Due to falling infections and increasing vaccination numbers, the home office requirement is expiring in many places. How do you return to the office? Which forms of work seem sensible? What effects does this have on HR and organizational capabilities?

Hybrid work models

Many executives still struggle to define return-to-office strategies that reflect an appropriate balance between face-to-face and virtual interactions. In the absence of data, many executives advocate hybrid models based on intuition. For most companies, the balance between personal and virtual interaction will certainly shift due to the pandemic. However, in order to win back employees who have personally experienced the benefits of remote working, executives need to provide compelling reasons why work models that involve a level of personal collaboration are not only good for the company but also valuable for the employees.

Rob Cross & Peter Gray explain why organizational network analysis (ONA) is the right tool to answer three critical questions when determining the strategy for returning to work:

  • Who should be brought back together in a weekly cadence of personal and virtual interactions?
  • Which work should be prioritized in the now scarce personal time?
  • How do executives manage the transition to a hybrid model with the least resistance?

Gillette went a slightly different path together with MIT Sloan and developed a four-stage framework for hybrid work (Fig. 1 in the attached presentation):

  1. Identification of the most important key figures that are decisive for the success of a company.
  2. Identification of the optimal in-office days to maximize the effectiveness of each metric.
  3. Classification of metrics for each step of the product lifeline.
  4. Using a weighted average to determine the optimal number of days in the office for each step of the product lifeline.

Companies that rely on intuitive approaches tend to attach too much weight to functional structures and overlook the importance of cross-functional interactions. ONA or key figure-based approaches help to optimize cooperation within and between organizational units and can prioritize stimulating interactions that take up a lot of time, such as brainstorming, design thinking, problem-solving and feedback sessions (Fig. 2 in the attached presentation ).

In addition, decisions about specific room uses are also improved in many ways thanks to a better understanding of the network requirements.

Where is HR heading?

HR departments invested a lot of time around Covid-19 in the last 15 months; in particular in the context of occupational health and safety regulations, effects under labor law and vaccinations by company doctors. Board members and managing directors turn to HR for both daily crisis management and workforce strategies. This dynamic is demanding; the question of necessary HR skills arises.

In a Europe-wide study, McKinsey identified four areas that CHROs should focus on:

  • Engage more directly and deeply with employees: HR can regain a human touch by using self-service solutions in a very targeted manner. In the age of hybrid work, the performance range between unmotivated and committed employees is increasing dramatically.
  • Let employees bring their “whole person” to work: HR can respond more specifically and dynamically to the employee experience [EX 4.0]; i.e. not only focus on contractual and security aspects, but also on diversity, justice and inclusion, as well as on meaning and purpose. Positive employee experiences have a direct impact on customer experiences.
  • Paving the way to the “new possible”: HR can make agility a reality by distributing decision-making across the entire organization, not just headquarters. A dynamic and collaborative structure is beneficial here.
  • Act as “human capitalists”: HR leaders expand their view of talent to the whole ecosystem; i.e. they involve the so-called “contingent workforce” – interim managers, freelancers, experts. The main goal is not to reduce costs – in the short term, even higher, more variable costs could arise – but to increase flexibility and develop talent pools that are not available for full-time employment.

HR professionals should therefore focus on the internal culture as well as the willingness and capacity of the organization for change, but be constantly aware of the broader human ecosystem and the markets from which they attract and integrate talent (Fig. 3 in the attached presentation).

I have already discussed the necessary competencies and skills several times at this point. In a recent article, Ian Bailie & Caroline Styr highlight nine skills across three categories – data-driven, experience-led and business-focused skills (Fig. 4 in the attached presentation).

How are organizational capabilities promoted?

With a view to business results, “organizational capabilites” count more than “individual skills”. Organizational capabilities represent what the organization is known for, what it is good at, and how it allocates resources to win in its market. That is much more than roles and structures!

In an article published in June 2021, Dave Ulrich names twelve capabilities that are critical to success. HR professionals can help define which of these capabilities will best lead to the most important results in the company.

As can be seen in Figure 5 in the attached presentation, the twelve skills have a different, relative influence on employee, strategy, customer, financial and community results. For example, this data show that strategic clarity and agility are the most important capabilities for strategic business results; whereas strategic clarity and customer orientation are the most important capabilities for customer results. With such an organizational guidance system, HR managers can help their organization understand which capabilities are most important for which results.

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Conclusion

An evidence-based approach to hybrid work planning shows employees how they can be brought together spatially and temporally with precisely the people with whom they most urgently have personal interactions. ONA can also be used to persuade employees who are still hesitant to return to the office on a daily basis.
From the multitude of possible models, the “clubhouse model” could prevail; a hybrid model where employees visit the office when they want to work together and return home to concentrate on their work. The office serves as a social center – the place where people meet, socialize and work together.

Investing in HR team development is critical. The culture must support the transformation of HR into a digital, data-driven function. Nickle LaMoreaux, CHRO at IBM, outlines such a cultural transformation in an interview with Eric Mosley. Four things are in the foreground at IBM: growth, innovation, inclusivity and feedback. “Feedback is as important as growth, innovation, and inclusivity because you can’t have those first three elements without feedback.”

Organizations should be defined less by their structure and systems than by building the skills needed to win – that is, serving customers in ways that competitors cannot easily copy.
HR thus makes a significant contribution to business success by creating a more agile workforce, developing the right organizational capabilities and embedding them in the company, and ultimately driving forward DEI (diversity, equity, inclusion) efforts.