Human Capital Innovation (Part 3): Is the C-Suite Asleep at the Wheel?

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Previously in Human Capital Innovation (Part 1): Technology, Talent and a New Playbook for Organizations and Human Capital Innovation (Part 2): Innovative Enterprise Talent Solutions and Guiding Organizational Change, we analyzed opportunities and challenges organizations face in adopting digitally enabled, project-oriented “new ways of working” that can yield tactical and strategic advantages.

In Part 2, specifically, we emphasized the necessity of pairing adoption with deep organizational change:

Adopting a new way of leveraging talent means changing critical parts of an organization’s underlying musculature and nervous system. Ultimately, such a change requires a transformation of the reflex response of “how we get things done with talent.” This means a departure from well-established practices for hiring talent and managing work, projects and outcomes.

In many ways, this is a decentralized, bottom-up process, but it cannot gain traction without the proactive support and power of the C-suite.

Where is the C-Suite today?

Strategically, C-suite executives in larger enterprises certainly understand the importance of acquiring and managing human capital. The war for talent, skills gaps, outsourcing, and employee engagement and retention are terms that resonate with them. Executives at the C-suite level tend to rely on HR to understand human capital challenges and plan potential organizational responses.

In most organizations, however, HR has remained anchored in the legacy world of managing permanent employees, and it has not focused much on managing contingent workforce (something often left to procurement in a separate silo). In addition, HR has not generally kept pace with how technology is beginning to transform the very concept of work and talent engagement.

While senior executives — like the rest of the world now — may be familiar with terms like gig economy, freelancer or on-demand, what this means for the organization today may not be fully grasped. What is already happening today goes beyond just the use of contingent workforce, staffing and consulting; it is a technology-based transformation of how work is done and talent is engaged — what we have called human capital innovation.

Current technology not only makes it possible to efficiently utilize external talent (expertise and skills), with flexibility and timeliness. It also allows this talent to be effectively blended into the fabric of the organization to work with internal employees on targeted and even mission-critical projects, in many cases providing expert capabilities without which a project would not be completed.

While these kinds of “human capital innovation” opportunities are available today, upper management — including the CHRO and the CPO — are generally not aware of these real options, to say nothing of understanding them.

HCIQ Test

To gauge your own level of understanding, take the following Human Capital Innovation Quotient test. There are 10 questions, for each of which you can receive up to 10 points. Tally all of your answer points to calculate your own HCIQ score (you may want to use a scratch pad):

Questions Potential Answers (Select One) How to Score Your Answer Points Points per Answer
1.     How many of the following online work platforms do you know: Upwork, Kaggle, Catalant, Contently, Applause?
  • All of them = 10 pts
  • 4 of them = 8 pts
  • 3 of them = 6 pts
  • 2 of them = 4 pts
  • 1 of them = 2 pts
  • 0 of them = 0 pts

 

Use key to the left to determine points
2.     What percentage of large U.S. enterprises have some informal usage of online work platforms?
  • <25%,
  • 25%-74%
  • >75%

 

Use Answer Key below at the end of this piece to determine points (don’t cheat)
3.     Accenture surveyed more than 5,400 IT and business executive globally. What percent said they plan to increase their organization’s use of independent freelance workers over the next year?

 

  • <25%,
  • 25%-74%
  • >75%

 

Use Answer Key below at the end of this piece to determine points (don’t cheat)
4.     MBO Partners estimates the number of “full-time” freelancers in the U.S. earning more than $100,000 annually at around (a) 3M, (b) 6M or (c) 10M

 

  • 3M
  • 6M
  • 10M
Use Answer Key below at the end of this piece to determine points (don’t cheat)
5.     Do you know the difference between an online freelancer marketplace and a crowdsourcing platform?

 

  • Yes =10 pts
  • No = 0 pts
Use key to the left to determine points
6.     Do you know what a freelancer management system (FMS) is? (Hint: different from both in No. 5)

 

  • Yes =10 pts
  • No = 0 pts
Use key to the left to determine points
7.     Are there online work platforms that specialize in specific categories of talent/skills (e.g., software testing, etc.)? (a) yes, (b) no

 

  • Yes =10 pts
  • No = 0 pts
Use key to the left to determine points
8.     Do you and your management peers discuss this “human capital innovation” subject? (a) yes, (b) no

 

  • Yes =10 pts
  • No = 0 pts
Use key to the left to determine points
9.     Does any part of your organization use some kind of external online work platform? (a) yes, (b) don’t know

 

  • Yes =10 pts
  • No = 0 pts
Use key to the left to determine points
10.  Do you have some reasonably accurate idea of what percent of your total workforce is made of freelance/independent contract workers (not from staffing firms or professional services/consulting firms).

 

  • Yes =10 pts
  • No = 0 pts
Use key to the left to determine points
Tally answer points for all 10 questions. This is your total HCIQ Score =

Using the scale below you see what grade (from an F to an A) you get.

  • Under 25%=F (comatose — wake up now or never),
  • 25-49%=D (have a vague sense — need to study harder)
  • 50-74%=C, (starting to get it — HCIQ Course 101 level)
  • 75-89%=B (ready to evangelize and support)
  • 90-100%=A (enlightened — ready to lead and make it happen)

If you got a low passing grade, it just means you have more to learn more. That holds for a B grade, as well — ready to help others understand and participate in HCI initiatives. If you scored an A, then you have reached a level where you are able to lead an initiative and guide organization change.

Readiness to Guide Change

Having knowledge of the dramatic, technology-driven changes in how organizations can efficiently engage high-value talent and effectively apply it in your organization is the first step toward understanding and taking advantage of these new opportunities. So, if you got an A or B on this quiz, then you are well-positioned to get started on opening space for and guiding human capital innovation in your organization. If you got a C or below, then you have a ways to go in becoming prepared. Without some level of knowledge, credibility is impossible — and so too being able to lead change.

The next step is developing a strong conviction that human capital transformation is worthwhile change to pursue in your organization. You must be convinced that it is operationally or strategically important for your organization (or parts of your organization) to move along this path. If it’s just a hypothetical, then going forward halfheartedly is probably not productive.

But if there is a strong, knowledge-based conviction that pursuing human capital innovation is a way to solve talent challenges in the organization and have a major impact on performance, then the next step is to engage your peers as an evangelist and a leader. No matter if you are the CEO, CHRO, CPO, CFO, CTO or COO, someone needs to light the match and see if the fire will catch. There must also be a consensus from the management team that the organization needs to move in this direction and each member is committed to playing a role.

The next step is beginning to “guide change” in the organization — not so much to lead it. Leadership implies followers. Guiding change is different. It is not a tops-down approach; it is an approach that makes space in the organization for the unfolding of human capital innovation, which must start at the departmental and group levels. Guiding change is not so much presenting a vision but demonstrating understanding of open-ended process that lies ahead and giving permission to all parts of the organization (whether finance, IT, marketing, HR, procurement and so on) to consider it, validate it for themselves and pursue it.

As discussed in Part 2 of this thought leadership series, human capital innovation must ultimately be driven by the energy and self-organization at the functional and working group levels, where there will be an appetite for self-directed, value-driven innovation. The final step for management is to guide the development of an organizational scaffolding or network for all parts of the organization to share and maximize the benefit from successful innovations in the organization as a whole.

And remember: If you snooze, you lose.

HCIQ Test Answer Key for Questions 2, 3 and 4
2) What percentage of large U.S. enterprises have some informal usage of online work platforms? Correct answer is: > 75% Correct = 10 answer points
3) Accenture surveyed over 5,400 IT and business executive globally. What percent said they plan to increase their organization’s use of independent freelance workers over the next year? Correct answer is: > 75% Correct = 10 answer points
4) MBO Partners estimates the number of “full-time” freelancers in the U.S. earning over $100,000 annually at around…. Correct answer is: 6M Correct = 10 answer points

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