.
Processes are needed in employee crowdsourcing, but developing culture and capabilities, where HR should be engaged, is vital for success.
We suggest that while companies may start crowdsourcing externally in parallel with internal crowdsourcing, a certain amount of maturity of processes, culture and capabilities should be secured before entering large-scale external crowdsourcing.
Customer Crowdsourcing
As with other examples of disruptive market changes leading to large scale organizational change, the chances of success increase when change is initiated at the edges of organization, in places where:
- There are committed, credible, articulate teams and leaders who act as champions
- The change effort begins by focusing on a specific problem/solution where an early win is achievable.
Crowdsourcing from customers has proven successful in limited areas,—typically when a customer segment has specific technical knowledge to provide valuable feedback (Red Hat) and/or when customers are asked for feedback on a specific experience. Consequently, companies are advised to start small, testing the process, customer reactions and implications.
This is good news considering the maturity issues of the company. The piloting teams most likely are the ones best equipped to initiate the dialogue with the customers. This leaves time to develop the rest of the organization to a good level of capabilities for a broader customer crowdsourcing.
Now, how broad do we need to be in customer crowdsourcing? Could we manage with just a couple of those capable pioneer teams of ours? Obviously, in most businesses just a fraction of customers really need to be engaged, but given our aim for strategic adaptability, all teams and individuals should over time be competent to participate in customer crowdsourcing.
Crowdsourcing the World
Going beyond customers in crowdsourcing is both exciting and demanding, but crowdsourcing the world is truly unpredictable.
One of the biggest differences to employee and customer crowdsourcing is in the mindset. Listening and learning, in essence becoming part of the crowd, is different from buying, extracting and analyzing data.
Is becoming a part of the crowd approved by your policies and your people?
You should find the trailblazers, enthusiasts and even hobbyists to connect with, but do you have competencies and wisdom to bridge their thinking to your strategy process?
You are getting into a territory where your competent resources are scarce and hard to clone. You might have succession plans regarding such people, but it might be useful to get prepared to increase the amount of such individuals.
Relation building skills are becoming more and more important. This is an area to develop in the current staff and to weigh carefully in recruitment.
Strategy crowdsourcing can generate a wealth of benefits, when conducted competently and with perseverance:
- Better strategy alignment in the whole organization due to improved understanding about strategy
- Participation in the strategy process will improve the commitment to execute
- Business insight and quality of business plans on all levels will improve as a result of the dialogue and quality feedback
- Improved engagement of a new generation of employees whose values are more attuned to open dialogue.
- A new way to engage with customers and beyond, whether or not the process achieves a “return on the investment.”
- A vehicle for bringing excitement back into strategy.
- Generator of new competitive ideas that would otherwise be overlooked.
In addition to benefits, large scale crowd sourcing will affect companies in other ways, too:
- Crowdsourcing disrupts organizational design. You'll need fewer of some resources and more of others, and you need more resources to build and develop relations. It's going to be about execution, and it’s your own people, not consultants.
- You can't go back. If you take the leap into large scale crowdsourcing, perseverance is a must. Crowds will react strongly if you back out after having engaged them.
Ensuring right resources, capabilities and a culture of openness in a rapidly shifting organization is a new requirement and a new opportunity to HR. New foresight should be developed in tight cooperation with businesses.
Mindset is the main challenge:
- Hack your Mindset: You can’t predict the results. But then again, if you could, you wouldn’t really have business challenges. Give space for ideas to collide.
- Follow through, don’t drop the crowd when you got what you wanted.
- Get authentic. Your crowds are.
- Un-own Results. Being part of the crowd means being part of the crowd.
Mindset is about culture, beliefs and values. HR should take a role in facilitating the dialogue to accelerate the cultural change.
Strategy is both a planning process and a risk management process. Therefore, the challenges to an open strategy process must be seriously weighed. To mention a few:
- Executive ownership of formal innovation and strategy processes and executive reluctance to open a process to customers which has legal and financial risk implications.
- Competitive intellectual property issues
- Lack of understanding of social sourcing technology and whether it can be used in company’s best interest.
- Need to rethink emerging global buyer demographics.
- Readiness of specific customer segments to engage in this way.
The overall challenge for HR in developing the capabilities, culture and norms is in the role as business advisor. Credibility is not given, it has to be earned, and it is not enough that VP HR is competent and accepted by his colleagues. The whole HR organization must engage with their business partners and develop competencies to meet the new demand.
Employee Crowdsourcing
- Organize a feedback process for strategy and business plans by engaging teams to assess the credibility of management thinking (the plans) and the implementation of the plans. Facilitate the meetings to get solid input.
- Train people for peer evaluation of the plans and set up a practice for peer reviews. Assistance might be appropriate to open up and get constructive instead of just nodding their heads.
- Arrange a method for gathering and evaluating strategy initiatives.
Run pilots in a manageable selection of teams to get a feeling of the maturity of the staff and to tune your process. At this stage you don’t need to invest much into systems.
Based on the pilot observations you can plan the further training (most likely you need it) and systematize the process for wider implementation. Depending on the size of your organization, handling of the input will soon become a burden if the process is manual.
Capabilities are an essential part of crowd sourcing, and you should also take care of connecting the crowdsourcing with your capabilities and competencies. Your benchmark jobs and competency models might deserve a revision. Most companies have not developed their systems for participation.
The role of HR is most prominent in employee crowdsourcing. The foundation for success is laid here, and HR should engage actively to enable success outside of the company.
Customer Crowdsourcing
Start by testing the concept of crowd sourcing strategic content with customers by:
Forming a team of advocates. Even the most staid organizations will have thought leaders and experimenters in this area. Ideally this team is cross functional, including technology, marketing, sales, legal and financial members.
The charter for the team is to:
- “Decode” the strategy into areas where customer input could lead to a better competitive position. (This assumes that employees are engaged in the strategic process!)
- Design 2-3 pilots for crowd-sourcing and how success will be measured.
- Agree on the tactics for socializing and implementing the pilots within the company.
- Go forth and sell the pilots!
Leverage modern technology. Quality of output is often determined by enjoyability and ease-of-use in input. Modern, sleek technology should be used to attract customers to participate. Additionally, software is needed to sort through the gobs of information to hone in on key conclusions.
Customer crowdsourcing is owned by the businesses, but HR should follow the progress closely to act on time to support development.
Crowdsourcing the World
Start with the listening, and learn what it takes. If your company has never tapped the crowd, start small. The crowd knows when it is helping and it truly expects something in return. You may easily fail if you aren't ready--philosophically and resource wise. You will probably need fewer resources in the end, but of the most intense type.
You will manage more data than ever before as the crows performs the task of the worker bee. If you've never had 1,000 employees, imagine having 1,000,000 part time volunteers. These volunteers expect to be nurtured, not tossed away at your convenience.
Systems to assimilate data are crucial, and you should be prepared to distill input to any function of the company, including responsibilities of HR. While even here, as in customer crowdsourcing, the ownership is within the businesses, HR should pay special attention to competency development and resources- both in terms of allocation and effectiveness.
- Source: Transitioning to Workforce 2020, Cisco Public Information, 2011.
Hi Eerik! I really like this hack and the idea of bringing an internal/external community into strategy development is one that I saw the power of while at Red Hat. My current company implements an approach like the one you recommend with many of our customers today.
Based on my experiences, one challenge that I've seen come up over and over is that when people from within the company are brought into the strategy process, there is an unwritten contract that is often broken. We ask for feedback, but it is often not clear what is being done with the feedback, or--even worse--the feedback is ignored. One of the keys to keeping people engaged in the strategy process is keeping a continuous open dialog, showing examples of where feedback and ideas are being taken/used and highlighting the people/places from within the organization where the ideas came from.
If people who've been asked to participate in the strategy process don't see any of their input in the end result, it can end up being a negative cultural event.
Nice work on the hack!
Hi Chris, thank you for the thoughts.
I too have experienced the open feedback is key in handling the input from the crowds. Now I notice we haven't stressed this point clearly enough in the hack. We still have time to fix this. Thank you!
Hi Chris, thank you for the thoughts.
I too have experienced the open feedback is key in handling the input from the crowds. Now I notice we haven't stressed this point clearly enough in the hack. We still have time to fix this. Thank you!
Eerik, Love your teams hack. Its key to engage the new generation of employees and customers who vales are often different from other generations. As Dan Pink advises in his book "to Sell is Human" it’s no longer caveat emptor but caveat venditor!
First, employees, consumers, shareholders, and other stakeholders are holding companies to higher and higher standards.
Second, there’s a growing movement of socially conscious citizens, especially younger people, who are deeply concerned that too many people are still living in unacceptable social and economic conditions.
Third, easier access to information and the ability to share information quickly means that inappropriate behaviour can’t be hidden for long.
Richard Branson and Jochen Zeitz reveal The B Team Leaders and kick-start a Plan B for business.I have been facilitating several "B Team Kick Offs" and it clearer that socially is changing and are expecting more form organisations. The B team are avocation people, planet must sit along site profit on the bottom line.
I also noticed this report a few days ago from Deloitte.com
Culture of Purpose: Deloitte.com Take a look at companies whose success is perennial. They sustain themselves by generating significant, positive impact for everyone their operations touch. They are keenly aware of the purpose they fulfil for stakeholder, and other groups – and they integrate goals to serve those groups into their business’ core activities. Therefore, establishing a culture of purpose is important to a company’s entire stakeholder universe. http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Document...!
Fiona, thank you for the thoughts. Sharing purpose with stakeholders is becoming more and more important, and it's a challenge for many managament teams, our mind is so hooked on strategic secrets. The Deloitte report was interesting reading, thank you for sharing it with us.
Eerik, I think socialist is soon in for a major shift in consciousness. Interesting how GMO foods are being rejected my Russia , China, Italy, and in India 5 Million Farmers Sue Monsanto for $7.7 Billion. Further lawsuits will begin to take effect. After it was ousted in January that Monsanto was running illegal ‘slave-like’ working rings, more individuals became aware of just how seriously Monsanto seems to disregard their workers — so why would they care for the health of their consumers? As of a few days ago, Monsanto got so frustrated with its continuing failed attempts that the company has given up on getting their GM crops into Europe. If companies do not produce goods that match with the consumers vales these products will simply not be bought.
The world is changing faster than ever before in history who knows what surprises are around the corner one thing for sure if companies fail to change they will find them selves obsolete. Add this to the not so secrets deals that are going on around the world re currency and gold,i.e Neil Kennan and the Global Collateral Accounts . Ben Fulford ex Forbes magazine and his activities more its like a James Bond movie or fairy-tail!
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