By Bob Giacometti
Traditionally, the role of Personnel, as Human Resources (HR) was once known, centered more on administrative and support activities such as hiring and transferring, maintaining employee records, and administering appraisal, compensation, benefits, equal opportunity, and other employee relations programs. While important, many HR teams still operate outside of the strategic planning process and business operations.
As more products became commoditized, shrinking profit margins, many companies such as Avnet, Dell, DuPont, EMC2, HP, IBM, Johnson & Johnson, Motorola, Oracle, Siemens, Xerox and others, began offering fee-based services and client solutions for growth and higher profits. Working with these and other clients, The INSIGHT Group developed unique perspectives on the cultural, organizational, and business process changes required for success in services – along with a more active role for HR – a role integrated with the strategic and operational fabric of the services business. This blog post shares highlights from The INSIGHT Group’s White Paper that explores this new strategic partner role for HR.
The Organizational Imperative for Change
The Traditional Organization is hierarchical with centralized planning, decision making, and resource allocation reserved mainly for the top echelons.
Primarily tops-down and permission based, these organizations can be inflexible and slow to make needed decisions and changes with little incentive for risk taking and collaboration. However, today’s global economy requires faster responses to rapid shifts in technology, competitive markets, customer needs, and spending patterns.
The evolving Services Organization is flatter and more agile – closer to the customer and able to adapt more quickly to shifts in technology, markets, and customer needs.
Expert teams are formed based on skills such as consultative selling, industry, technology, systems, products knowledge, etc., and deployed rapidly to client locations to sell, customize, develop, and deliver services and solutions designed to solve customer problems and improve business.
The organization molds and adapts to guide and support these teams through “end of engagement” and also their reformation to chase and deliver new opportunities. Competency and Practice units develop services offerings as well as solutions development and delivery methodologies to meet customer needs. Core business/functional teams provide common strategic business planning, marketing, business development, systems/tools, finance, HR, and other operational support for the expert teams.
In a Services Organization, talented people are the product, and maintaining customer-valued expertise is critical to continued success.
Rather than an expense, their work is client-facing and “billable” as they generate revenue and profit for the firm, and more importantly for the future, they drive customer satisfaction.
This new organizational structure dictates a new, more active role for HR, the role of a valued services strategic partner rather than an administrator. The challenge is to “continually” develop, implement, and manage relevant, collaborative, and services-complementary HR strategies and processes. Each needs to be linked to strategic business planning cycles and fully integrated with the services opportunity and resource management processes, and supported by robust skills and professional career development programs.
So What’s Changing … Just about Everything!
More than just organizational change, it is a broad transformation of values, culture, strategy, and business processes. Within this organizational transformation, the shift of people from expense to “revenue generators” has an enormous impact on how people in the organization are deployed and especially in how they are managed, as shown in the table below.
In the Services Organization there is less internal focus on individuals and products and increased focus on external customer needs and the multiplicity of skills, collaborative leadership, and multiple roles required of all employees and managers to meet evolving customer needs. As a result, the more egalitarian “one size fits all” HR processes are no longer able to effectively address the variety of working scenarios found in services – where expertise, teaming, speed, mobility, autonomy, and remote management all demand more flexible approaches.
HR is evolving rapidly to provide more strategic, flexible, and tailored approaches to address the changes shown above resulting from the unique challenges of the service business. By better understanding these new business models and their challenges, HR is better positioned to participate and influence strategy development, business planning, and the tactical execution of services strategies and plans.
This evolution provides an exciting array of strategic partnering opportunities for HR. Through first-hand experience assisting over 50 clients, we have found that by strengthening and aligning six key areas – HR strategy, recruiting and talent management practices, performance management tools, compensation and incentive plans, staff transition and integration processes, and the collaborative leadership capabilities of your services management team – HR can help your organization more fully utilize the talents of your people working collaboratively to solve client problems … and to achieve success in services sooner!
For more information on the topic and to learn about these Six Keys for HR Success from The INSIGHT Group, read the White Paper available here: www.insight-group.com
Bob Giacometti has extensive “hands on” HR leadership experience designing and implementing new HR strategies and programs for highly successful services companies. Bob was the HR Executive Leader for the startup of IBM Global Services, among other key leadership roles during a 32 year IBM career. He was also the Vice President of the National Action Council for Minorities in Engineering for 3 years, and Vice President for Human and Financial Resources at the Rockefeller Foundation for 6 years. Bob leads the HR and Talent Management Practice for The INSIGHT Group.
About The INSIGHT Group … Creating Client Value The INSIGHT Group is a CSL member company. It is a management consulting firm specializing in the development and implementation of profitable high-growth services business strategies and plans – an increasingly important part of the overall business solution mix. For further information visit www.insight-group.com.
Note: All content within this website is the property of Center for Services Leadership. Any use of materials, except for social media sharing, without the prior written consent of Center for Services Leadership is strictly prohibited.
0 responses to “Human Resources: Strategic Partner for Services”
Mr. Giacometti draws light on a very valid issue for Service Organizations which want to advance into value oriented services or services related to the customer’s business rather to their “own” products. HR like also IT departments tend to prefer their “traditional” internal clients like R&D, Production or Manufacturing and Sales with help and assigned ressources. Therefore I found in my work with service organizations that they need to build “own” competence to get their transformation under way rather than waiting until central and support functions like HR or IT have understood what service and solution business requires from them. That burdens certainly the bottom line of service business units when they need to invest their own resources to get forward. So they need more an more to act as service entrepreneurs and business leaders rather than excellent technicians which keep customers satisfied and their installed base up and running.
You make excellent points, Wilhelm. We always suggest that services business units, especially those that are part of product companies, establish dedicated HR strategic partner networks early on in their development, for the reasons you suggest. In our experience, it usually takes longer for centralized support groups to understand the more dynamic “customer driven” skilled resource allocation model (e.g. continuous skills assessment, acquisition, deployment to opportunities, and “customer valued” skills development) unique to services professionals, as outlined in the paper.