Linking Culture to People Strategy and the Systemic HR Imperative

Photo by Austin Chan on Unsplash

Matt Collier is a Senior Industry Fellow at FORWARD, The RMIT Centre for Future Skills and Workforce Transformation — with director Peter Thomas — writing on how to incorporate culture- and capability-building initiatives into broader HR/people strategies in the context of emerging technologies, shifting employment trends, and rising expectations on leadership.

Some of history’s great discoveries started with a happy accident: Penicillin, X-rays, Post-It Notes, Teflon, and even Velcro. Take Velcro, for example. Swiss engineer George de Mestral invented it in 1941 after returning from hunting and noticed burrs on his clothes and dog’s fur. He examined the burrs under a microscope and was inspired to create a fastening device based on their hook-and-loop mechanism.

Recently, one of the authors helped a client revamp its customer experience (CX) strategy. Early in the engagement, it was clear that the client’s values would be key to elevating the strategy and making it real and relevant for employees. The formal values, tweaked to maintain client confidentiality, were something like passion, imagination, and expertise — forming the mnemonic PIE, which is rather memorable.

As we got further into the project, we came across the EPIC Awards, an annual recognition programme to spotlight employee contributions. It turns out these awards were based on the PIE values, but with collaboration as an additional category. This discovery led the project team to recommend formalising collaboration as a fourth value and to feature being EPIC at the core of the CX strategy.

For employees, this would be the main ask, using the play of words to highlight living the ‘EPIC’ values and creating ‘epic’ customer experiences. For leadership, creating the conditions for employees to be EPIC would be the key to unlocking CX ambitions, thus linking CX to culture and the employee experience (EX). This framing gave rise to a series of actionable EX and CX initiatives that had previously been elusive.

Happy accidents like this can abound in organisations rich with legacy and distinctive characteristics: a concept, a turn of phrase, a visual, or some combination of these things. Oftentimes, discovering or rediscovering their meaning can unlock possibilities and gel together otherwise loosely connected people, culture, and business growth initiatives much in the same way that a keystone holds up an arch.

Finding these gems requires an approach that gestures to what author Josh Bersin has called Systemic HR. Systemic doesn’t necessarily mean new. It simply means taking stock of the whole ecosystem, including existing policies, programmes, systems, and constructs. And then organising their components into a robust architecture that creates narrative and enables more sophisticated solutioning — at scale.

Readers of this series wouldn’t be surprised. We’ve been progressively making the case for such an integrated, design-led, and people-centric approach to culture across four essays:

• Essay 1: Building Future Skills in the Post-Pandemic Era. Put simply, culture is context, and context is a great teacher. In this essay, we tame the complexity around culture and argue that being much more intentional about shaping it can also build capability.
• Essay 2: Framing the Stakes of Culture. Culture has ripple effects at scale and for better and/or for worse. In this essay, we look at workforce transformation from a human lens, the economic upsides of getting culture right, and the public health costs of status quo.
• Essay 3: Defining Culture with Enduring Ideals. Culture is an umbrella term that means many things: risk culture, customer culture, learning culture, safety culture, etc. In this essay, we explore the distinction between these broad characterisations and enduring ideals.
• Essay 4: Engineering Culture with an Integrated Framework. Culture is arguably one of the wooliest topics in business. In this essay, we show how to design and engineer a cultural ethos that becomes second nature, shaping how employees ‘show up’ to everyday work.

In this essay, the fifth in our series, we will explore how culture manifests through and can be reinforced by the people strategy: who will be doing the work; what will change about their work; when, where, and how they will work; why their work matters; and how leaders and people managers must adapt amidst all this change. Topics include:

• Org Design: Who will be doing the work? Skills Intelligence Will Power Dynamic Talent Allocation.
• Job Design: What will change about their work? AI Enablement Will Be the New Digital Transformation.
• Purpose: Why does their work matter? Deeper CX Will Be Built by Culture, Capability, and the Employee Experience.
• Talent: How will leaders and people managers adapt? Whole Person Support Will Be Key to Equipping Future Leaders.

The topics were curated not only because they cut across the HR lifecycle, but also because they present unique opportunities in 2024 given emerging HR tech and shifting employment trends. For each one, we’ll provide a bit of context, clarify the opportunities, reference thought leadership pieces, and draw connections between typical HR functions and the Integrated Culture Framework we proposed in our fourth essay.

It’s an exciting time to be a CHRO or part of a HR leadership team, particularly for those keen to take on big, systemic challenges and shape the future of work as governments, academics, and NGOs are likewise grappling with these societal-level questions.

Org Design: Who will be doing the work?

Skills Intelligence Will Power Dynamic Talent Allocation

The “Great Resignation / Renegotiation / Reshuffling” signifies a departure from traditional workforces comprised of full-time, permanent employees with a mix of contingents. Going forward, it’ll be full- and part-time workers, shared jobs, contingents, freelancers, and gig workers.

Getting this right means getting beyond FTE approximations and gaining much clearer insight into what skills are needed, how many are needed, and the best way to source and deploy them. Whilst this is not necessarily a novel undertaking for seasoned HR leaders, emerging AI-powered tools have opened significantly new possibilities.

There are two things to consider here. First, these AI capabilities are increasingly coming as part of a package within existing HRIT systems such as Workday and productivity suites such as Microsoft 365. This means HR teams now have access to much more powerful tools than ever before, thus removing previous limitations around having clunky tech and/or needing to procure and integrate yet another tool.

Second, as powerful as these tools may be, they are no substitute for visionary leadership — the kind that needs to make tough calls that only humans can make about strategy, structure, key personnel, processes, prioritisation, resource allocation, etc. These are typically the domain of what’s known as organisation design.

Unfortunately, as a matter of expedience, org design can be reduced to merely updating org charts and/or conducting periodic reorganisations. This can create misleading impressions that the work has been done and thus foreclose opportunities that a more detailed, deep, and proper org design process might offer — particularly when paired with all these emergent AI-powered tools.

There are two key opportunities here:

1. Leverage AI capabilities of existing tools. As Josh Bersin writes regarding MS Viva’s tools on skills intelligence, employees are now able to build their skills into their MS Teams profile in the same way as they’re used to doing on LinkedIn and, given the partnership between Microsoft and LinkedIn, this is expected to be a powerful combination, particularly because MS Teams is already in the flow of everyday work (i.e., no need to log into Workday or some other skills tool). Furthermore, MS Viva is courting an ecosystem of partners and interfacing with systems of record such as Workday.
2. Commission deep org design. Shifting to a capability-led organisation requires that leaders are clear on what org capabilities they seek to build, which ones will be differentiating, and the implications on the structure and roles required to manage such a flow-to-work operating model. McKinsey research shows the clear benefit of this kind of model and flags some of the key considerations of adopting it, including which types of work it’s best suited for, the kinds of talent to consider pooling, how to deploy that talent, and how to decide when/how to do so.

Taken together, these two investments will give HR and business leaders the insights and mechanisms to deploy talent dynamically in service of the highest-value business opportunities. This kind of agility has long been sought after, and now it’s in closer reach than ever before. But realising its benefits requires other people/culture considerations from a Systemic HR perspective:

• Leadership. If talent is not owned by traditional hierarchies, then leaders and people managers will have to be much more open-minded about sharing talent for short-term and developmental assignments. This requires a sophisticated appreciation of and commitment to the organisation’s purpose. HR teams will need compelling engagement campaign for its leadership team as well as a set of carrot-and-stick incentives to ensure decisions are made in service of higher-order ambitions, not near-term staffing constraints.
• Strategic Workforce Planning. Having line of sight into skills gaps enables much more informed choices about sourcing requisite talent. Scarce, high-calibre talent will be increasingly be found in gig workers. Effectively on-boarding and activating gig and/or other nontraditional worker types relies on clear ways of working. HR teams will benefit from a panel of providers that know how to screen for fit and on-boarding materials that articulate cultural expectations.
• Performance Management. In a capability-led business, the org-level capabilities are clearly articulated and, from an execution perspective, they are either being built, enhanced, and/or exploited in service of strategic priorities. HR teams will need more robust tools and processes to support goal-setting — arguably on a much more frequent basis than they typical annual cycles — to ensure fair performance appraisals and development plans.

The HR tech space is exploding with innovation. New tools offer skills inventories, talent marketplaces, performance management, personalised L&D, and more. When paired with deep org design, clear goal setting, and on-demand resources from the gig economy, leaders will be able to be much more intentional about deploying capacity and/or capability in service of their transformation and business growth agendas. This is a game changer.

Job Design: What will change about their work?

AI Enablement Will Be the New Digital Transformation

Generative AI is poised to radically disrupt the world of knowledge work, even as organisations continue to grapple with ongoing — and arguably unfinished — digital transformations. With AI tools widely accessible, most people have at least tried ChatGPT at work and switched-on teams have likely explored operational use cases.

At the same time, given the hype around generative AI, many CEOs are insisting that AI “be implemented” within and across their businesses. Accenture’s North America CEO told Forbes that most CEOs are focused on this, and Accenture has a 3-year, US$3 billion plan to upgrade its own capabilities. Indeed, the end-state will no doubt involve AI in most if not all aspects of organisations’ operating models.

Examples will likely include AI-powered chatbots handling routine customer inquiries and AI augmenting CRMs and sales enablement more broadly, with personalised outreach and tailored solutions. Whilst these kinds of operational use cases may get more attention, there is another and potentially more crucial enterprise use case that merits HR leadership: what are the implications of the workforce having ready access to a burgeoning marketplace of generative AI tools?

There are two key opportunities here:

1. Experiment with role-based genAI use cases. Experimenting with role-based AI use cases can lead to significant improvements in efficiency, creativity, and job satisfaction. However, a first-of-its-kind study by BCG and Harvard looked at the role of consultants and found that genAI both creates and destroys value and that providing training on AI tools can create a false sense of competency. Perhaps one of the most profound questions posed: how can humans assess work produced by AI tools on subjects that they themselves have not mastered?
2. Build institutional capability and monitor outcomes. Whilst the upsides are clear, there are also risks, paradoxes, and uncertainties. This calls for something more than a one-off initiative or programme. Launching an AI lab for everyday employees challenges organisations to democratise access to AI technology and make it a part of the everyday work environment. Employees would be able to interact with AI tools, learn about their capabilities, and discover ways to enhance their daily tasks. At the same time, organisations could monitor, assess, and capture learnings to feed back into an broader strategy.

These two investments offer a test-and-learn approach that manages risks, deepens capability at multiple levels, and creates a feedback loop that informs broader workforce strategies. Because we are advocating experimentation with AI tools in the context of everyday work, not just operational use cases, below are salient people/culture considerations from a Systemic HR perspective:

• Employee Engagement. Beyond operational efficiency, generative AI can significantly enhance employee experiences. By automating or at least facilitating mundane tasks, it allows employees to focus on more creative and fulfilling work. HR teams will need robust engagement platforms and surveys to track job satisfaction and the effectiveness of systems and processes — all against the backdrop of cultural indicators such as purpose, values, ways of working, etc.
• Personalised Learning. Generative AI brings the prospect of tailored training paths, reshaping how knowledge is disseminated and skills are acquired in the workplace. This brings opportunities to use learning in the flow of work to contextualise an organisation’s principles, values, and ways of working. HR teams will need to clearly define skills, capabilities, and strategic priorities in order to train whatever AI tool they may use to power this kind of learning.
• Reward and Recognition. Employees who master the use of AI in service of their work will become much more valuable, particularly in the near term. This raises novel questions around assessing performance and overall value to the organisation amidst an era of change and transformation. HR teams may wish to review their reward and retention schemes to ensure competitiveness for something top talent will undoubtedly expect to be recognised.

There is no question that work — knowledge work in particular — is on the verge of a transformation the magnitude of the industrial and information revolutions. The exact contours of the change are still being shaped, but we know enough now to know that AI will automate routine tasks, create entirely new skills, and augment human creativity.

This raises the stakes for HR, which has a leadership role in managing this change at a workforce level, and a transformation imperative at the functional level.

Purpose: Why does their work matter?

Deeper CX Will Be Built by Culture, Capability, and the Employee Experience

Stakeholders and regulators are increasingly scrutinising purpose and culture, with a focus on customer and community impact. This is also reflected in the expansion of ESG reporting.

Customer experience (CX), not unlike culture, is one of these topics that means many things to many people. Because it’s in vogue, most savvy professionals will find some way to cast their initiative as one that benefits the customer. But what is the CX? Literally, it’s the experience of a customer using your product or service. Those who design, develop, and deliver the products and services are directly responsible.

But they don’t operate in a vacuum. An organisation’s offerings are the sum total of contributions from across the enterprise, including and especially back-of-office functions such as legal, compliance, risk management, sales training, etc. Even functions like finance, procurement, security, and corporate IT ultimately have an impact on CX because they either enable or inhibit the work of those closest to the customer.

Indeed, many organisations have matured practices recognised as core to the daily work of CX teams such as monitoring customer satisfaction through Net Promoter Score (NPS), building and refining UI/UX flows, running journey mapping exercises, and maintaining loyalty programmes. But the fact that those things exist is because the rest of the organisation has contributed to, endorsed, or otherwise facilitated them.

This makes CX an enterprise-wide undertaking, not one that’s borne solely by product or customer-facing teams. That being the case, what are the implications for those who also have an impact on CX, albeit indirect? This is where customer-centric mindsets, behaviours, and ways of working can bind together the organisation in service of its purpose, which surely references the customer in some way.

Two opportunities here:

1. Focus on culture and capability. This opportunity is a first amongst equals in this essay since it is the main thrust of our entire essay series: that a carefully-architected culture initiative can also double as a capability-building initiative; and that aspirations around customer centricity, sustainability, and social impact are paramount. Investing in design thinking, for example, to build capability whilst also embedding its characteristic mindsets and behaviours creates a common language, broadens CX practices, and enhances overall performance.
2. Make employee experience a top priority. Many organisations aspire to be customer obsessed, to delight customers, to put customers first, etc. But it is tough to imagine a workforce that is overworked and overstressed delighting anyone. Encouraging back-office functions to focus on enablement and apply the same kinds of CX practices to internal use cases can enhance the overall employee experience (EX), build goodwill, and drive customer outcomes.

EX and CX constitute a duality of sorts. The former represents one of the main aims of most organsiations and the latter represents a crucial enabler — one that is too often paid lip service or overlooked altogether. By embracing the duality and investing in both, leaders can differentiate their organisations with customers and employees alike. Below are salient people/culture considerations from a Systemic HR perspective:

• Ways of Working. The T-shaped model has long been used in the L&D space. If the ‘top of the T’ represents the broad skills you want all employees to have, then it can be a container for design-led ways of working that come with the disciplines of design thinking, lean start-up, and agile development — all of which have the customer-centric ethos we’ve been advocating in this series. HR teams can build a common language and basic sensibility here, laying the foundation for deepening CX capabilities over time and across the enterprise.
• Hybrid. The pandemic accelerated work from home (WFH), forcing leaders to rethink long-held assumptions and proving that remote work is possible at scale. HR teams can equip employees to participate in and contribute to remote, in-person, synchronous, asynchronous, and/or mixed settings as described by MURAL, a leading virtual collaboration space. Without the right capabilities, tools like this are just a blank canvas; but when employees know how to fully leverage them, they can be a source of competitive advantage —after all, the work is where the work is, not necessarily at ‘work’.
• Wellbeing. Unfortunately, workplace initiatives like meditation apps, yoga sessions, resilience seminars, employee assistance programmes, and once-yearly ‘wellness days’ masquerade as though they are taking care of employees. A recent study by Dr. William J. Fleming, an Oxford researcher, shows that they have little benefit, as they don’t address the underlying sources of workplace stress. HR teams that want to raise the bar here will give employees real autonomy to choose work settings that suit their productivity and personal needs and build support systems around this as a priority, not an organisational inconvenience.

Herb Kelleher and Sir Richard Branson, both leaders in a tough business (i.e., the airline industry), have said some variation of: take care of your employees; they will take care of your customers; and your customers will take care of your shareholders. That is the same logic we’re relying on when we say that deeper CX will be built by way of culture, capability, and the employee experience, all of which are intertwined.

Talent: How will leaders and people managers adapt?

Whole Person Support Will Be Key to Equipping Leaders

These days, leaders face tremendous pressure to deliver profitable growth balanced with social impact; drive customer centricity in an era of emerging technology; and lead with care and empathy amidst economic, political, and social poly-crises. And this applies not only top leaders, but also people managers and rising talents.

All of this, of course, is playing out amidst the advent of generative AI, which has been a through line in this essay. Spend a few minutes Googling the effects of AI on leadership; try a few variations on the search terms; and see what you can turn up. The results will not be impressive. This is, as yet, a relatively uncharted area.

One of the search results does stand out is an interview conducted between the business journal at the University of Pennsylvania’s Wharton School and David De Cremer, author of Leadership by Algorithm: Who leads and who follows in the AI era? In this conversation with Wharton, De Cremer offers an instructive distinction in the oft-drawn difference between leadership and management.

Management, he posits, deals with matters that are more routine — stable, predictable, repeatable — and that this is what AI is well suited for in the near term. Leadership, on the other hand, involves setting a vision, rallying people around that, and making judgment calls that only humans can make in view culture, values, and real-world contexts.

Leadership is about dealing with change. It is about making decisions that you know are valuable to humans. You need to understand what it means to be a human, that you can have human concerns, taking into account that you can be compassionate, and you can be humane. At the same time, you need to be able to imagine and be proactive, because your strategy in a changing situation may need to be adjusted to create the same value. You need to be able to make abstraction of this, and AI is not able to do this.

In our second essay, we wrote that future-of-work language unfortunately tends to imply newness, novelty, some degree of sophistication, and even fancy tools and technology. But as De Cremer suggests, a lot of what people need to do to become better leaders and prepare for the future of work, which is arguably already here, simply has to do with getting better at the basics of being human and working together.

Two opportunities here:

1. Explore new models for leadership development. A few years ago, a group of international researchers looked into why humans weren’t making more progress against the U.N. Sustainable Development Goals. Their research resulted in the Inner Development Goals (IDGs), a science-based framework for human skills and qualities — things that can be trained and nurtured, respectively. Because they were developed in the context of the SDGs, they offer universal applicability across sectors and hold promise as a taxonomy for how organisations might develop leaders in a more holistic manner.
2. Make feedback a habit and tie it to productive capacity. Even if an organisation has a robust, future-ready leadership programme, one of the challenges is offering it to wider populations (e.g., people managers) in an affordable way that maintains efficacy — and its human touch. OnLoop, a Singapore-based startup, is using generative AI to make feedback a habit and to contextualise it with skills, values, and ways of working. Not only does the app support goal-setting and tracking, but it uses AI to synthesise unstructured feedback, helping improve quality and utility; it also encourages daily wellbeing check-ins that spotlight productive capacity for individuals and teams.

These two interventions, whether separately or paired together, present a powerful and scalable way to equip leaders, talents, and the workforce — and to do it from a whole-person perspective in a much more meaningful way, particularly if feedback is based on values and links behaviours to reward outcomes. Below are salient people/culture considerations to tie this all together from a Systemic HR perspective:

• Talent and Succession. Most organisations identify ‘talent’ and use that for the basis of succession planning. Talents tend to get more access to senior leaders and dedicated assessment and development centres. From a succession planning perspective, this is important. However, designating some and not others relies on the assumption that the selection process is valid and free from bias, running the risk that non-‘talent’ talent is overlooked, underutilised, and/or demoralised. HR teams may wish to review their talent programmes and processes in light of a rapidly shifting skills landscape.
• Career Planning and Growth. Ryan Roslansky, LinkedIn’s CEO, revealed at their 2023 Talent Connect Conference the average job description’s skills have changed by 25% in the last 8 years and, based on projections, they expect it to change 65% by 2030. And their data shows GenZ as significantly more prone to switch jobs. With these trends, and as jobs change from being defined by titles to being defined by skills and collections of tasks, HR teams might review how they support career planning and growth. This has implications on everything from job satisfaction to retention to institutional know-how.
• Coaching. Viewers of Ted Lasso, the sports-comedy drama series, will remember when a psychologist came on the scene, creating a jarring juxtaposition between the rough-and-tumble soccer players and the softer reality of their humanity. In business, executive coaching is a common resource, helping leaders get more in touch with themselves and their humanity through mind-body techniques such as breathing, meditation, and grounding exercises. HR teams may explore innovative ways to affordably scale this kind of high-touch support that heretofore has only been available to the most senior leaders.

As the CHRO of an Australian utility company put it to one of the authors, “in my 30-year career, I have never seen such complex issues being pushed so far down the leadership chain. What we’re asking of people managers and mid-level leaders would have been unthinkable in the past. And leadership development programming has not kept pace.”

Adopting a whole-person perspective, including the woolier aspects, and making it much more broadly available will unlock the human potential needed for leadership in the AI era — at all levels.

Big Picture for CHROs and HR Leadership Teams

We’ve covered quite a bit of territory since the top of the essay where we referenced happy accidents and the opportunity they present to uncover a unique institutional characteristic that gels everything together.

Arguably the best vehicle for that ‘gem’ is the employee value proposition (EVP) since it represents the organisation’s articulation of the value exchange between what it offers and what employees bring — and what they will experience in its employ, whatever form that may take. A compelling HBR article from January 2023 posits that EVPs are comprised of four interrelated factors: material offerings, opportunities to develop and grow, connection and community, and meaning and purpose. In one way or another, we have touched on each in this essay.

Because of the systemic nature of EVPs, their reliance on more sophisticated leadership at all levels, and the fact that they are influenced by the wider operating environment, CHROs might consider engaging stakeholders beyond their executive committee and business leaders as they look for inspiration.

• Engaging the Board and Non-Executive Directors (NEDs). NEDs bring a broad range of experiences and vantage points. CHROs can gain a deeper understanding of global workforce trends, operating environment risks and challenges, and innovative talent practices from their NEDs. More than seeking advice, this is about creating a collaborative space for NEDs to actively shape the people and culture strategy and own their role in enabling and executing it.
• Participating in global forums. The World Economic Forum and similar organisations are focal points for discussions on how AI and other technological advancements are reshaping industries, work practices, and employee wellbeing. By engaging with these entities, CHROs can not only bring external insights back to their organisations but also influence global workforce policies and practices.
• Partnering with governments and regulators. This includes advocating for educational reforms to prepare the future workforce, shaping re-skilling and up-skilling initiatives, and ensuring that the transition into an AI-powered era is equitable and inclusive. By actively participating in policy-making, CHROs can help mitigate the in-market challenges posed by these transitions (e.g., potential workforce displacement), whilst building goodwill with their stakeholders.

Engaging with boards, partnering with influential NGOs, and collaborating with governments are not just opportunities to develop case studies and demonstrate proofs of concept, but essential components of CHRO’s roles in shaping a workforce that is agile, prepared, and equipped for the realities of a post-pandemic, AI-driven era.

Summary and What’s Next in this Series

This is the fifth essay in a 6-part series exploring culture in the post-pandemic era. In the first and second essays, we set the scene and framed the stakes, respectively. In the third essay, we detailed cultural definitions and distinctions. In the fourth, we proposed a framework for culture.

In this essay, we explored how culture manifests through and is reinforced by four aspects of a future-ready people strategy:

• Org Design: Who will be doing the work? Skills Intelligence Will Power Dynamic Talent Allocation. New AI-powered tools are at the fingertips of HR teams and, when paired with deep and proper org design, they present significantly new opportunities to match skills to strategic priorities. HR teams will want to consider implications on leadership development, strategic workforce planning, and performance management.
• Job Design: What will change about their work? AI Enablement Will Be the New Digital Transformation. The availability of AI tools to everyday employees opens possibilities for productivity, creativity, and job satisfaction, together with the necessary sound risk management as humans and machines collaborate. HR teams might revisit plans around employee engagement, personalised learning, and reward and recognition.
• Purpose: Why does their work matter? Deeper CX Will Be Built by Culture, Capability, and the Employee Experience. Employees from across the enterprise, not just those closest to the customer, are responsible for great CX; thus, the extent to which they are equipped and enabled to do that links CX and EX together. HR teams will want to think about how to enhance ways of working, hybrid practices, and wellbeing offerings.
• Talent: How will leaders and people managers adapt? Whole Person Support Will Be Key to Equipping Leaders. Whilst culture is typically thought of at the org level, it is also true that culture is experienced at the team level and in interactions with leaders and people managers, both of whom face more expectations than ever before. HR teams will want to review approaches to talent and succession, career planning, and coaching.

Culture and capability runs through these systemic opportunities. Visionary HR leaders will be tackling these and reinventing the profession, not only as a means of deriving competitive advantage, but also to lead and inform policy debates with governments, professional associations, academia, and NGOs on shaping the future of work.

That is exactly what we are doing at FORWARD, the RMIT Centre for Future Skills and Workforce Transformation. Our final essay in this series will outline an implementation strategy using a top-down, bottom-up, and middle-out approach.