HR Strategy - Looking Outside our Organizations

[00:00:00] So most of us in HR are good at handling what's right in front of us, those day-to-day challenges, and sometimes even the bigger picture, but it's still within our organization. The harder question is whether or not we're paying attention to what is coming. That is important.

[00:00:18] I'm Indra Adams and today on the HR Hub, I'm talking to Jim Utley. Jim spent 35 years in HR, working his way up to VP of HR at Tech Resources, which is one of Canada's biggest mining companies. Then he taught at SFU's Beattie School of Business and then wrote most recently a book called People Working, which I have a copy of.

[00:00:44] We can imagine in an area as volatile with as much external influences as mining that he had to think about externals. I look forward to learning about that from him. Hi, Jim. How are you? Good morning, Andre. How are you? I'm good. I'm good. Looking forward to this. So I'm going to just dive right in like I usually do.

[00:01:06] So most of us in HR are heads down, thinking about day-to-day operations, thinking about that grievance, thinking about that performance management problem, that compensation problem. But why is it so important that we also step back and think about it in the bigger picture outside of our organizations?

[00:01:28] Well, some HR people should be heads down, actually, and they should be focused on the administrative processes and tasks that they're responsible for, make sure that they're done efficiently and accurately and timely. But other HR people, particularly people in manager or leadership roles, need to take a little bit broader perspective.

[00:01:52] While they're going to be supervising these existing processes, they've got to be thinking about and on the lookout for what could be happening outside their department or outside the organization they work for that's going to affect how the organization manages its people. These external influences, if you want to use the term external, first to look would be the organization's plan.

[00:02:19] What's it trying to achieve? What's the strategic plan to achieve those goals? That will be a prime indicator of what HR has to be doing differently in order to respond to new business challenges that the leaders of the organization have identified and built into their strategic plan. But beyond that, HR people, I think, got to look beyond the boundary of the organization and look at what's happening with things like the bigger economy. That's going to affect the availability of skills.

[00:02:49] It's going to affect the cost of compensation and so on. There will also be political issues that HR people have to be aware of. And new leaders, political leaders will have different agendas. It's going to affect policy and legislation that in turn could affect, will affect human resources. And, you know, there's a lot of discussion now about technology and how technology is going to affect the HR.

[00:03:18] Not just inside HR, but the organization as a whole and all of the work processes within the organization are going to be affected by new technology. So they've got to keep an eye on their internal process to make sure those are working fine. But they also have to look more broadly. Keep an eye on what's going on in the outside world. Already, I'm actually, when I think about it, that's so big. Like, really, you know, you think about, you know, we need to keep our eye on legislation.

[00:03:48] I would say we need to keep our eye on cultural changes that are going to impact how we practice HR because those are significant. It can get overwhelming fast. How do you think and organize your thoughts? Like, do you think about this in categories? And if so, what are those categories? Yeah. Yeah. You know, some experience will help here in terms of looking through all the noise. Right.

[00:04:18] And figuring out what's important. But the traditional categories are, and you'll probably come across this in any planning process, is economic, social, political, and technological. Those are the four. And more recently, though, the effects of environment and climate change have been added to that. Economic effects are the ones I just talked about. The macro things that are going on that are going to affect compensation, benefit trends, availability of people, and so on.

[00:04:46] Social, you know, the big one in recent years has been COVID, right? That's the one that had the remarkable impact on how to manage people during the pandemic and then in the wake of the pandemic. The availability of skills. There's a worry among some business leaders that there's a mismatch between the skills that are available and the ones they need.

[00:05:10] In other words, educational institutions have not been keeping up with what business requires in terms of our whole range of skills from tradespeople through to knowledge workers, technical workers, and so on. There's also a lot of discussion now about different expectations of the current generation of employees.

[00:05:32] There's lots written recently about the so-called Gen Z and how they are viewing work in the workplace differently than older workers. The political pressures are significant right now. There's been a move in Western governments to more conservative right-wing policies.

[00:05:56] Pronounced to some degree in Canada, certainly pronounced very much in the United States. In fact, there, political pressure has really basically stopped any progress in the area of diversity and inclusion. And on the technological side, of course, the big one right now is the effect of artificial intelligence. But HR people have got to keep an eye on other technological developments too.

[00:06:23] New technology that's affecting the business itself. Particularly in businesses that involve manufacturing or processing, there's always going to be new technology that business is going to be introducing that's going to help improve the quality products. Improve efficiency and so on. And that will affect the jobs that people are doing and the kinds of training that they're going to need.

[00:06:51] On the environment side, and this one is a real worry as the world continues to warm. What are we going to be doing about people's lives? These people that come to work every day, they're going to be affected by this. Their homes are going to be too warm. How is that going to affect their health? Once they get to work, how are we going to keep these workplaces cool so that they actually perform effectively?

[00:07:21] And then, of course, more broadly, there are the safety concerns from major storms and fires. You saw that close to where you live in Fort McMurray and the fires that have threatened the facilities in and around Fort McMurray. And just a year or two ago in Jasper. And they destroyed half the town.

[00:07:44] And so these are the sort of things and categories that, you know, HR managers, HR leaders have got to keep an eye on. That is a lot. Like, I mean, fires, for example. I, you know, I don't even know what HR is supposed to do about fires. But, like, when you think about it, like, that was a long list of stuff. What? Like, how do you decide?

[00:08:14] Never mind what should we do. But how do you decide what you're going to pay attention to and what you are going to put on? Either maybe you're either going to ignore or just put on the back burner and sort of watch and see where it goes. Like, how are you making sense of all that and feeding that into the strategic planning process? Right. Well, I think the first thing HR people got to do is get out of the office, walk around, talk to people.

[00:08:44] And not just talk to, you know, other managers or people in, you know, this so-called C-suite. But people out in the front line. Uh-huh. Because they're often the ones that pick up on trends in the outside world from customers, from suppliers and so on. Oh, yeah. In the book you mentioned, Henry, I reference Henry Mintzberg and his work on business strategy. And he pointed out that it's often people at the front line of the business.

[00:09:12] In other words, front line workers who got the most strategic bit of information that the organization has. Uh-huh. The other thing HR people got to be involved in is participating in industry associations. Uh-huh. Touch there. And find out what others are determined thinking in this area. What are they detecting that's going to have an impact? Can I pause you there for a second?

[00:09:37] When you say industry associations, do you mean the business or HR? Or both? Business. Yeah. Like you mentioned the mining industry. I was quite active in the mining associations at the provincial level and at the federal level. Uh-huh. So this is a good way to keep in touch. It's a good way to network and just learn from others. Uh-huh.

[00:10:00] It's a good way to hear what they're seeing in their businesses and their parts of the country or the province. Uh-huh. Keeping in touch with these industry associations, too, not just in terms of trends and impacts, but what you're going to do about them. The Mining Association of Canada, for instance, to go back to the mining example, did a lot of work a few years ago on the source of new hires. Uh-huh.

[00:10:27] And looking at how do we get people who are currently underrepresented in the industry more involved in the industry. So it's learning what's potentially going to impact and also participating in how to manage those impacts. Uh-huh. Too many years. Uh-huh.

[00:10:56] So reputable publications are a great source of information that ultimately will affect the business that you work in and the function of HR. Right. And then, and finally, just keep an eye on your HR data. You know, all these HR organizations now have got, I would think, fairly sophisticated human resource systems. All of that's churning out information about turnover, absenteeism, accident rates, all this kind of stuff. How long it's taking you to fill jobs?

[00:11:26] All of that are indicators of what's going on in the outside world and how you're being affected by it. I actually want to get into the mechanics of how you kept track of all this stuff. Like, you're reading The Economist. I read The Economist, too. And, like, there's a million things in there. What, do you have, like, a little notebook where you're like, ooh, I've got to keep this? Or do you just let it sort of sit at the back of your brain? There it is. One of those. You actually write it down? Well, I actually write it down.

[00:11:55] I know people will put it on their phone or whatnot. I just found that difficult to deal with. You make a checklist of things. Oh, geez, there's something I should look into. That's one of your action items for this week or the week after. Put down your book so that it gets done. So, yeah, it's grinding work, but it's important work to get done to keep on top of all these issues. And over time, you were saying, you know, how do you determine what's important, what's not, what's noise, what's meaningful?

[00:12:23] That's where a little experience comes in. You know, you'll make some mistakes sometimes, you know, misreading data and so on. You'll learn from that. And you'll move on so that you can apply that new knowledge to something that's going to be coming next. Mm-hmm. I want to get into, like, tangible examples that help us learn from you on how to actually do this. So, AI, for example.

[00:12:51] It's a tool that we should use, but it's also an external force that is going to affect organizations, that is going to affect the economy. How are you processing around AI? Well, first of all, me personally, I'm not because I'm out of the game now. Okay. Imagine that you are. And I feel sorry for you folks that are in the midst of all this.

[00:13:17] You know, yes, AI is going to have a big impact, but we should see it as part of a continuing process here. Back to that HRS example, when I was working at the trail operations, we did major restructuring many years ago to basically maintain the plant. And we put a new HRS system in there. We had 10 or 15 people working in the payroll department in one of the operations.

[00:13:47] That was reduced to three as a result of technology. So, these kind of impacts have happened before. They're going to happen again in the future. So, artificial intelligence is the latest evolution of this, and it's a significant one. Don't get me wrong about that. So, if I was still in the game, I would be encouraging, well, first myself, but then people working with me, to learn as much as you can about this. And, you know, what are its capabilities and what are its shortcomings?

[00:14:15] There's a lot of discussion now that it's not all that dependable, at least, you know, the current version of it. They'll get better as they improve it. So, but it's, I think it's helping people now in their jobs and it'll help them more. But, again, it's going to evolve. It's going to continue to have an effect. But, I think the big impact for HR in this, as it has been in the past with other technological developments, is retraining. Not just in HR.

[00:14:45] You know, we're going to sometimes get beyond our little worries about our little department and think about the bigger organization. The retraining that's going to be required in organizations to use this new technology is going to be critical. One, to use it, use it effectively. But also, you've got to think about how we're going to keep people engaged and committed as this change is coming about. And particularly with all the media attention, scaring the heck out of people about this.

[00:15:09] So, retraining is very important to maintain people's confidence in their jobs and the work they do. And maintain their trust in the organization. Now, I want to think about another example of climate change. Climate change seems to have faded from, you know, general consciousness a bit. It hasn't gone away. But it has faded from consciousness. I think it'll come back.

[00:15:38] How do you, would you, if you were still in, you know, the VP role, be tracking that and the evolution of that as a force on the organization and on how HR needs to respond? Yeah. Well, as you said, it maybe has fallen out of the focus of a lot of people. But it ain't going away. No, it sure isn't.

[00:16:04] You know, as particular as there's more talk of more pipelines and refineries and so on. It's like people have just started, what? Or is it, have we solved a climate change problem? No, I don't think so. And so there's a lot of social political pressures affecting how people think about this. And so it's got pushed to the back burner to some degree.

[00:16:29] And also, I think one of the things going on on this is that the change is so potentially dramatic and so different from what we are accustomed to that people can't cope with that. And I think they're just as a result not thinking about it. But we have to, as not just HR people, but as managers and leaders generally have to think about how this is going to affect us in the future.

[00:16:55] As I said before, people's homes are going to be very difficult to live in unless they've got artificial cooling of some sort. Like, seriously, but can I just stop you there? Like, you're talking about people's homes and how that impacts how they show up to work. Really, what are we supposed to, like, are we actually supposed to do something about that in HR? Well, you know, what are you going to do? Nothing. And so all these people are coming to work.

[00:17:24] And I don't, you know, the answer, I don't know the answer to the question. The question is still outstanding, but it's going to have to get answered. Ah. And, you know, we talked about, you know, the safety issues around these disruptive storms and fires and so on. Another thing. So, you know, people are going to, you know, this is a, I think it might be bigger than artificial intelligence, to tell you the honest truth.

[00:17:53] The more I think about it, I think it's going to lead to potentially a lot of social unrest if we don't come to grips with this. And I'm sure industry leaders, hopefully, are thinking about this and these industry associations we talked about before. Because if governments don't deal with this, guess who people are going to come to for answers? They're going to come to companies, organizations, right? And so, you know, we saw what's happening in the United States where they've cut back the FEMA funding, you know, like, really? Yeah. Yeah.

[00:18:24] And meanwhile, you know, parts of the Midwest are flattened by tornado. And the West is burnt off by fires. So, yeah, I don't know the answers to this, but it needs to be put up higher in the agenda and not get washed out by other things that are also important. It's got to, you know, it's got to, people got to keep thinking about this as to what we're going to do in the future in this area. Mm-hmm.

[00:18:47] I remember reading an article about the Pentagon and how they thought that this was like a really important issue to be mindful in terms of predicting wars and things like that. I imagine it's faded from their consciousness too for a while. So, if someone is watching this and going, holy, I'm running my HR function, our HR function is totally internally focused.

[00:19:15] How do you suggest they start changing that focus and perspective? Well, hopefully they act proactively before these events overwhelm their organizations and them. First thing I want to point out here is some HR people may find this challenged because they're focused on running these processes, as I mentioned before, maintaining stability. Mm-hmm.

[00:19:43] And the various staffing, pay, benefits. There is plenty to do on all of that. And then now we're going to layer this on top of it. And that's why I'm going to digress from what I was going to say and say that's why organizations got to have two different groups of people. They got to have a group of people managing these processes, maintaining stability, and they got to have people focused on the external and what's coming next. Mm-hmm. So, you're going to have some, you know, frontline HR people.

[00:20:13] You want them focused on this process. Make sure they're running efficiently. Mm-hmm. But you as a manager or a leader, you better think about the future and how stuff is going to affect you in the future as well as managing this. HR is not an easy job, as all of your followers well know. Yes. So, yeah, they got to do both. I think for, but some HR people, even leaders are going to struggle with this. They got to have a certain skill set.

[00:20:39] They have to be able to look into the future, anticipate these future events. And some of them might be hard to identify them. There might be little bits of information that don't make a lot of sense initially that could become quite disruptive as they evolve over time. So, these subtle kinds of changes in the external environment, as they evolve, they could be quite impactful. And then once they get that, they've got to explain it to others in the organization.

[00:21:07] Others will be, you know, questioning this kind of thing. Yeah, they'll be skeptical. Why don't you have to worry about climate change? You know, it's raining today. Come on. Right. We've got those kind of capabilities or attributes. I think they've got to, and they work, you know, there's a kind of a team approach, which, you know, is a group of HR people working together.

[00:21:37] They got to invite, they got to learn more, like AI. They got to learn more about all these potential things. So, invite knowledgeable people in to talk to your group. So, if you have an annual planning process or six-month planning process or whatever, invite people in from the university or wherever who are knowledgeable in this area. And just talk about how this might impact the organization you work in and the HR function. Brainstorm then. Just start to think about, okay, how are we going to respond?

[00:22:05] This is where creativity and innovation comes in. How are we going to respond to these kind of things? And then start to think about, okay, that's kind of a nebulous kind of thought. How are we going to operationalize this? How are we going to come up with workable solutions? Yes. If you're referenced to climate change, for example. To deal with this. And then, you know, go through the usual planning action steps to make stuff happen. You're going to run into resistance.

[00:22:33] That's where skills dealing with resistance to change will come in. You know what we're going to run into? The people that are, you know, doing the day-to-day skeptics thinking and saying out loud, you are wasting our time. You are losing, you know, this is never going to happen in the, you know, this isn't our job as a company. This isn't my job as an individual. Like, just so much resistance. Exactly.

[00:23:02] And so that's called resistance to change. And so it will be frustrating. But I think one of the first things I did when I was working in this area was find people who, I'm going to reference a person that you know very well who taught me this lesson. You work with people who recognize these external pressures and are prepared to do something about it. So throughout the organization, you may not find, everybody may not be on that page.

[00:23:32] Some will. That's where you start. And you start to, you know, build from there. Yeah, you will run into, you will run into resistance. People, as I said, on climate change, people are just, they just can't cope with the implication. It's probably the AI too. It's the same thing. How can this artificial intelligence do my job, do the thinking that's required in my job? And so that's, you're going to, so I think comes back to really working with people,

[00:24:01] trying to educate and raise their awareness of these kinds of things. Not talk down to people, but try to explain to them, give them facts and data. And hopefully you start to bring around, not, you won't get it right across the whole organization. Initially, I don't think, we work in areas where there is a recognition of the need for change. And then you go from, you go from there. I was going to say one other thing that, and this, this is another concept that's kicking around the business world. And it's very useful tool.

[00:24:31] We introduced it after the great recession in 08, 09, which surprised our company, nearly sunk it financially. And that was at every management meeting, team meeting, whatever, you have a discussion about what are called black swans, which are what could possibly go wrong that we have not thought about and what we need to be prepared to deal with. And so it was just kind of a brainstorming 15, 20 minute discussion.

[00:25:00] I remember that CEO of our company, each weekly meeting, that was right at that. And after we talked about safety, we talked about these black swan, potentially black swan events. And so that we hopefully didn't get surprised. Now, I don't know if they got surprised by COVID. I wasn't there. But that's the sort of thing that comes out of nowhere. So right now we have Ebola in Africa. You know, what is that another potential pandemic that we need to be?

[00:25:28] So that's the sort of thing that this mess in the Middle East right now, of course, it's raging. It's not a black swan anymore. It's actually happening. But that's the sort of thing that you guys sit back and say, look at these kind of potential scenarios and have a discussion about that. Hmm. That is a useful idea. All right. Jim, we're at the end of this. Where can people find you, find your book? Oh.

[00:25:58] Well, it's available on the publisher's Friesen Press. So it's available in what they call their bookstore. But it's also available, I think it's available through Amazon and Indigo now, maybe one or two other book sites. Okay. People live in the Vancouver area. Yeah. I'm very happy to get together and have coffee and, you know, save you the distribution costs. That's amazing. I did that yesterday with one of my former colleagues from Tech. Amazing.

[00:26:28] Amazing. That's a great opportunity, people, if you are living near in and around Vancouver. Well, thanks, Jim. That was great. That gave, you know, me a real glimpse in a way I've never had before, actually, about how broad we need to be thinking. In HR about what's happening outside of our organizations.

[00:26:54] I'm going to include the link that I did with, of the video I did with Jim when I first started the channel. So long ago. Five years ago we did this. Yes. It was so long ago. That is right here. Thanks for watching out there and we'll see you next time.