In the last two years I have been working with the CIPD in general, and Dr Jill Miller in particular, on a project called Beyond the Organisation. In this work we have built up a picture that shows the wide-scale reliance on collaborative arrangements in the economy today, and the increasingly inescapable need for organisations to understand how to better manage collaborative working.
Employers are increasingly finding that they not only have to manage their own workforces, but also have to manage workforces across the partnering network. These responsibilities are becoming too complex to be managed solely through contracts and formal governance arrangements. Informal mechanisms that ensure goodquality and trusting relationships are vital to the success of the network. Yet customers expect and need the relevant organisations to be brought together and to collaborate effectively, by operating in a coherent and an integrated way. This is leading to an expansion of responsibility, and heightened exposure to the risks of poor co-ordination and control across partnered arrangements.
The main business issues faced in partnering arrangements are threefold: risk, governance and capability-building. All three issues are highly people-centric, and dependent on relationships and management behaviour. HR therefore has the opportunity to make a significant contribution to partnering success and to set a clear strategic agenda for the function. This will change the way that HR functions will work, and the way that they organise and deliver their HR services.
In a forthcoming research report from the Centre for Performance-Led HR at Lancaster University and the CIPD entitled Realising HR’s Vital Role in the Success of Partnering Arrangements, we examine six different case study settings across the public and private sectors. In the private sector we looked at industry-wide partnerships in the nuclear industry at the Nuclear Decommissioning Authority/Sellafield Ltd. We have studied developments at Shell in response to the complex portfolios of joint ventures in the oil and gas sector, and we have examined the pursuit of collaborative business models at Rolls-Royce Aerospace and their use in the co-creation of value in aircraft engines. But operating in a collaborative world is not the preserve of the private sector. In the public sector we see the pursuit of multi-agency working in local government, the growth of strategic collaborations in police forces and the move from direct provision to a commissioning model in the National Health Service – we have looked at West Sussex County Council, Dorset Police/Devon and Cornwall Police and NHS East Cheshire/Avarto in this context.
Our initial review of existing work in this area uncovered six main issues for HR to consider when deciding on the most appropriate HR architecture for their business context. They need to:
- understand the way the whole partnering network operates to inform HR choices
- support partnership arrangements and build a core HR capability around this
- differentiate the level of strategic support that HR must offer between and across collaborative arrangements
- develop leadership for the whole network
- design the HR delivery model so that it can cope with crisis situations
- deal with the issue of employees’ dual identity that exists in many of these new arrangements.
Four responsibilities for the HR delivery model
Collaborative working carries important implications for the way that organisations should think about the HR capabilities they need, and in turn the most important HR structure and delivery systems. We found that the HR delivery model has to be aligned to four overarching responsibilities that become important in partnered working:
- oversight of the intended strategy
- ensuring the integrity of the strategy as it is executed
- ensuring the integrity of the operations
- optimising the operations as the partnership evolves.
Given a need for more cross-organisation collaborative working, should partners not pool or share some of their HR resources with other partners? Often each partner has to deliver strategic project work by moving HR resources from internal projects and businesses to some of their external relationships or collaborative businesses; this is often done informally by secondment.
The shift from the management of immediate to longer-term integration issues across various forms of partnered working creates other challenges for HR:
- As the organisation makes important integration decisions, how do you ensure the spread of important learning across partners, and also ensure that such learning continues to take place?
- How do you hand over the insight that any HR expertise dedicated to the collaboration has created or arrived at, and then ensure that such insight is subsequently acted upon by others if needs be?
- When important decisions were arrived at during the early or planning stages of a collaboration, how do you hand over the insights arrived at during the initial planning activity, or any decisions, judgements or sensitivities that were arrived at in assessing the pace of actual versus desired integration, to those people in HR who might subsequently become involved in operational matters? Or how do you justify subsequent changes in this assessment?
Across the organisations we studied, we found three broad responses or ‘design solutions’ to these sorts of challenges. But before we lay these out, there are two important questions to consider:
- Do organisations need to adopt only one of the solutions below, or might they ‘mix and match’ elements?
- Do all organisations in the network need to put in place the same model for it to be effective?
We can be clear about these questions. The answer to both is ‘no’. Organisations do not adopt only one solution; they might ‘mix and match’ elements. An organisation may use one structure for one partnering arrangement and a different structure for another relationship. In fact, in one partnering arrangement, several different models might be in place; Shell, for example, will broker in more or less of their own resources in relation to the importance and risk of the joint venture. Indeed, we do not believe that the choices we lay out below are the only ones – each HR operating model needs to be bespoke to the needs of the network – and there will be other solutions put in place, we are sure.
This then helps answer the second question. All organisations in the network need to make some adaptations to their HR operating model, and they need to have clear interfaces so the ‘join’ is seamless, but once you get ‘inside’ any one member of the network, the internal business and operating logics become the most important force to shape their HR operating model. The partners just need to understand those logics and why they are in place.
Dedicated project resources
So, the first design solution has been to create dedicated project resources within the HR function that can be assigned to the more strategic activity triggered by working on projects both within the organisation, or those that operate beyond your own organisation. This also involves re-aligning the culture and relationships between the other major arms of the HR delivery mechanism. For example, in Rolls- Royce, independent of the need to service a collaborative business model, changes have been made in the HR structure that introduce a major projects directorate within the HR function. But this is well suited to a collaborative environment as well.
In the case of major ‘business-as-usual’ projects, activity is safely directed into a service operations team working closely with senior business partners and HR directors who can make sure the issue is being executed in the right way. But where a novel or strategically important intervention has to be made, say for example to help manage a partner or supplier in distress, this is handled via a programme management office, through a formal process that brings together sector business and regional HR directors and examines the whole pot of potential activity, determines which activities must have a call on what is a finite amount of project resource, and what needs to be dealt with in a different and more creative way.
However, those who operate a strategic portfolio system to organise and allocate HR resource recognise that the scale and complexity of the work involved creates its own unique demands. In practice, stakeholder management becomes more complex, business partners can struggle in areas where it’s less clear who has accountability with whom and upon what they have to be collaborating, and potential cost savings might therefore be difficult to achieve.
The second design solution has been to partition the HR function between those roles that maintain an inward and own-organisation focus, and those roles that have duties across broader partners. From an organisation design perspective, often single points of contact are important in managing complex relationships – knowing who to talk to, to get things done, or to ask questions of. For example, the Nuclear Decommissioning Authority (NDA) has an organisation structure in which a director and a site-facing team face off to all the nuclear management partners. The HR structure needed to echo this. The NDA designed their HR function by splitting the roles into those that face inwards to the NDA and those that face outwards to the broader nuclear estate and the need for collaborative activity. The two separate arms – the inwardsfacing and outwards-facing (to contractors) structures – each face very different issues. The outwards-facing HR professionals have to be supported by a highlevel organisation development capability. Before they put their own organisational design in place, they relied on skills of appreciative enquiry in order to ask questions around how people understood the relationships, the complexities of how people worked across the nuclear estate.
Strategic integrator role
The third design solution has been to create various strategic integrator roles that operate across internal and external businesses, and serve to bring together dedicated expertise under their leadership. The HR function addresses potential holes in their delivery model through the creation of new strategic integrator roles – into which they can concentrate dedicated expertise. This expertise might be aligned to different challenges. In Shell these integration roles have been established and aligned to the management of international joint ventures, which have a particular importance in their upstream business. In Rolls-Royce strategic integration roles have also been created, but have been aligned to the management of mergers and acquisitions, which are critical to their business, and also to the supply chain.
One thing though now seems self-evident. Whichever design solution an HR function might adopt, there are important questions to ask about its delivery model and its capabilities. These developments are starting to change the types of skills or capabilities that organisations need, either in the specific parts of the HR structure that work across organisations, or within the HR function in general. They are bringing to the fore specific HR skills, such as organisation design, skills or leadership development, employer relations and engagement. They are changing the roles of business partners and the way they have to work. In short, they are placing tensions on traditional HR structures, which are becoming increasingly unfit for purpose when one lives in a collaborative world.
How does an organisation entering into a partnering arrangement decide on the most appropriate HR structure to support the network? Our work has shown that this needs to be based on an assessment of the level and types of risk the partnership carries, the form of governance that has been adopted (contractual or trust-based) and the need for mutual insight into the capabilities of the whole network. This must, however, be done with an appreciation of their wider business structure.
About the author
Paul Sparrow is the Director of the Centre for Performance-led HR and Professor of International Human Resource Management at Lancaster University Management School. He has worked as a Research Fellow at Aston University, Senior Research Fellow at Warwick University, Consultant/Principal Consultant at PA Consulting Group, Reader/ Professor at Sheffield University and while at Manchester Business School he took up the Ford Chair from 2002-04 and was Director, Executive Education 2002-05. He has consulted with major multinationals, public sector organisations and intergovernmental agencies, was an Expert Advisory Panel member to the UK Government’s Sector Skills Development Agency and was voted in the Top 15 Most Influential HR Thinkers by Human Resources magazine from 2008 to 2012 and was voted in the Top 10 Most Influential HR Thinkers by Human Resources magazine in 2014.
His research interests include crosscultural and international HRM, HR strategy and the employment relationship. He is co-editor of the Journal of Organizational Effectiveness: People and Performance and Editorial Board Member for Human Resource Management, International Journal of Human Resource Management, British Journal of Management, Cross-Cultural Management: An International Journal, International Journal of Cross-Cultural Management, European Management Review and Career Development International.