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HR meets Silicon Valley

The field of HR is at the crossroads between high tech and tradition. When is the right time to muster the courage to venture something and when is the right time for stoicism and to remain 'Swiss'?

HR meets Silicon Valley

Pilgrims flock to Silicon Valley. The Mecca of innovation and disruption. This is where market movers and spoilsports battle it out en masse. European managers want to know the way the road ahead and look for inspiration, in the hope of taking a little bit of Silicon Valley DNA home with them.


Is successful DNA, a magical mix of culture, organisation, leadership, talent and skills – also known as COLTS – a guarantee of innovation? Each country and each company has a culture, an organisation, an interpretation of leadership, some talent and skills. But not every culture and not every organisation is conducive to innovation.

But what then do successful companies/start-ups and the 'made in Silicon Valley' business model have in common? On the one hand, they combine a culture of trying out, testing and prototyping. The order of the day is to be quick onto the market and test an idea instead of working out concepts for years on end, in the search for perfectionism. And on the other hand they have all succeeded in changing the rules of the game. Real Innovation requires disruption. There’s no "we’ve always done it this way" culture. Real innovation changes the habits of broader public. Airbnb, Uber and Facebook have done it.

Between innovation and tradition

It’s clear to see. Even our landscape clearly distinguishes us from Silicon Valley.
The mountains are part of the Swiss DNA, characterised as they are by tradition, agriculture and provincial, cantonal thinking.

The Swiss farmer is seen as a symbol of a rather conservative farming culture. But unfortunately, values such as precision, planability and stability which we hold dearly act as barriers to innovation and creativity. However, or perhaps because of this, Switzerland has always been opened to new ideas. For example, around 25 years ago, the Internet was discovered at the Geneva-based research organisation, CERN. In addition, overcoming physical and virtual mountains is a positive part of our culture.

The Swiss IT sector is even known to be extremely open-minded and innovative. When the first standardised ERP solutions came onto market 30 years ago, Switzerland, together with Germany, was seen as a pioneer, almost a role model. Swiss decision makers are open-minded and willing to take risks. And today, three decades later, we are experiencing the same thing: Switzerland is one of the most innovative countries, not only when it comes to the use of modern cloud products. For example, for the seventh year running, Switzerland has led the Global Innovation Index.

Is it possible then to be both old-fashioned and future-oriented? Yes. This is because Switzerland is used to being flexible. With four languages, countless dialects and its colourful 'Kantönli-Geist' (provincial, cantonal thinking), the country has a multi-cultural basis which represents an excellent breeding ground for innovation.

Cloud computing, as the future

According to the market researcher Gartner, in four years’ time there will hardly be any companies with a 'no cloud' strategy in the field of IT. Soon, cloud 2.0 will not be an option any longer, but a 'must have'.

The things that, in part, still make companies cautious with regard to cloud solutions are factors such as data protection and security. The fact that security flaws in one’s own company are often significantly larger than in the cloud does nothing to help, because the issue is a cultural change that cannot be enforced with a wooden mallet.

Switzerland shows its pioneering spirit here as well and in the cloud computing export market, it is in seventh place, just behind other major nations such as Japan and Deutschland.

Inhouse-operated software solutions are a species that are dying out, even if it will surely be decades until the last relic of this kind is replaced. Today, compared to cloud solutions, operating software inhouse is too expensive, too cumbersome, too inflexible, not scalable enough and as such, not profitable. Slow innovation cycles, high costs, work that is needed in order to maintain the systems and operational expertise that dies out are additional factors.

Some companies think that they are so special that a cloud solution cannot meet their needs. Far from it! Anyone who thinks that today, all customers will be happy with a uniform solution is wrong. High quality cloud solutions are in no way inferior to the individual adaptability of their on-site ancestors.

The magic of sharing

But let’s be serious: The cloud is only a technology. The sharing of software and computing capacity with many other users. But just switching to the cloud is not enough. It’s about changing the rules of the game and of course, technology can be a vehicle of that.

For example, Tesla is an excellent example for innovation and the courage to try new things. But as yet, Tesla has not managed to bring about real disruption, as the rules of the game 'car' are still classic, as they were before. The consumer decides on a car, the consumer buys or leases the car, drives it, sells it at some point and at the end of its life cycle, it is scrapped.

We are still in the world in which the car represents a status symbol, a 'want to have' impulse that provides the impetus to buy and in most cases, the cherished item stays unused for more than 20 hours a day. However, with innovative technology, a real change to the rules of the game will take place in the future and with it, a mobilisation 'of the masses' could take place. The charm lies in combining the concept of mobility with the technology of the self-driving car. An 'on demand' mobility service whereby, via an App a car can be ordered to stop in front of the house and transport the rider from A the B. The car would then travel back to a pool or its owner, or alternatively, it could be directly used by another 'User'. Payment would take place via an App. In such a scenario, the cloud concept of sharing would be implemented perfectly.

In general, 'sharing' is the magic word of today. People make their knowledge available to others (Internet, Intranet, blogs, forums). What you have too much of, or don’t need at the moment can be 'lent' to people for a period of time, like Airbnb. Alternatively, an individual no longer needs to own 'the thing', but purchases it on-demand. From the cloud. Looking at it this way, Tesla has not (yet!) reached the pinnacle of innovation.

How and what then can HR learn from Silicon Valley? Making the innovative spirit of Silicon Valley the paradigm for HR is a chance to be the employer of choice and remain competitive.

State of the art technology is a must for modern HR organisations. It is the business card of the company. This starts with the way in which staff record working time or expenses or what access they have to training opportunities.

However, the latest cloud technology alone does not bring HR innovation. The ingredients for innovation are culture, mindset, the courage to try new ways of working together. The magic word 'sharing' – what does that mean for HR apart from simply obtaining software from the cloud? Without doubt, a pioneer of this concept was the physical sharing of the workplace. Looking as it today, it is 'old hat', but 20 years ago, it massively changed the rules of the game in relation to the classical workplace. A member of staff comes into the office. He no longer has his own table, but obtains it from 'the cloud'. There are no family photos next to the PC, no Yucca palm in the corner. There is an abdication of ownership. Sharing in order to save costs is nothing new.

Let’s take a modern example from the world of payroll. Today, why should a company have its own payroll clerk? A shared service centre can take on this role and the company benefits on many levels. There are no risks in terms of staffing, fixed service level agreements, clearly defined services as well as guaranteed conformity with the law. These are just some of the examples of sharing salary expertise.

Another key topic for HR is knowledge management. Many companies run the risk of losing a lot of knowledge and expertise when the baby boomers finally go into retirement, especially as a result of generational change. Knowledge management is a prime example for the paradigm of 'sharing'. Sharing knowledge, making it available and at the same time, keeping it in the company when individual knowledge holders leave is a challenge that needs to be addressed with suitable technology and a shift in culture.

Silicon Valley shows us how to break rules and define new rules of the game. Here as well, there is food for thought for the field of HR. Do we still need assigned superiors or would a pool of coaches suffice? The staff of today are autonomous and self-organised. They obtain information they need for their work electronically. They do not need superiors, who either give them information or withhold it. The classical superior belongs in the analogous world, and in this form, is almost obsolete.

If we continue on this thread, we should also question the traditional rapport session with an employee. If we no longer need the conventional superior, then this relict has also served its purpose. We can replace it with situational coaching e.g. through mentors or project managers, so called 'temporary' superiors. The Elbdudler agency has even gone one step further and has allowed staff to determine their own salary. Here, the rules of the game have considerably changed. You could almost say that they are spoilsports. What does not exist, should not be? An example of real innovation.

Who says that meetings should be all about coming together and sitting at tables? Sure, the key thing is the verb 'to meet'. Perhaps we should take the term out of our vocabulary altogether. In some companies, conferences are held standing up. For example, in the context of agile project methods there is the 'daily standup meeting'. But can you do something related to sport at the same time as having a conference? That is nonsense you’d think? This is where Google breaks the rules of the game and makes use of the conference bike, which allows up to seven people the chance to ride a bike and meet. The advantage? Instead of our minds staying put in the real sense of the word, they are set to motion. And at the same time, it is a real physical trainer. Yes, we can!

HR departments are not just the custodians of the staff. HR can push innovation forward. HR plays a key role when it comes to reinventing a company. HR can and may reinvent itself.

Solutions from the cloud

Many of the HR systems which are on the market today are cloud based; this specially applies to the hotly contested market of providers of 'talent management solutions'.
The charm of cloud based solutions is obvious. HR benefits from short introductory periods, fixed calculable and transparent costs and it can kick itself free from what is often, the demoralising dependence on internal IT. The end user benefits from the latest user interfaces, mobile applications and almost self-explanatory processes.

But beware! The cloud is not just the cloud and a cloud based solution is not a synonym for innovation. If one considers the architecture of today’s HR solutions, two variants dominate the market. On the one hand, there are the so-called hybrid approaches in which companies 'dock' cloud based talent management to existing inhouse HR systems. On the other hand, there are the full-cloud based models in which the entire HR, including payroll, rein the cloud. Looking at things from a technological standpoint, the second variant is clearly the winner in terms of innovation, but is that really relevant?

For an individual member of staff, it is of no concern what IT basis is used to calculate their payroll, as long as it is correct and can be understood. For the HR payroll as well, it does not matter whether 'its' tool is in the cloud or in the basement of the company, it simply has to work.
The question should not be ' to go with the cloud or not to go with the cloud?', but which HR services does the company need and which ones should be provided by the company itself and which ones should be purchased. Of course, a provider of HR services would probably insist on cloud based software in order to keep its own operating costs low. But that’s only the technology and not the essence of the services that are offered.

Another aspect relates to the functionality of the software used as a basis and the processes which can be mapped therein. Is the software geared towards a conservative world of supervisors, employees and clearly defined processes? The performance interview with an employee is a wonderful example of this. Does the software require a clearly defined superior in order to map the process of an employee performance interview? What happens when superiors become dynamic coaches or when then fixed meetings become spontaneous checkpoints?

Time and again, HR departments are subject to the constraints of software solutions and real innovation is nipped in the bud. Of course, this should not be a plea against IT-based HR solutions but a call to see technology for what it is: An enabler. Nothing more and nothing less.

An ode to Switzerland

We live in a country with very strong values and a healthy, democratic political structure. This provides Switzerland with a certain sense of peace and stability.

At the same time, we benefit from a colourful multi-lingual culture which shows us there is not just one way which is the right way. This guards us against forming stereotypes.

A culture of openness in the mountains should not be seen as an insurmountable obstacle, but as protection and at the same time, a challenge. With this in mind, considered culture is one of Switzerland’s strengths and this must also be upheld in a hi-tech age.

We maintain a family culture where values such as honesty and common sense are still lived out. Switzerland manages to perform a tightrope walk between digitisation and the preservation of tried and tested ways of doing things. For example, we protect our culture of farming with high subsidies, but despite this, in terms of development we do not stand still.

We are in a very comfortable situation in allowing ourselves the spirit of Silicon Valley. It requires the courage to try out new things. It also requires the courage to remain conservative and 'Swiss'. Switzerland has this courage.

Published: 4. December 2017

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