The 2019 year-end reflection: the new DNA of HR

Time flew fast as always. The dynamic year 2019 has just gone to history. Due to broad economic uncertainty and political tensions between the US and China, the manufacturing industry has struggled to manage its assets lean and flexible. At the same time, exponentially growing IT technology has threatened traditional value chains and products and forced the market players to put all-in for innovation. (Why your next transformation should be ‘all in’, October 2019 McKinsey Quarterly). I wondered which companies have been successful in the year 2019 despite the challenging business environment. There must be valuable insight while I am reviewing their traces in the year 2019 for my profession in HR.

It was rather easy to find which companies were the winners in 2019. “Microsoft (MSFT) and Apple (AAPL) are Now Bigger than Germany’s Entire Stock Market”, ccn.com, December 27, 2019. I wanted to know more about Microsoft’s story since I have recently been impressed with its new products and its functionality such as Power BI Service and Azure. As expected, the Microsoft stock has been up 56% in 2019. (Source: Yahoo Finance) Maybe what made them successful can hint HR for its innovation in the year 2020. 

Two business sectors of Microsoft significantly grew in 2019- Productivity and Business Processes of YoY 13% and Intelligent Cloud of 27%. (Source: Microsoft Investor Relations, Oct. 2019). The Productivity and Business Processes were driven by Office 365 and LinkedIn revenue growth. It implies that SaaS has been well penetrated in our IT environment and the business model of subscription has replaced our long-lasting behaviors to purchase an asset. Moreover, it is not so much surprising to see the growth of LinkedIn revenue when I see the broadened contents of LinkedIn from professional networking and job or candidate search to LinkedIn learning and business solutions. The success of LinkedIn has empirically proven how variously the data collected from our profession and careers can be consumed to enable successful business results.

The growth of Intelligent Cloud was led by Azure revenue growth of 59%. Microsoft explains that Azure as a public cloud computing platform has solutions including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) that can be used for services such as analytics, virtual computing, storage, networking, and much more. The breadth of functionality of Azure may indicate that cloud computing platforms can be a technological catalyst for organizational innovation – innovative culture, capability, and workplace. However, various anecdotal evidence means many entrepreneurs have yet suffered from behavior and culture change for the fluency of cloud solutions.

What the success of the Microsoft products mean to HR: the emergence of the new DNA of HR

HaaS (HR as a Service)

The success of Office365 implies that contemporary users’ desire to subscribe to preferred products just for the time when they see their utility. HR should take the user preference to subscription into account as a critical design feature for HR systems. In VUCA world, things have been changing rapidly and people are encouraged to adapt to new environments quickly. Everyone has their own challenges and meaning or purpose on their career journey. It is almost mission-impossible to satisfy heterogeneous needs among all workforce through conformity of central processes such as mandatory performance evaluation or talent evaluation where every manager and associate should comply with the nitty-gritty of the process. People are sick of the rigidity against their personal needs. People should be more empowered to choose the most relevant option and grant freedom not to choose when they find no value out of it. HR should offer selective or modular options for a strategic objective of the business so that people can choose or stop any on demand.

Digital Platform

LinkedIn proves that digital platforms can be materialized in a way to strengthen professional networks and facilitate exchanges among users. People use LinkedIn not only to fulfil the needs of job or candidate search but also to share their knowledge and learn from the blog written by professional leaders around the world. It has substantially reduced the marginal cost to acquire new information and sparked the motivation for individual or business innovation. In LinkedIn, people can be assessed purely with what they achieved in their career and which skill set they have by the crowd. The hierarchical title of their current position is not so important because the depth and breadth of individual expertise can be empirically revealed in the transparent platform. Thus, people are motivated to share what they have known and experienced with others for their own development and reputation rather than for monetary compensation or hierarchical upgrade. It has always been a dream of HR that associates enthusiastically perform on their intrinsic motivation and actively exchange their knowledge for open collaboration and innovation. Digital platforms can be the key to it.

Analytics capability

Azure is a solution that can connect almost every IT system we have managed and get things done by leveraging legacy systems. It motivates us to ask ourselves to which degree we are capable to make use of it. Some argue that an investment budget for advanced analytics solution is a prerequisite for the improvement of their analytics capability. However, my experience in 2019 means in many cases quantitative analytics has been challenged to be taken not by the software capability per se but by the users’ readiness to understand the statistical logic and trust the result. There have been many useful cost-free tools in the market such as Excel Power Query, Power BI, and R. They are good enough for self-service analytics. What matters most is whether the people in our organization are capable or willing enough to discover deep insights, make predictions and generate recommendations. The key driver for analytics capability is an analytical culture to diagnose problems from a backdrop of causation and prescribe effective solutions based on the proven result of its efficacy.

Many investment banks such as JP Morgan, BlackRock, and Goldman Sachs lay out the positive outlook of the year 2020. It seems the economic conditions in 2020 will have tailwind thanks to some ease of fiscal policies worldwide. However, all the banks also uniformly point out that the year 2020 will be very uncertain. HR needs evolution to enlarge its value contribution. The three important features of HaaS, digital platform and analytics capability can’t be empathized enough to say that they are a new DNA of HR to maximize the return of human capital in the VUCA ecosystem of the year 2020.

Thank you all in my network for sharing your information and knowledge with me. It helped me a lot to grow. Wish you a happy new year!

Chongro