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Why traditional HR is dead

The number of companies without classic HR departments is rising. Andrew Mulder, head of people at MVF, explains why he agrees the function is no longer fit for purpose.

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“The billion pound company without a HR department” declared various mainstream news outlets recently, shining a spotlight on the traditionally sedate world of HR. That was until COVID-19 dragged our profession kicking and screaming into the public discourse. The articles and interviews referred to Octopus Energy and its founder and chief executive, Greg Jackson, who believes HR departments don’t make employees happier or more productive.

 

As someone who has spent around 15 years within the HR space, this struck a professional nerve. I came up with a list of at least 30 reasons why this was total rubbish, just for fun. I had a full on amygdala hijack and let my animal brain run riot, I felt like these articles were personally attacking myself and my wonderful team. And if you don’t know what an amygdala hijack is, but would like to - read Daniel Coleman’s 1996 book Emotional Intelligence: Why It Can Matter More Than IQ (or just Google it).

 

Putting my outrage aside, I read the articles. As I did, I realised, begrudgingly, that I was far from disagreeing with Octopus Energy and thought they had a point. Then the penny dropped: I too was working in a business that did not have a HR department. This might sound like an odd statement coming from a “head of people”, but bear with me.

 

We don’t use the term “HR” at MVF. We have nothing against folks that do, but it is just not our thing. We do not like the concept that humans are “resources”. People are people. We treat them that way and want every person at MVF to have an incredible experience while they are here. That is the mission of our people team.

 

Let people manage people

For those who have not seen the media about Octopus Energy, the premise of their idea is simple: Don’t hire creativity only to stifle it with bureaucracy. Train employees to deal with issues and support them to find their own solutions.

 

At MVF, we have a similar outlook. We believe in avoiding silly rules and do not create pointless policies. Finger wagging at the majority to police the occasional foolishness of a tiny minority, is strictly prohibited (not a silly rule in our opinion). We believe our managers are most qualified to manage their people, but this isn’t how all HR professionals think.

 

The problem

I’m lucky to have learned my trade by working with some amazing professionals in fantastic organisations with established HR teams. These colleagues imparted the traditional wisdom of HR best practice. The problem? Our so-called best practice is all too often just established risk management activity repeated again and again, rather than genuine value-add. Why? Because “no one ever got fired for buying IBM”.

 

Many of us have conditioned ourselves to think like a process person rather than just a person, and when this happens employee experience will invariably suffer.

 

Please do not misunderstand me, there is no point in just changing the name of your HR team to the “people team” and carrying on as you did before. Your people will see right through it.

 

A people team puts the organisation’s people at the centre of its thinking. A people team will keep the organisation honest and make sure that difficult issues are dealt with openly. A people team recognises that top talent is discerning and understands the need to create a world-class experience that people will want to be a part of. Very rarely (never) is this achieved through having an extensive employee handbook, a long list of policies and or a rigid one-sided disciplinary meeting.

 

Being people-focused means being intentional, emotionally intelligent, design-focused and always asking “what will our people make of this?”.

 

It turns out that MVF and Octopus Energy are aligned: Invest heavily in training your people, empower them, then get out of their way and let managers manage.

 

Octopus Energy has seemingly decentralised this and let their best people gravitate organically towards the role that would be traditionally fulfilled by HR or people pros. Although, at the time of writing, there are L&D and talent acquisition vacancies at the company, so all is not lost.

 

At MVF, our wonderful chief people officer Andrea Pattico chose to design a structure that we all think works very well, but we would say that wouldn’t we? Our people team is filled to the brim with world-class professionals full of specialist knowledge. Our job is to share that knowledge, coach our people and step back, but our MVFers always know the people team has their backs if they need us.

 

All businesses are different. Greg Jackson’s company is an energy provider and MVF is a customer generation business. What is right for one company is not automatically right for the other, but challenging the status quo is to be applauded. If by any chance Greg Jackson is reading this, I would love to buy you a coffee and learn about how it is all going.

 

In summary, I agree with you Octopus Energy. The traditional HR department is dead. Long live the people team (even if you don’t call it that).

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