4. Human Resources
Our last core leadership department and set of foresight functions involve the human capital of the firm. Historically, HR’s ability to contribute foresight and value to the firm has gone unrecognized by some execution-, sales- or strategy-focused top executives, to the detriment of those companies. Too many leaders following outdated paradigms still don’t appreciate the unique competitive advantage that comes from finding and using better methods of recruiting, hiring, compensation, benefits, performance management, learning and development, idea generation and creating a company culture with better values, including a foresight orientation.
A new generation of HR leaders are using insights from behavioral economics, nudging theory, industrial psychology and people analytics to do data-guided experiments, find and reward top managers and employees, and allow employee freedoms and self-leadership in their work much more than in previous eras. Read Waber’s People Analytics (2013), Pentland’s Social Physics (2014), and Thaler and Sunstein’s Nudge (2009), for more on the frontier of modern HR. The first People Analytics Conference convened in 2014 at the Wharton School of Business at the University of Pennsylvania. There is much to learn from these newer methods, and the data for their effectiveness is growing.
In Performance Management, an open book approach to bottom-up, employee-driven development of financial and operations plans, responsibilities, and benefits is outlined in The Great Game of Business (2013), as mentioned earlier. Schemes for conversion of a company to a greater percentage of employee ownership as the original founders retire is another bottom-up HR trend revitalizing a few mature-stage companies (see NCEO). Other foresight- and innovation-promoting HR methods include crowdsourced recruitment (JobHuk), 360 degree and crowdsourced reviews, performance benchmarking, and Ten and Twenty Percent Time, where employees meeting expectations given the freedom to work on projects outside their job description for a half to a full day out of five. Pioneers in the latter include 3M, Hewlett-Packard, and Google. Google’s Gmail is a famously useful product that came out of that level of employee freedom because a small group of engineers thought it was a more important product to be developing than the current product mix on offer. Providing this free time to any employee who is meeting expectations, and then rewarding successfully innovative employees can be a powerful motivator of job performance.
HR leaders can drive company culture to a foresighted vision and mission. Ann Rhoades, Built on Values (2011) and Jon Katzenbach, Stop Blaming Your Culture (PDF), Strategy+Business (2011), describe how large organizations like the US Marine Corps, Aetna, JetBlue, Southwest Airlines, and P.F. Chang’s China Bistro have done culture turnarounds, returning to core values and restoring foresight after it was long absent.
Learning & Development (L&D) may be the HR function where foresight process and values can be most aggressively championed. Peter Senge’s The Fifth Discipline (2006), its Fieldbook (1994), and his work since offers a motivating vision of the learning organization. A few firms, most famously Procter & Gamble, have executed this model well. In a world of accelerating technological and business change, empowering employees to do continual just-in-time learning, and to apply that learning in new innovation and strategic foresight, improving strategies, plan, or actions, can give a critical advantage to your firm.
Idea Generation (Ideation), is another human capital related function that is benefiting from exciting new tools for generating collective foresight from large groups of an organization’s employees, customers, and stakeholders. Employee idea collection platforms (see BrightIdea, Datastation, CogniStreamer, Hype, IdeaScale, Imaginatik, and SpigitEngage), technical problem solving communities (InnoCentive), and employee engagement and feedback platforms (TeamPulse, Suggestion Ox) are now niche industries, selling their ideation products to HR leaders in all kinds of businesses. Prediction markets, which elicit forecasts and feedback on the potential outcomes of company ventures and relevant events, are another new area for collective foresight. But innovation and ideation platforms are much more commercially successful and apparently useful than prediction markets at present
With respect to hiring, every generation has its own unique traits, and the Millennials (Gen Y), (born between 1983 and the early 2000s) are no exception. Among the traits that have been proposed for this demographic, at least in the US, include a stronger desire to do rather than be told something, a desire for social and environmental justice, a sense of entitlement and need for praise, low interest in politics and global affairs, and an expectation of rapid job change. With regard to the latter, a McKinsey Global Institute study, Disruptive Technologies, 2013, proposes knowledge work automation will continue to be a major job turnover force between now and 2025.
In the context of our Global Financial Crisis of 2008 and Great Recession (2008-2012), our current generation of young workers is suffering today from a bit of a disconnect between their desire for wealth and recognition, a deficit of technical skills relative to demand, and the rapid turnover and lack of good jobs to match their skills in marketplace. But given that global technical productivity, and thus corporate profits and economic growth all look strong for the longer term, as various authors including Toffler in Revolutionary Wealth (2007), Diamandis in Abundance (2012), and Brynjolfsson and McAffee in The Second Machine Age (2014) persuasively argue, the top challenges for modern HR leaders include better global recruitment strategies and more valuable just-in-time education for employees. Today’s best employees must be increasingly lifelong learners, comfortable with change, and able to work well with colleagues around the world, in both emerging and developed nations.
To recap, the Human Resources department commonly has responsibility for three of our top twenty foresight functions: Performance Management, all the ways managers incentivize, track, and motivate better employee performance; Learning & Development, activities to train, educate, and develop employee-leaders; and Idea Generation (Ideation) a creative process of generating, developing, critiquing, and communicating new ideas and strategies of potential use to the organization.