HR Innovation – From Enhancement to Transformation

If you walk into AirBnB's San Francisco headquarters, you'll discover a workspace that looks more like home than work. With meeting rooms that look more like dining rooms (or even tents) and breakout spaces that look more like living rooms – not to mention a living green atrium stretching three floors high – it is a physical manifestation of AirBnB's mission of 'belong anywhere'.

AirBnB, which connects travellers with homestay-hosts in more than 34,000 cities around the world, is a leader in the new sharing economy. Its market capitalisation is already on par with Hilton. But as a digital disruptor, its human resources (HR) mandate is very different to a more traditional hotel chain.

"These are two extremes," explains Professor Nick Wailes, Associate Dean Digital & Innovation at UNSW.

"Hilton is a leading hotel chain with more than 300,000 employees and properties all over the world. AirBnB has around 1,600 staff and no assets whatsoever. But it does have all these people called hosts that effectively also work for AirBnB, providing services on its behalf. And I think this demonstrates the changing landscape of HR."

Indeed, AirBnB's HR function, known as 'employee experience' blurs the lines between marketing, communications, social responsibility and HR. It's experiential workplace essentially evokes the feeling of being a guest in someone's house.

"The physical experience of working for AirBnB actually mirrors the service you create – and as most of its staff are highly skilled, tech developers creating incredible user experiences, they need to understand in an instant exactly why they're doing what they do," says Nick.

Hilton's staff are more likely to be on the front line in customer service. "HR's job here is not to remind people what they do, but help them do their job much better. Plus they have the complexity of managing different hierarchies."

HR technology is only half the story

Nick recently spoke about 'HR in the digital era' at ICEDR's HR Innovation and the Future of Work forum in Sydney.

"When we talk about innovation and technology in HR, there's a lot of focus on tools that help HR optimise and do things faster. And I think that's missing the point," he explains.

"Yes, these disruptive cloud and mobile technologies are changing the way HR works. But they're also fundamentally changing the organisations HR works within – how they compete, how they're structured, what business they are in."

As AirBnB has found, HR can add real value by helping organisations respond to that transformation. 

Nick says HR has a new agenda for change. "Given most of the sectors we work in have already been digitally disrupted, the types of things we do now will not be done in the future. HR has a big opportunity – and responsibility – to help its leaders ask the right type of questions and develop the strategic skills, and it has to step back from the day to day to do that."

The point here is, don't be Kodak.

"Kodak understood digital, it saw it coming. But it focused on defending what it had, rather than asking what business it was now in – and how it could change to move to be that business."

Apply HR skills to new models

HR can also play a vital role supporting emerging innovations within bigger organisations.

"We're seeing many companies set up innovation incubators, corporate ventures, spin-off enterprises – and they're doing it rapidly," says Nick. "I think HR is missing the opportunity to be involved in that process."

Change management, winning hearts and minds, cultural shifts… HR has forged those skills through mergers and downsizing in previous years, and those people skills are exactly what emerging business units need.

"These new innovations are likely to become a core part of the business, and HR can enhance the possibility for success."

Nick points to NAB's Ubank and Telstra's Belong as examples of this. "Belong is effectively a competitor to Bigpond, but it's self-service, no contracts, entirely online. The model is very different, so the systems that sit behind it are also different. Ubank was an explicit strategy to find new ways of doing things – and you can see that in the way they manage their talent, it's a different culture."

So does corporate HR go searching for a role in sub-businesses like these? Nick says he'd certainly want to be involved.

"First, because it would be great for my people, developing their skills and getting them to think about how we could do things differently. But also, HR can then help to shape the emerging new entity. The lessons learned there can improve other aspects of the organisation."

'Plug and play' staff need instant onboarding

A new challenge for HR is the increasing fluidity of staff. Short-term contractors, freelancers and project partners need to act and think like an employee on their first day. "You need to very quickly communicate your values and strategy, and what it means to work there," explains Nick.

By creating a workplace that looks like the service they're selling, AirBnB has a head start here.

"This instant onboarding is a big challenge for HR, and I think they need to work closely with marketing to do it well. The clear, consistent value-based communication you share with customers can also be applied internally."

Catch the next wave: people analytics

While Nick admits HR data systems are more promise than reality at this stage, future HR professionals will need strong analytics skills to turn that data into valuable strategic insights.

"You can already show a manager what their team's productivity and costs are – and I can imagine the advantage that will give organisations who do it well.

And that brings us back to those tools and technology. From LinkedIn Recruiter and Workday to Kudos, they are enhancements rather than the end goal of HR innovation.

"It's not enough to think about the tools for today's job, you also have to think about tomorrow's job. What does the future look like for our organisation? How has the context changed? The tools are not going to fix that."

So if HR is to adjust to the new agenda, it needs to be proactive and show value during the transformation. Those traditional strengths – people and culture, enabling and change management – are needed more than ever.

Professor Nick Wailes is Associate Dean (Digital & Innovation) at UNSW Business School and Director of AGSM online.

To find out more about AGSM programs visit agsm.edu.au