The Importance of Building Internal Capability

As eluded to in a number of my previous blogs, organisations are now beginning to understand the commercial value that having a strategic People/HR function can bring – whether that be utilising modern day technology, streamlining existing processes or engaging their workforce to a higher standard. However, for a lot of the HR leadership teams that we work with, this is one of the first times that they’ve ever gone through change/transformation therefore, many become over reliant on external partners, as well as taking unknown risks. This blog is aimed to discuss the importance of balancing external support, as well as building/utilising knowledge that exists in house.

What is happening at the moment?

If you take a look at many of the existing People transformation programmes I can guarantee that most of the senior teams leading the initiatives, will have relied on some kind of external support – and why not? What’s wrong with getting external support? Absolutely nothing… my organisation provides an external support service however, its becoming more frequent that the success of projects lies heavily on the external partners shoulders.

Current project teams tend to be made up of a blend of external consultants, contractors and also employees from the business (typically spending 40%+ of their time on the project). Usually the early diagnostic phase is completed by the external partner. Typically, they will come into an organisation with a fresh pair of eyes and conduct a form of business analysis – whether that be a SWOT analysis or another method. The data captured is then presented back to the organisation and recommendations are offered – this part of the process is great, having someone not associated with the business who can give some clear feedback, can be really useful. However, it can also be slightly subjective. I would also argue that having an internal programme manager at this stage could be useful, as it will allow them to understand things end to end.

Following on from understanding some of their pain points/areas for improvement, organisations will typically prioritise one area e.g. HRIS, TOM or something like Engagement. Once this has been decided it’s time to build an internal business case and to get budget sign off. Again, some organisations look to use external partners during this stage – many HR leaders still have to fight to get budget signed off therefore, having an external party who can build a robust business case, with clearly defined benefits realisation is useful.

Once the business case has been signed off it is now time to start building the team for both the design and implementation phases. This is where many organisations fall down for me, they tend to become too reliant on external partners to deliver a project into THEIR business! But what are the issues with this?

• Culture – every organisation has its own unique culture; typically, external partners will not get a feel for what each day brings for a business. So how can you expect them to deliver effective change without understanding potential cultural barriers?

• Change and communication – a real weak link in some of the larger consultancy’s. Not too sure if they feel it is not their responsibility or they don’t feel it is important however, this is where so many projects fail. Why? Because external partners don’t typically support with effective change and communications. Take a HRIS project for example, it’s great having a new system and new processes but the reality is Joe Bloggs comes into the office on Monday and has a brand-new system in front of him but isn’t clear on the value/how to use it.

• What’s best for the organisation – External partners do some fantastic work and can be a real asset to organisations. However, just because something worked in one company doesn’t mean it will in another. This is another common issue that is seen due to not having a strong internal team. External partners may exploit your vulnerability as a client to maximise profits or they may do this without realising. Non the less it is crucial that you have an experienced team in place who can challenge the external guys.

Moving through to BAU… This is an area that organisations still under value as they go along their project journey. During this phase adoption of the new model/system/structure should be clearly communicated to all stakeholders. However, usually it isn’t. So many businesses transition through to BAU with their new processes or their new systems without taking their people on the journey with them, this then has an effect on the measurable benefits that have been defined in the business case. External parties are typically beginning to withdraw consultants from the project if they haven’t already and the support offered during this stage is not to the same level as during the implementation.

So, what would my advice be for clients looking to go through a HR transformation?

A lot of you are probably thinking “he works for an external partner, why is he saying to build up internal capability… 0 business acumen”. For me personally successful project teams will be made up of both internal and external stakeholders however, from my experience there seems to be too much of an emphasis on external support. I’ve made some points below that will be of interest…

• Knowledge transfer – it’s crucial that when working with external parties you grasp as much of their experience/knowledge as possible – these are really intelligent people. Partners not willing to transfer knowledge and looking to hold on to their ideas are probably not the type of people that you want to work with.
• Internal team build – With the internal team build it’s important to have input from the business, guys who understand the culture and ways of working – this will make your change management easier. However, if you can also build a team of project professionals that can spend 100% of their time on the project itself then that’s great. It’s then a case of understanding the gaps in experience and looking towards external partners.
• Requirements Capture – along with change and communications this is one of the most undervalued parts of HR change projects. I’m sick of seeing “does anyone have recommendations for HR systems” on LinkedIn and everyone replying “Workday”. Understand your unique business requirements, what do you do at the moment, what are your needs, what are the benefits that the change will bring etc. JUST BECAUSE IT WORKED FOR SOMEONE ELSE, DOESN’T MEAN THAT IT WILL WORK FOR YOU.
• Change and communications – It’s a point that I have raised a few times. Change and communications is key for project success. Allowing your workforce to understand what you are looing to do and why you are doing it is important and will improve your chances of adoption. So why do companies under value the change and communications plan?

External Partner should never be the reason that a project fails, it’s not their project, their budget or their reputation on the line. Build an internal team that will drive your transformation however, also be open to external support that is available, as I have no doubts that you will require some advice along the way. Do not force your existing team to lead on the project, they are probably already over stretched, allow them to input however, as they can offer advice on the culture of the business. Don’t forget about the change and communications or understanding your requirements and finally ensure that you define your key benefits!

As always we’re keen to learn more about some of the challenges that you may have faced/are facing as you go along your HR change journey. Feel free to share your story/learn about someone else’s… contact details below.

Harry Wright

Client Relationship and Delivery Consultant

Réncái Group

07341 662232