“Does Creativity have a place in HRM”
As I set out to write an inspiring blog on this topic, or atleast that was my aim or motivation I first wondered what creativity was. I researched some articles involving complex definitions until I discovered a simple yet very relevant insight on creativity. Robert I. Sutton, the author of “Two Weird ideas that work” defines creativity as
“Using old things in new places, ways and combinations”
All major examples of creativity have not arisen from thin air, but have been a product of work that had already been done. If we take the example of IPod, the most innovative product of this decade, apart from the interface design and the user controls the remaining features already existed in the market and had been developed by others.
The implication this has for HR managers is that they essentially do not have to come up with entirely path breaking organizational processes or systems. Even small innovative practices which make the existing processes more efficient, simple career development and retention practices in the organization context which engage the employees can be deemed to be extremely creative. Through innovative engagement practices if HR managers can increase the engagement levels of workers even by 20 percent, the increase in productivity levels and consequently the revenue increase that can be attained are enormous.
Every creative idea needs resources to be tested and refined before it can be implemented and can add value. HR managers essentially face problems when it comes to having to test the ideas or in other words when they have to experiment their ideas. This stage requires elaborate experimentation and this is where HR managers are somewhat inhibited. The element of creativity disability comes from the fact that HR managers deal with people and experimenting our ideas on people, especially employees of an organization becomes difficult. Employees are the resources of the line managers and sparing them for HR initiatives or experiments is generally not taken kindly by most Line managers. While I was interning with GSK Pharma my mandate was to come up with feasible retention strategies that would considerably reduce the employee turnover. After collecting information about attrition data and conducting numerous staff attitude surveys and benchmarking studies I could come up with some rational recommendations. The question now I was left wondering was how I could test whether my recommendations would be successful and were feasible. One way was to take a test group of employees and implement these initiatives on them, similar to test groups from whom you take feedback on a product before launching the product in the market. However, this idea with respect to employees was met with staunch resistance from the Line functions. The idea of experimenting with employees and changing their benefit structure or reporting structure even for small periods and using them as guinea pigs for testing people interventions evokes strong emotional reactions from line managers.
I think the second biggest challenge that HR managers face when it comes to experimenting people interventions in organizations is emphasizing their relevance to other functions due to absence of concrete metrics in many cases that they can flash to show their business contribution. A sales manager or a marketing manager can always show the amount of sales he has done for the organization and consequently the revenues reflecting in the balance sheet because of his effort. Similar, is the case with functions like Finance, Operations etc. Because of this labeling of HR being Cost Centre, HR managers are discouraged from experimenting and testing their initiatives lest it could harm the business in any way, or may cause flight of talented employees.
I got an opportunity to listen to Leena Nair , Executive Director and HR Head of HUL India who had come down to XLRI for a leadership talk. She, while answering to a question stated emphatically that there is nothing in HR that cannot be measured. Every task that HR performs or every initiative that HR takes can be measured with respect to its contribution in business and every effort has to be made to measure its impact. I think this is one avenue in which the HR managers have been found lacking and consequently gives tremendous opportunity for HR managers in future to be creative and devise mechanisms to justify their presence by quantizing the impact of their people initiatives. By emphasizing their relevance to business as a profit center, HR managers could justify performing experiments and introducing people initiatives which could provide significant competitive advantage to the organization.
Mihaly Csikszentmihalyi , one of the leading authorities on the subject of creativity wrote that the creative process normally takes five steps
- Preparation – becoming immersed in problematic issues that are interesting and arouses curiosity.
- Incubation – ideas churn around below the threshold of consciousness.
- Insight – the “Aha!” moment when the puzzle starts to fall together.
- Evaluation – deciding if the insight is valuable and worth pursuing.
- Elaboration – translating the insight into its final work.
To cite one example of measuring impact of HR initiative creatively using the above illustrated process I would like to describe the case of a Pharma Company. The attrition rate in the company was very high and around 5 percentage points higher than the industry rate. The HR function wanted to reduce the attrition rate. But they also wanted to measure the impact of this attrition reduction in monetary terms. Therefore, before introducing any innovative people interventions they first took out an elaborate exercise of costing turnover. This was one of the creative exercises I have seen, because in practice there are very few companies which measure the cost of turnover and are able to concretely estimate the cost of employee turnover. The HR managers applied complex economic models to measure the cost of attrition. Once the cost was determined, they estimated how much money would be saved if they reduced attrition by 5 percent. They first showed these calculations to the CEO. Then they embarked on exercise to achieve the goal.
Problem Preparation: They set out on diagnosing the problem of attrition, they collected data from different sources, became immersed in understanding the causes of attrition. They analyzed data using various stastical tools to derive meaningful interpretations.
Incubation: After 3 months of tireless efforts they took a break and went to a resort for relaxing for 3 days. In the morning they would play and in the evening for three hours they brainstormed their ideas.
Insight: After 3 days they had a bunch of people initiatives that they were confident would reduce attrition in the company.
Evaluation: They presented these initiatives to the Top management, and tested in on a selected small department before launching it in the entire organization.
Elaboration: After achieving satisfactory results from the test group, they launched the initiatives in the entire organization. They collected data in terms of attrition in each department, attitude survey to gauge the moral after the initiatives and measured the improvements periodically. They tweaked the systems when they thought something could be done in a better manner.
After a year the attrition rate had reduced by more than 5 percentages. They calculated the cost saved because of this initiative. They presented this cost saved as the profit generated by the HR department. This profit was very high even though very conservative estimates had been taken
I would also like to cite the importance of environmental scanning to be creative. This is required to be a forward thinking HR manager. I was listening to a lecture by Prof. R.N Misra, IR head at Tata Steel. He says “HR can no longer be reactive”. He describes that his job is not to jump into action when a strike happens, negotiate with the union and try to pacify the workers. His job involves constant scanning of the environment, the country’s political environment, the economic condition of workers, and the changing union dynamics. By monitoring these he aims to stop any strike or problem in the plant from arising in the first place. The HR has to prepare for all contingencies, and this takes creativity and planning. You have to be able to recognize what is happening that may affect your employee population and your company’s ability to attract and retain those employees. And this skill takes creativity! It calls for you to get out of the general HR routines and think about the world, the problems in a different perspective. One needs to become more elastic to be on the road to become a better and creative Human resource Professional.
Ashwin Shetty
PMIR 2009-11
September 29, 2011
xlrisapphire
