Joe Ales & Jason West are joined this week by Rachel Kay, Emma Lucas, and Craig McCoy

Season 2: Episode 17 – The Future of Work: Building Capability to Thrive in a Digital World Part 2

Jason West: Welcome to the Underscore Transformation podcast. My name is Jason West.

 Joe Ales: And my name is Joe Ales.

JW: And together we’re the founders of Underscore. This is the fourth episode in our bonus miniseries on the future of work and the pandemic. Last week we were joined by three special guests, Rachel Kay, Learning Director at Capita, Emma Lucas, Head of Talent and Development at Marks and Spencer, and Craig McCoy, Group Director and Chair of the London HR Connection.

We left them last week considering the skills and capabilities that organisations need to develop to be successful in a digital post-COVID world. We also talked about some of the promises that digital transformation brings to the learning and development function and the gaps that some of our guests have exposed between technology vendors, strategic vision, and the operational reality on the ground. If you’ve not listened to last week’s episode, I’d highly recommend listening to that one first before taking a listen to this week’s episode. So, what can we expect this week Joe?

Joe Ales: We’re asking, how has digital transformation and the pandemic changed the skills the HR functions need to be successful? Where are the gaps between business demand for these skills and HR’s ability to respond? We also look into the function’s role in the response to the pandemic and some practical tips for HR professionals seeking to grow their careers in the digital world. We ended last week’s episode with Emma considering the reality of multigenerational workforces, and the challenge this places on designing systems, and learning and development interventions that work across diverse populations in the business. So, we’re picking up this week’s conversation where we left off. So over to you, Jason.

Jason West: Ok, so we’ve talked about the broader impact on demand for these sorts of business analysis, engineering, solution design, programme management and data analysis and decision support sort of skills and competencies. But as we look more internally to the HR function, is the demand for those sorts of skills and competencies the same or has the demand being different within HR? Or is it increased in certain areas? So probably Craig and Emma, it’s probably more a question for you, I’d guess, being kind of HR professionals working within organisations. What’s been your perspective?

Craig McCoy: Yeah, so there’s a couple of things from my point of view. One is that as a direct result of COVID-19, a lot of businesses are having to diversify and reinvent themselves as they move into different propositions, different products, different business models completely. And they need a lot of help from the HR function to do that. So I think it’s got significant implications for leadership of the organisations across the across every sector, really, which will emphasise attributes like creativity and innovation, commercial ability, things like business turnaround, businesses significantly affected and change management. I think the HR function has a real challenge to respond by evidencing those skillsets and also developing people within the organisation to be capable in surviving in that environment. There are still too many HR people and people generally who are very steady state and that don’t they don’t think sufficiently commercially. They don’t think about the direction the business is going in. They live in something of an ivory tower and just do what they call “HR best practice” for its own sake. And I think that’s a real mistake. So, I think the degree of change happening within industry globally is massive at the moment. I think that’s one thing.

The other thing I wanted to touch upon was that I did actually support Sage with a study of several hundred organisations looking at HR skills and got some of the kind of results of that study in front of me, some of the major sort of skills gap that identified what we mentioned, some of them definitely people analytics. So the whole kind of data, data modeling, reporting, data analysis seen as a major skills gap in organisations of people not being very data savvy. And I think that flows into the area of financial awareness more broadly as well. Another one was around creativity and innovation is about helping businesses to pivot and diversify and to think more broadly about the direction in which the business can go, but also in terms of policy development. The most obvious example, being flexible, working where HR had to be incredibly creative about reinventing flexible working policies, but also things like absence management, sickness management, a whole host of traditional HR issues, if you like, that need to be reinvented because of the pandemic.

The third one is about technology awareness and being tech savvy. And that’s pretty obvious in terms of all functions, is HR needs to be embracing digital much more purposefully and be more comfortable with it. And the fourth one is kind of pretty obvious, really, when you think about it. It is about communication. Communication challenges have been massive during the COVID crisis, particularly with those businesses who are in the essential worker category. They’ve had to keep going, but also, of course, those people who are working from home and need to keep engaged with their business if perhaps they’ve been furloughed as well.

I think my final point is around operational awareness. It’s about HR needs to be very, very closely coupled with operational leadership and needs to fully understand what it takes to keep a business running and needs to be working hand in glove with the Operations Director or their equivalents Chief Exec in their organisation to make sure that the business continues, is viable and keeps running. And that would include all aspects of people leadership. I think moving away perhaps, maybe temporarily, from the long term strategy, but looking just looking at survival instincts and keeping the business running. And I think a lot of HR people are not sufficiently au fe with how the business actually operates day to day. So that’s been a learning curve for many functions that I’ve become aware of.

Jason West: So just in terms of the study, is it publicly available? Can we include a link in the show?

Craig McCoy: Yes, please do. It’s a very good piece of work.

Jason West: Thanks very much. Emma, what’s your view?

Emma Lucas: I think I’d echo Craig’s sentiment around the operational partnership, that’s been absolutely key throughout, at the start and continuing through COVID as well, and we’re seeing more and more of that, which is great. I think also having a slight feel on what’s going on externally, too. So, constantly sort of scanning the environment with a multitude of sort of perspectives on that, but really bringing kind of the outside in so that we as an organisation can understand what else we need to be thinking about, what else is available out there. So partnering that agility. The other skill set that I’m seeing becoming more and more important as our leaders are making some of these big shifts and transitions would be that coaching capability for our HR business partners particularly. How are they supporting their operational leaders to show up differently with colleagues to bring that level of empathy and engagement alongside the sort of use of the technology, that really means people are coming with us on the journey and being taken care of and giving our colleagues what they need from leaders and managers right now. So, that coaching capability of our partners policies is essential.

Jason West: Yeah, and when you look across your HR function in the wider HR profession, can the demand for these skills be consistently met or are there gaps? And if so, where are the most troubling ones?

Emma Lucas: I guess my view would be that there’s probably gaps I’m not sure I’ve seen HR investing enough in its own capability and particularly in some of those coaching and change skills. That’s not been my experience. But it may be Craig or Rachel have got a different view.

Craig McCoy: No, I think I would echo that I think there are in all the areas that I mentioned previously, I think there are significant gaps and I think that’s resulted in the creation of new roles within the HR function, for example, the emerging data scientist role, which along with a lot of businesses, are investing significantly in developing expertise in these areas. I know some of the banks, for example, I’m aware of year-long training programmes in data science for a HR people, which is a significant investment in individuals, but just highlights the depth of expertise which is required and the level of the gap in terms of people on the list. So, I think there are significant gaps in all of these areas, some of which are probably more trainable than others. I think there’s a lot of work to do.

Jason West: So, Rachel, turning to you, what demand have you seen from your clients and their HR functions for these sorts of skills?

Rachel Kay: I think it’s quite interesting, actually, because the HR function is probably one of the functions that we get lease requests from. And I always ask myself the question, why is that?

And often it’s because they’re spending a lot of their time preparing to develop the other functions within the organisation. And sometimes you forget to look at yourself. So, I don’t think there’s any other reason apart from that.

But one of the things that we are finding where we’re being asked to support the whole of the sort of people function and that would include the HR professionals, the L&D professionals, is working strategically with the organisation around their sense of purpose and a corporate purpose or an organisational purpose. So, certainly within our financial services clients who are really coming out to market with a sense of brand, and a sense of clear purpose about what they want to be, and a very senior level in the organisation, they are asking both HR and the L&D function to sit side by side with the rest of the organisation in supporting the objective to get out the sense of purpose for the organisation. And that really tends to link to the vision and the values that the organisation would have.

And this is a top priority for many of our customers at the moment. This is where we have been working with some of our customers to take a leaf out of the marketing book and actually think about how can they function along with their learning colleagues, create clear campaigns around the sense of purpose that the organisation wants to drive to their markets, and also the vision and the values that they want both their customers and their employees to understand, and certainly from the employee point of view to be able to demonstrate. I would say that the HR and the learning function are being more involved in that strategic thinking exercise and that then links to their skills about understanding, how do you clearly communicate those messages to the employees? And more importantly, how do you measure whether they’re actually landing, having impact and that people are adapting those competencies and those behaviours that are in line with the vision and the values?

Jason West: And Craig, have you seen something similar or is there not that much demand coming out of HR for developing these sorts of skills?

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Craig McCoy: I think the thing with HR people is that they tend to be quite reticent in asking for support because I think they have a natural tendency to feel that they’re supporting the organisation and therefore they’re reluctant to show signs of weakness. I think a  combination of that, and probably a lack of self-insight in terms of what’s really required from the HR function in these exceptionally challenging times, or else a feeling of unease that there may not be able to adjust to the requirements of the organisation is setting for them. Because if you think about COVID-19, a lot of the challenges are really fairly and squarely in the people, the people area. And therefore, your HR leader is by far an obvious choice to to really take the helm. I’ve seen many HR directors I’m aware of have been asked to take on a broader role as sort of, if you like, COVID-19 response leadership, because so many of the aspects and the responses are in the people arena.

But I think that place is the HR Director and the team, therefore, in quite an exposed position. Yes, because they need to be seen to be confident, assured, resilient. And I think, therefore, there is a natural reluctance to voice any particular development needs that they may have. And there are always exceptions, obviously. But I think that what I see generally. And it’s sort of like cobbler’s children syndrome: they’re there to advise and help people with their development needs and therefore, presumably they don’t have any. So it’s yes, it may also be an aspect to the fact that HR is still seen in many organisations as a support function, and organisations when budgets are tight or perhaps less willing to invest in the development of support functions than they would be to invest in the development of operational teams. I think that for all those reasons, I think maybe it’s a combination of those things that would lead people to be quite quiet about it.

Jason West: Yes, snd you touched on a number of our leaders taking a broader COVID response crisis response role, has that uncovered any kind of new skills or competencies that suddenly is needed to develop over and above the previous demand that it had?

Craig McCoy: Yeah, I think it’s probably in the leadership and its broadest sense, but also around programme management, having a structure, having strong communication capability. And it is a bit self-fulfilling as well, because although many of our leaders have been chosen to fulfil such roles, quite a few have been passed over for the opportunity because maybe the Chief Exec would prefer to give that kind of responsibility to a much more line operational leader, for example, is more used to dealing with the day to day. I think it’s quite interesting to ask yourself the question, if you’re an HR Director, “have I been asked to take on a broader responsibility.” If it’s yes, great, and recognising the fact that you could broaden and step up into that area? If not, maybe there’s a question to be asked about why not? And maybe the HR function is not seen as being operationally critical, is still seen as somewhat removed from the operation. In many ways, it’s a bit of a litmus test, I would say, in terms of how connected the HR team is into the business and whether the connection is very visible to the rest of the organisation and recognised by the organisation and obviously by the Chief Executive in particular. So, I think it’s a bit of a testing ground. And I think it’s a time for a bit of self-reflection in terms of what’s coming at you as a result of as the COVID-19 crisis.

Jason West: Yeah. You really would expect that a CEO would turn to their HR Director to lead the response to the pandemic. So, I guess you’d have to be asking yourself some questions if you haven’t been asked.

Emma, on a more operational note and thinking about some of the operational challenges that you faced at Marks and Spencer, have you also seen a change in the demand for certain skills as a result of the pandemic?

Emma Lucas: Yeah, I mean, I think we sort of touched on it a little bit earlier, but it’s sort of that agility, the kind of policy making real time, adapting very quickly with the operation. That’s certainly been something I think we’ve done particularly well. I’m quite proud of from our perspective. And then, I think we touched on as well, that this data gathering, data management, data science sort of skill sets are really kind of using data to help us make decisions quite quickly for the organisation. Those would be the two I’d probably call out.

Jason West: So, Rachel, turning to you, what sort of training or development have your customers been looking for as they’ve been grappling with the pandemic?

Rachel Kay: Yeah, I think for us it’s in the leadership field mainly. I think it’s around resilience. I think it’s around how, as a leader, can I continue to lead in what are, let’s face it, really challenging circumstances. I think with our customers at the moment, there are a number of challenges that our HR and L&D colleagues are facing and economic turbulence is just going to be one of those. We’re going to have to now steer organisations through some really tricky financial positions, potentially over the next, you know, one to two years. And from a people point of view, how are we going to support our employees through that journey? So, the cross-selling, the upskilling, the reskilling that we think about, we talked about before are going to be key. And how do you do that at pace? So one of the big skills that we’re working with is around agile. And how can we ensure that workforces can act in an agile way, not only just from their processes point of view, but actually from a mindset point of view. And that growth mindset is a skill that many of our customers are asking us to talk to them about, in terms of how we can support them in deploying that type of behaviour.

Jason West: As we start to emerge into something of a recovery phase, what’s over the horizon for organisations that are looking to prepare their people for a post pandemic world?

Rachel Kay: I think we’ve got to think that they offer opportunity, not just a bleak outlook. Out of the pandemic there is going to be opportunity. Organisations will be given the opportunity to reinvent themselves, to bring new products to market and new services. So, I think there has to be a real sense of optimism. Yes, we need to deal with, the shifting patterns of work and living and how people are going to operate. Yes, we’ve got the acceleration and impact that technology will bring, and linking to what I’ve referred to before about that corporate sense of purpose and how organisations are positioning themselves in the market. And that’s a really exciting time.

But we’ve got to dig deep because it’s been a difficult six months. We’re not out of the woods yet, quite clearly with the pandemic. But I think one of the most positive things that’s come out of the pandemic and we certainly see this within Capita, is teams’ opportunity. And they’ve taken it really positively to actually work collaboratively. And I always think that if we had got some of our teams to work collaboratively the way that they’ve naturally just flowed into that way of working over the last six months, if we had planned that, it would have taken four project managers, it would have been a six month rollout programme. And we probably by Christmas, just about thinking, have we got there? And isn’t it amazing how human nature has actually adapted really quickly? So that for me, is why we need to think positively about the future.

Jason West: Thanks, Rachel. Emma, if we can focus in on learning and development functions, what does the future hold?

Emma Lucas: I think the point we were kind of covering off and sort of that personalised learning journey; using technology a lot more and really taking people on their own kind of personalised learning journey based on the skills they need today, the careers they want for the future, to be able to customize that. And as Rachel said, delivering content just in time in the flow of work as supporting it with really great line managers, great line managers who are there to sort of coach you, who says we’ve become more reliant on technology, the role of the line and the role of HR around that technology and those interventions becomes more and more important.

Jason West: Yeah, no doubt, really great managers are going to be essential for any organisation that’s emerging from this crisis. Craig, what’s your view?

Craig McCoy: Yeah, so I think crisis management, crisis leadership, operational sustainability, understanding the requirements of running a day to day business, these are all these are all really key and have become much, much more prominent in the priority list for leaders in general. And HR I don’t really differentiate. The word “resilience” has been used frequently, that that’s definitely going to be a key requirement. You need to be resilient against anything that the business or the country or the globe can throw at you. I think that’s going to be one. I think the technical skills, being digitally savvy, I think that’s going to be important for everyone.

And one that’s also come to the fore, which you already mentioned yet, is around performance management. I think the ability to judge and assess performance in a meaningful way based on outpost versus inputs. I think that discipline is going to be there for everyone. But also, there’s a very human aspect of managers placing more trust in their employees. And as you get less eye to eye visibility of employees, as they work more flexibly, do you really trust them to do what they need to do in their own time flexibly, to manage their own hours? So many, perhaps more traditional leaders this is going to be a real testing point as to whether or not they can actually adjust to leading in a more trusting way.

And I think that also implies more empathy with employees. I suppose for many years, the old command and control culture has been eroded. It’s a more progressive trust, a empathetic relationship with your team. I think in the days of COVID-19, of flexible working, that has really come to the fore as build stronger relationships in many cases between line managers and their people who work for them. They get to know more about as individuals, more about their family circumstances, more about, perhaps, their health. So I think that empathetic leadership is a really significant shift, I would say, because you need to you need to be empathetic with all of the crises that people are dealing with in their home life as well as their work life. A lot of what I’m saying is really around leadership and management, which I think is such a hugely important thing in these days.

Jason West: To wrap up, if you were to advise an up and coming HR professional seeking to grow their career, what are the top three skills or competencies that they should seek to develop? So turning to you, Emma, what’s your view?

Emma Lucas: I’m going to cheat a little bit, and merge some. But I think there’s this change in project management absolutely essential. Then there’s a piece around business acumen or commercial acumen and then the external angle on that. And then finally, I would talk about coaching and talent development. So, bringing those line leaders on with their skills, but also harvesting sort of talent inside your organisation.

Jason West: Fantastic. Thank you.

Emma Lucas: That six really. [LAUGHS].

Jason West: That’s definitely six. But, you know, we’ll let it slide, right. Rachel, what’s your view?

Rachel Kay: For me, it’s about that commercial acumen; understanding how your business operates and what are the clear outcomes that, from a people point of view, you need to support the business in terms of delivering. What are the signs of success? What are the measures? So that whole commercial space around the impact that HR function would be key. The second thing for me is around analytics, being able to look at information and establish priorities of where you might need to focus your time, and also to identify potentially where you might need to partner. Because I think it’s really important that we don’t think that we can all solve all the problems all the time. So, having an eye on the marketplace and what whether it’s technology or some behavioural science to support you. Having a view of the marketplace to me is going to be really key. And then the other one that we mustn’t forget with our colleagues is about leadership. So the organisation will look to the HR function to lead them through difficult times, whether it’s advising on an approach or keeping us in line from a compliance point of view. They’re also going to be looking for clear guidance around behaviours and vision and a sense of purpose and how the organisation needs to operate and what success looks like from a people point of view. I think it’s really important that they are demonstrating their own great leadership skills as well as coaching it in others.

Jason West: Thanks, Rachel. And finally, Craig, your view on the same question.

Craig McCoy: Yeah. For me, I agree with a number of the points that Rachel’s just made. The one which I really draw out is about continuous learning and education. I think the impact of things like process automation, machine learning, A.I., these are all going to really reduce down the number of transactional roles and also I think the community needs to focus on their expertise is knowledge workers. And I think they’ll be about continuous learning and investing in their own development, but also about the softer skills around influencing and interpersonal skills to really make the best use of that learning and that knowledge that they’re acquiring. I think to me, that’s a big one. The second one, I deliberately definitely agree with change management transformation. I think those are skills which are always going to be extremely useful and obviously combining with leadership as well. And the third one, which I think is probably the biggest gap, as I see it, is financial understanding. I think if people are really to influence at the leadership level, they need to make a strong commercial impact. And I think a lot of people lack the nuts and bolts of financial understanding to be able to assist their organisations in any meaningful way and to increase their credibility. So for me, those would be the top ones.

Jason West: Thanks very much for that, Craig. And I think on the subject of continuous learning, that’s a great place to end today’s discussion. My thanks to our guests, Emma Lucas from Marks and Spencer, Rachel from Capita and Craig McCoy, HR Director and Chair of the London HR Connection. Thanks for your time today, everyone. Great conversation.

All: Thank you.

Jason West: We’re going to continue our focus on the HR function for just a little while longer. We’ve talked about the imperative for HR to develop digital transformation and crisis management capability over the past few weeks. Next week, we’re focusing on buying in capability from the market. So how readily available are these skills from the market? Where can you find them? When should you buy instead of build? And what do you need to have in the front of your mind as you select from big, shiny consultancies all the way through to a one-man band contractors and hiring permanent staff?

Joe Ales: If you found today’s episode useful, please feel free to share this episode with your colleagues across your network. And if you’re feeling really generous, we’d be delighted if you could give us a five-star rating wherever you’re listening to this podcast.

For more practical advice and guidance on business transformation, change in crisis management, please subscribe to this podcast and check out our back catalogue. You may actually find the answer to a problem you’re grappling with today. Thanks very much for listening.