Management 3.0 and Human Resources 3.0 – new trends you need to know
February 1 2022
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Human Resources is usually related to classic recruitment conversations done in the company’s offices. The goal is to hire people rather than build a positive image of an employer. With the rise of Human Resources 3.0, everything changes. It’s not only about hiring the right and talented person, but also about treating the person as a valuable business partner and even a brand ambassador. This forces a whole new approach – from the HR department and the entire company as well. Why is that exactly and how can you deal with it? I will gladly help to understand.
Modern human resources processes and modern HR forces organizations to change mindset and business processes. This applies not only to people directly involved with HR; it applies to the organization as a whole. Starting with an owner, through managers, people directly working with a new hire, ending with “ordinary” employees. Human Resources 3.0 is a holistic approach to business, which is an element of the entire ecosystem, creating innovation in the company. You can read more about my previous entry about the true nature of innovation.
What is Management 3.0?
Human Resources rely on natural evolution. We’re not talking only about HR processes but also these that make an organization. HR 3.0 is a part of a broader phenomenon called Management 3.0.
Beginnings of Management 1.0 reach the beginnings of the heavy industry. This, naturally, comes with automatization and the birth of the “management” term. Back then, a manager expected obedience. The thinking wasn’t valued’; it was sometimes even punished. The symbol of an era was Henry Ford that said “Why is it when I hire a pair of hands, I get a human”.
Back then, an employee was nothing more than a part of an assembly line. He or she should not come forward with an initiative, just be a part of a well-oiled machine.
Management 2.0 means that an employee can and even should think independently, but only within precisely defined bounds. In this model, an employee should have and even display an initiative. He or she can actively voice concerns, but orders are still coming from the top, and these concerns or own opinions can’t mess with the boss’s vision.
Management 3.0 and Human Resources 3.0 are a true revolution in management. At its core, there’s an idea that every employee is responsible for the organization’s performance. An employee is defined as competent and capable so it’s self-sufficient and self-organized. He can adjust his or her workday according to the current workload and needs. In other words – a workday is a tool. If the character of the work and the industry itself allows that, an employee can perform at almost any time of day and night, from any given place in the world, remotely included.
This is the origin of the term “digital nomad”, which describes a person working almost exclusively in new technologies. He or she can work from wherever, lying with a laptop on the beach. This type of employee is not bound to a desk or linear concept of tasks. The modern market is way too dynamic to be understood in yesterday’s terms – we work from 9 am to 5 pm, starting with an A and ending with Z. Sure, it’s good to remember about work-life balance and generally speaking, the old model of doing business no longer apply.
The pillars of Management 3.0
Every concept needs foundations. The pillars of Management 3.0 are:
- Energizing people. If people see the meaning of their work and they are paid accordingly (in money and acceptance, also on the company’s forum) then they want to work. Simple as that. If that’s the case, beneficiaries are the employee’s team and the organization as a whole.
- Teams’ empowerment. To be efficient, teams should be self-organized, self-reliant, and cross-functional. In other words, they should organize themselves, without a manager, have all the necessary competencies and resources to tackle tasks and solve problems. They should also consist of people with different competencies and look at things to solve challenges. In more complicated situations they can ask about opinions from outside the project team.
- Aligned constraints. A team should have a clearly defined goal and competencies to achieve that goal.
- Competence development. I believe this doesn’t require any explanation; skills are everything.
- Structure growth. A team should be a group of people that understand one another and have respect for each other. An organization, on the other hand, allows these people to grow. We’re talking about professional, emotional, and communication skills.
I’m not a fan of the approach that dictates only a utilitarian look at employees. We should not be looking at them only through the lenses of direct performance and achievements of their work. Naturally, it’s the most important part, but the level of satisfaction at work and the feeling that the employer invests in the future of the crew is also very valuable. Companies that don’t agree with this approach and still treat people like cogs in the machine, usually lose people very quickly. Recruitment costs rise and the recruitment process itself is longer. Mainly because people already know what the market thinks about the company. The company, mostly because of the manager’s approach, is not aligned with their needs.
- The growth through experimentation (improve everything). Many owners and their managers refuse to experiment. They are afraid and think of them as expensive endeavors on the edge of accepted risk. According to them, these are unnecessary expenses that often are not tax-deductible. Not to even mention a real value for the company.
Here’s where Management 3.0 shines are brings one of its best values – employee loyalty and innovations. If you have read a previously linked article about the true nature of innovation, then you know what innovation really is. Innovation requires a level of health risk. If you allow your crew to pursue experiments, they can surprise you with a breakthrough product, but also strengthen bonds with the company itself.
The real reason for all of this is the redistribution of power. As an owner, you’re a leader but if you pass the torch and competencies towards self-organized teams, then benefits will far outweigh losses. Perceived only by you. Things like loss of power or even authority are all in your head. It’s quite the opposite – an organization that offers people more freedom is perceived as a good place for innovation. And if not, a good place for higher incomes from products’ sales. In the collective mind, this kind of organization is simply more effective. And who can be responsible for all that glory? You.
Another important element of Management 3.0 is so-called “teal organizations”. In this article, I won’t be expanding too much and say a lot about the teal approach. It’s a different topic.
Transparency – an important element of modern management
Modern Human Resources can’t function without transparency. No matter if we’re talking about Human Resources 3.0 or about widely understood management. New trends in HR and management clearly show (and this is proven by a decade-worth of practice – Management 3.0 was invented in 2010) that people expect trust and transparency.
Transparency can be widely understood. As transparent decision-making. As transparent HR processes, where each candidate gets feedback. You can also be transparent in relations with a client and show him why a product or a service costs that much and what the cost comprises. Finally, you can show (after a 3-month trial period, for example) what is the financial situation of the company and what the money is spent on. Plus, who is making what, on each position.
I’m not a fan of the last approach, because it generates a lot of unnecessary noise and decision paralysis. Especially in teal. Companies that decide to adopt the teal model, make transparency an absolute priority. The result is wrongly understood democracy, where each and every employee “knows better” and feels competent to throw five cents to every single project and company matter. I bared witness to many situations like this and generally, I don’t recommend implementation of the teal model to run a company.
This, however, doesn’t mean that transparency doesn’t have its benefits. Healthy understood has and lots of them. Transparency lets people confess to not knowing something or making a mistake, even on a team’s or company’s forum. Alongside the adopted trust culture that is a part of company culture, such a confession will not be punished but treated as a brave and natural thing. We are all human, we make mistakes. We don’t hide behind them.
If we don’t know something, we simply talk about it. The fact that we are educated, have knowledge, experience, and ideas, doesn’t make us walking encyclopedias. In the old approach for management, this was sometimes the case. An employee should know everything. Today it all relies on the approach that I personally call “a journalistic rule” – an employee doesn’t have to know everything. He or she must have a solid background but also the ability to learn and know how to know. That’s a difference.
If the company bears witness to failure, we talk about it and draw conclusions, not go after people and blame them. We are a team with a unified set of goals. If people will blame other people, the morale will go down. If we will work as a team, the morale will go up.
What Human Resources 3.0 is based on?
At last, we have reached the famous HR 3.0. This is a previously mentioned evolution and maturing of the company. Alongside with maturing of society and optics about roles in processes. Modern HR does not adopt HR trends, but bets on maturing processes.
The term Human Resources 1.0 was created to describe a very standard set of responsibilities. HR was focusing on recruitment processes, conversations, documentation, CVs, asking questions, IQ tests (!), forms, and bureaucracy.
From today’s perspective, it’s not only boring but ineffective. It gives reasons not to apply for the job. It also blurs the vision for recruitment specialists and makes them miss non-standard individuals that can put in a lot of talent, but they fall through the cracks on linear, binary thinking. Oh, and by the way – we don’t call them “individuals” anymore, we just call them people.
Human Resources 2.0 is a big leap in thinking about who an HR specialist really is. Here, trends force us to think about a modern HR person like a business partner. A person that influences the decision of who makes the cut and gets hired but also directly hires. The most important part – that person has an impact on the company’s policies and internal processes. That’s why in this model, we talk about HR specialists as “HR Business Partners” and even officially talk about professional titles sounding exactly like that.
In this model, we say that “HR got a seat at the table”. Marketing, sales, production, R&D, bookkeeping, etc. These are traditionally understood teams that had a say on how the company looks like and what is happening inside. From now on, there’s an additional seat. HR can not only hire people but also has a say in business processes.
Human Resources 3.0 puts a human being in the center. It’s a transition from a partnership model towards the growth model and cutting bureaucracy to a bare minimum. In other words – we almost forget that HR 1.0 exists and treat it like a tiresome but necessary element of our duties. What’s good in HR 2.0 we transform to serve the entire company. We achieve that through enhancing the talents of our employees.
Many companies make a basic mistake and put on the menu classic benefits like fresh fruits at least one day in a week or a sports card benefit. Yes, treating our bodies with healthy foods and sports activities is important and employees value that. But it’s a standard and it doesn’t affect people that much.
What do people expect and how can you help them?
A modern human resources management prompts one simple thing – listen to what employees have to say, but mostly observe current social trends and embed HR 3.0 in a larger context. It’s a nice idea, but what does it mean in practice?
I’ll give you some examples. The COVID-19 situation turned people towards animals and in many countries, they adopted or bought a lot of them. With many sociates being rich and countries developed, people grow consciousness and social sensitivity. They care more about the needs of their pets. Why not offer them a benefit in a form of a subscription for a veterinary clinic or for an application that makes them happy? Currently, many applications cover pets’ needs.
Another interesting benefit can be… psychological help. This is also a strong trend that has risen from the COVID-19 situation. In many social circles and societies, going to a psychologist is not taboo anymore. People need help and life partners can’t be all – a nanny, a car mechanic, a lover, a mentor, a psychology expert. It doesn’t work that way. Therefore, people are now open to outside help. They fix their problems. Not only related to work, but also communication and private issues.
In this context, old-fashioned professional training sound trivial, but it’s not the case at all. Many people still look for their place in life and even in their respected organizations. They want to change their position or expand their competencies. If it’s justified by their position and tasks, a company can help them get better.
How practical are Management 3.0 and HR 3.0?
I have covered this earlier in the article but let’s sum it up. They both offer:
- structured and more effective business processes
- new, more responsible, business and employee-focused nature of HR department
- building a positive image as an employer and company
- more motivated employees that are focused on business goals
- less employee turnover, reduced recruitment costs, and higher chances to find better candidates in future recruitment processes
Today many companies, professions, and business processes go through digital transformation and automatization. Robots and algorithms support and even replace people. Those that will stay will not be limited to overseeing machines, “lubricating the engine and screwing elements” for the machine to properly work. On the contrary. People that will not be replaced by automation, will be extremely created, responsible, and conscious. Modern HR needs to keep up with that.
New HR trends and economic trends in general, come and go. Human Resources 3.0 and Management 3.0 don’t go anywhere. They are a natural consequence of industrial and social changes. They require a certain level of knowledge in companies and optimized processes. Especially when HR is not recruitment alone, but also employer branding (EB).
Today companies have to change, dynamically. Tomorrow every single company, no matter the industry, will be a technological one. There will be room for experiments, but smaller room for making mistakes. That’s why HR trends set directions and offer sets of good practices. It’s definitely worth following them.