Bold. A new era of strategic HR. Wersja angielska - ebook

About BOLD: A new era of strategic HR

All successful companies have one thing in common – a group of fantastic people. But how do you find, develop, and retain these people? BOLD: A NEW ERA OF STRATEGIC HR answers exactly that and much more, and is well worth reading for anyone who wants to learn more about organisation and leadership. I’m proud of Spotify’s HR team and how they’ve helped build Spotify into what it is today!

Daniel Ek, Founder and CEO, Spotify

BOLD: A new era of strategic HR is a must-read for all of us working in, or being educated to work in, HR. The book is based on insights and lessons learned from a leading HR team. In times of rapid, complex change, the HR function needs to take on a new role in order to develop the business, the organisation, the culture and the people. Here we get a good mix of inspiration and practical examples of how we as HR managers can contribute to the company’s development in a completely new way!

Hanna Fager, Chief People Officer, Volvo Cars

The pandemic has thrust HR into the spotlight and given the function the opportunity to lead in shaping the new model of work. To do this, HR has to embrace data and digital. It must deliver for leaders and employees alike. Above all, HR must be bold. Spotify’s HR function, under the leadership of its chief people officer, Katarina Berg, is setting the template for others to follow. With BOLD: A new era of strategic HR, Katarina and her team build on their visionary Spotify HR Blog, providing a rich vein of insights on the practice of a leading-edge HR function and how it delivers value for the employees and the business.

David Green, Managing Partner, Insight222
Co-author of Excellence in People Analytics, Host of the Digital HR Leaders podcast

In 2005, there was a famous article titled “Why we hate HR” that shook some corners of the industry and forced many of us to relook and rethink the way we are serving. When I first met Katarina in 2019, I immediately recognised a rebel and a pioneer in her through how she and the amazing HR team at Spotify are redefining our space. Their rock-and-roll approach has been hugely inspiring to many and I’m grateful that we now get an even deeper look into their fascinating methodology.

ONG CHIN YIN, Chief People Officer, Grab

Finally! A practical (and entertaining) guide to building the world’s best culture-first organisations, as told by the people leaders who have actually done it. Toss out your dusty, antiquated HR playbooks. This book replaces ‘best practices’ with a renewed sense of inspiration to create the culture you’ve always wanted!

Katelin Holloway, Founding Partner at Seven Seven Six, People & Culture Exec.PREFACE

The seed for this book was planted at the beginning of my career, but the ideas presented here have developed during my many years as an HR professional. I experienced a rigidity in HR education, and that feeling has been exacerbated by the fact that students, in those countries that have an HRM degree, are still learning what HR is from the same textbook that I used many years ago. I have also noticed that those of us who want to think outside the box, who see an opportunity to lead the way and bring the practice into the new century, meet resistance. Is this because of reluctance? Because of a lack of courage? Or perhaps both.

I believe that anyone who wants to work successfully in HR today must dare to stand out. It is obvious to me that many in my professional network, colleagues I meet at conferences and various HR events, have come to the same realisation – unfortunately, however, with the addition of an ‘it’s not possible’ mindset. They believe that in most organisations, HR should only exist as a punching bag – a reactive function. Maintaining this view of HR, which is especially common in the tech industry, means it becomes a suicide mission to stand out, to put your foot down and challenge the organisation, the leadership and the business.

As Global Chief Human Resources Officer (CHRO) at Spotify, I look at my wonderful team with pride. They have all played an important role in the journey towards redefining what an HR department is and by doing so, they have also played a great part in making Spotify a great business. Many people reach out to us and ask us to provide examples of how to work with business-driven HR in practice, and the desire to contribute to real change in this area has grown stronger and stronger within me. The time is ripe. And the team is by my side, fighting and daring to be bold, which has had an incredible impact on the whole organisation. They need to be heard, and they are worth listening to. Together, we are shaping the present and the future of our profession.

The book was not written by me alone but by a large collective of authors consisting of HR leaders and other functional leaders at Spotify. It is partly a response to a high demand for them to share their unique experiences. Together, we have over 150 years of experience in HR – and now, we want to put that experience in your hands. The chapters cover many of the areas a global HR manager works with. It is a book written by practitioners, for practitioners. We describe how we see our profession, and how it can be something extraordinary. This is not my book – it is our book.

Our intention is not to imply that you should now question everything you already know and do. Instead, build on what works! We want to inspire you to pressure test your chosen truths and push yourself out of your comfort zone. There is value in not hiding behind a wall of ‘that’s how almost everyone does it’ or – even worse – that’s how we’ve always done it. Dare to try new things, question old ways of thinking and working, and be _bold_.

We have given theories, data and models some space in the book, but they are not intended to play the main role. We hope to contribute our thoughts and experiences on how to approach HR work in a new era. We will also share some lessons learned, and not only positive ones. Things don’t always go as planned, at least not at first. Our hope is that you will be inspired, gain new ideas and, where possible, challenge and develop your own HR approach. So take in what we write, or question it. Smile in recognition, or shake your head sceptically. Even if you don’t embrace our philosophy outright, you will almost certainly find something in the book that you like, or something that makes you re-evaluate something you do in your own organisation.

So the question now is: Are you ready to absorb our thoughts, to see where you can be bold, innovative, adventurous – maybe even disruptive?

If the answer is yes, great! Here we go!

Katarina Berg

Stockholm, 2nd January 2023INTRODUCTION:
A NEW STRATEGIC ERA IN HR – WHAT DOES THIS MEAN?

All activities undertaken by a company in order to create success fall under one of the three P’s coined by the American business leader Lee Iacocca: “People, Product, Profit”. The reason “people” comes first in this list is because you can’t do much about the product or the profit if you don’t have a great team of people. HR is about the culture within the business. It is about the people in the organisation who create that culture.

The role of HR is to develop and challenge the business. No more and no less. To put it in football (soccer for some) terms, HR’s job is to make sure that the team has the right players (and a strong substitute bench), that the players are physically and mentally fit, that they continue to develop, that there is a well-rehearsed Game Theory (Theory of Business), and that each individual player takes responsibility for their own personal growth and assumes accountability for the performance as a whole. To borrow football coach and leader Pia Sundhage’s words – each player should commit to “play on their teammate’s best foot”, which results in the whole team improving the individual as well as joint performance, and creates a team that behaves as one. This, of course, assumes that everyone understands the theory of the game; to return to the terminology of the business world: that your organisation has a vision, a purpose, a strategy, goals and core values that are well-founded and well communicated. You dare to be purpose- and value-driven as well as open and transparent with everyone about everything you believe in and intend to accomplish.

Anyone interested in the behind the scenes at Spotify knows that we like to think of ourselves as a ‘band’. Because just like a band, we depend on each other to create the best possible audio experience. Just like a band, we need to be in sync. At Spotify, we also put significant focus on our employees, or band members, as we call them.

Those of us who have written this book come from a school of thought where HR works in tandem with the core business. We believe HR’s role is to support, think strategically, design, develop, challenge, hold, stretch, invent, question, change and drive. Sometimes, it is our task to challenge the prevailing thought structures, business theories, and the current organisational design. We achieve this by using data, both quantitative and qualitative (employee surveys, tests, workshops, research, etc.). Our HR approach is based on theory, research and data – but also on many years of practical experience in the field.

At Spotify we sometimes talk about the ‘HR palette’ and the many different colours that make up the HR profession (allegedly 171 different areas of knowledge and expertise). Some believe that HR work can be undertaken by pretty much anyone who has access to data and is attracted to one or more of the colours in the palette. This is not true. You need a deeper knowledge of what happens to the whole picture if you adjust one aspect of an approach, even if that particular aspect may seem insignificant and disconnected from the others.

Just like at any other company, at Spotify, employees sometimes hear about the great things being done by other organisations and wonder: “Hey, why don’t we do that here?!” But what works in one organisation won’t necessarily work in another. In essence, you should never start from someone else’s sketches, or pick the raisins out of someone else’s cake. It’s essential to begin with your culture, define what you want to achieve, and create a long-term vision and overall picture of the business. Copying and pasting someone else’s concept and implementing it quickly and without deeper consideration, simply because it works for them, or because it sounds and looks good, is at best a short-term publicity stunt, and at worst both irresponsible and reckless. When setting your People __ Strategy, you must always start from your own organisation, its direction and its purpose. Any other approach signifies flying blindfolded, and then HR becomes anxious, not bold.

Our hope is that this book will answer ‘everything the CFO always wanted to know about HR but never had the courage to ask’ and simultaneously give a picture of what HR at Spotify is, and why we have the approach we have. Our focus is on what we believe drives the business forwards, alongside putting people and culture first. HR is not about trends. And HR’s function is not to be the ‘cake and balloons department’ either. It’s about understanding that the company performs best when employee wellbeing is prioritised; that when people develop, so does the business. HR is all about how to achieve such a win-win situation. This is exactly what this book is about too.

Our hope is that this book will help you get the HR side of the business up to speed. It provides strategic advice and suggestions for your teams on all things HR- and business-related – everything we believe is part of the new era of HR. We want to show you how to drive a bolder HR approach, whether you’re facing your most challenging change management project ever, dealing with a global crisis, or finding the right successors for key positions. We’ll show you how to retain top talent (although some turnover is natural and healthy), and teach you how to test a value-driven compensation philosophy. We hope we will manage to persuade you that the future is not about managing and controlling employees, but rather about supporting, challenging and enabling them to develop.

This book will also discuss how sustainability is becoming increasingly important, as is mental health, diversity, inclusion and community – and why you need to take these topics into account at almost every stage of your design thinking. We will also talk about how labour law is the basis for creativity and innovation, and thus the starting block for HR. It is almost impossible to be anything but reactive, traditional and defensive if you are not aware of the labour code. Understanding the labour code inside out is essential if you don’t want to resign yourself to being operational, rarely strategic and never tactical; the labour code affects everything from employment to retirement. If you don’t know your stuff in this area, get up to speed as soon as possible!

Another topic we will tackle is the need to see learning as part of your business concept. An organisation that does not continuously invest in the professional development of its people will stop growing and stop developing. Likewise, any organisation that doesn’t bring in the right people, at the right time, for the right roles, and adjust its organisational design accordingly, will lose momentum and competitive advantage. Welcome to the era of the employee.

Global HR at Spotify

HR at Spotify is heavily influenced by our rapid growth – rapid for us is between 1,000 and 4,000 new employees a year. We have to work smart as we don’t have the luxury to waste a lot of time on the unnecessary administrative tasks internally referred to as ‘work around work’. We also have to ensure that all new band members feel welcome and are onboarded in a productive and efficient way. In addition, they should understand our mission (purpose) and stand firmly behind it. Our work is also influenced by the fact that Spotify is a multinational company with +8000 band members, only around 20% of whom are based at the Mothership in Stockholm and most of whom work from home or other locations. This means we practise global HR. Before getting started with the first part of the book, let’s describe what we mean by global HR in more detail.

If you are under the impression that all companies with employees distributed around the world work with a global HR model, you are not alone. However, this is not the case in practice. _True_ global HR requires a lot of thought and coordination.

The world has never been as small, nor as interconnected, as it is now. Technology enables us to stay in touch with each other wherever we are in the world, and travel is more efficient and faster than ever. The number of both small and large businesses operating in multiple countries has also never been bigger. Therefore, to survive in the market, a business must think globally (although in some cases you have to act locally). That means giving up the old siloed thinking and being willing to blur the organisational boundaries to stay relevant. A company that wants to implement an effective global commercial strategy must have a culture where all employees feel they are working towards the same goal, no matter where they are in the world. HR has an extremely important role to play in order to achieve this.

Research shows that in companies with strong global cultures, teams perform better and have more engaged employees, who in turn stay with the company longer. Perhaps most importantly, employees remain more focused on the company’s purpose and goals. Since the very beginning of Spotify’s journey, we have strived to create an environment where innovative, resourceful and passionate employees can be their best selves. It has been, and continues to be, incredibly exciting – and challenging – to try to create a truly global culture of constant and rapid growth.

Three things have been particularly important in creating this culture – shared values, a shared mindset and shared leadership criteria.

Our values

We began our values journey with the global Passion Tour, where the executive team established our mission statement – our purpose/why. We then asked our people to define our common values, using a unique approach that we’ll explain later in the book. While most companies establish their core values behind closed doors during management meetings – or even outsource that job to external strategists – at Spotify, we believe that core values should be defined by employees, not established by external consultants, or by management alone. Therefore, we involved all our employees in the process. In practice, some of our HR team travelled around the globe and visited all offices to facilitate employee workshops. During the workshops, participants discussed our desired future state (our vision) and our purpose (our mission). Next, they identified the values that were most important to them to be able to do their best work, have fun, and learn and grow while doing so.

Spotify’s core values today reflect the values of our employees, globally. We are – as a company and as individuals – _passionate_, _innovative_, _sincere_, _collaborative_ and _playful_. Over the years, as we’ve grown, we’ve continued to ‘test drive’ our core values to make sure they still resonate with employees – in every region and in every office. If one of our core values no longer has as much support among employees as it did previously, we are open to making a change – core values are organic, living things, and as such, they should be changeable. If the culture does not evolve, we are not moving forwards as a company. At each new employee induction – Intro Days – we conduct a Passion Tour Encore to test current values and decide if they need to be changed or redefined.

Many companies value a strong culture and therefore want to hold on to what they have created, even when times and the workforce change. The old culture feels comfortable, understandable, rooted. However, we believe it is much more important to have the _right_ culture than a _strong_ culture, i.e. a _relevant_ culture, given who you are and want to be, and where you are going. Employees, especially the veterans, usually need support in order to let go of the ’good old days' and embrace the new. After all, a culture can be strong and dysfunctional or toxic simultaneously. If you believe that people are the __ culture, and that the culture reflects your people, you cannot cling on to the way it has always been. Doing so can cause three undesirable effects: your culture does not reflect your present, your culture is holding back business development instead of supporting it, and in your eagerness to please a minority, you forget that new employees become demotivated by a constant reminder that things were better in the past.

A global mindset

The basis of our Learning & Development (L&D) philosophy is what is known as a Growth Mindset. This is sometimes referred to as a dynamic mindset, as opposed to a static mindset. At Spotify, we believe that in order to achieve our ambitious goals, we must first create a global culture characterised by such a mindset. The research of American psychologist Carol Dweck, which shows that people with a dynamic mindset are more likely to recognise that they can develop their skills and, through hard work, _improve_, __ has been an inspiration to us. It’s good to be smart, and it’s good to be talented, but that’s just the starting point.

The concept of this dynamic mindset, together with the notion of the four universal motivators – or drivers, if you prefer – encompasses _autonomy_, _competence development_, _belonging_ and _benevolence._ This is at the heart of our global learning strategy and, we believe, central to a company culture that encourages employees to be bold, test their limits, dare to fail, learn and try again. We have embedded aspects of this mindset into almost all our development efforts (whether it’s leadership development or development opportunities aimed at other groups of employees) and are keen that all our managers understand the impact a Growth Mindset can have on our people and our business.

Our leadership criteria

It’s clear that our people managers have played an important role in the creation of Spotify’s culture. A global environment is often characterised by complexity and unpredictability, and by polarities – contradictions, paradoxes and major differences in experiences and perspectives between different countries. In our case, it’s about managing – and even embracing – those polarities. We accept the fact that it is never or rarely ‘either/or’, but almost always ‘both/and’. Our managers need to accept constant change, be empathetic, be able to adapt their leadership styles, focus on growth, be communicative and convey a thoughtful long-term focus. We realise it is a lot to ask – to be able to embrace and navigate dualities and charter the controlled chaos that is Spotify per design.

When it comes to creating global leadership criteria, a good starting point is to reflect on what your organisation considers to be the core of good leadership. The leadership criteria creates a common language that your organisation can use when expressing what you expect from everyone in a leadership role: it serves as a guideline for your managers. It becomes the framework and compass for those in charge. At Spotify, when we developed our global leadership criteria, we invited all our managers and employees to answer the question: ’What makes a leader successful at Spotify, today and in the future?’ We were able to identify a set of principles – and associated behaviours – based on Spotify’s values. The work on setting the leadership criteria and the work on the values was therefore done in parallel. Neither leadership criteria nor values can exist in their own world, they must be fully compatible and mutually reinforcing. Nor should they become slogans or feel overly polished. They should come from the organisation – because they are to be used by the organisation.

The criteria will be put to the test, especially when all is not rainbows and unicorns. It will also be an important part of the foundation of your culture building work (and this is an area that is very work-intensive). At Spotify, once we had our values and leadership criteria in place, we created a foundation of leadership training for managers (regardless of their level, the size of their team, or where they were located). The leadership criteria can be compared with a Service Level Agreement __ for Spotify managers.

Today, we recruit, train, evaluate, and sometimes redeploy managers using the agreed criteria. We have designed management and leadership development programmes where we carefully review what we expect from a manager at Spotify. We look at what effective leadership is from a strategic-philosophical perspective, what a growth mindset is, and how we can strengthen our employees’ motivation through purpose-driven and passionate leadership.

Not much is mandatory at Spotify, but our manager and leadership development programmes are. It’s a way of ensuring that our people managers, wherever they are in the world, work in line with our values. It’s crucial to how we create a positive culture globally.

Challenges

Growing into a global culture, and then guiding, shaping and maintaining it, is a challenge. We need to constantly monitor whether we are truly living our values from a global perspective, while taking into account local cultural differences. The Spotify culture has Swedish roots, and striking a balance between our cultural heritage, our global culture and the local culture in each office has sometimes been challenging. This is why we have ensured that this work is not done in campaign or project form. It is imperative that those of us in HR truly understand what makes the Spotify organism live and thrive and progress, that we understand the core business inside out, and that we are _integrated into the business_ rather than brushing the surface. It also makes our work more fun, more tactical, and more strategic.

We strive to be ‘glocal’ (think global, act local), and expect everyone in the HR team to have as much business acumen __ as HR knowledge. In the HR team, we have developed a great sensitivity to even small cultural differences, and are in a position to identify them. We give our employees and managers in the different markets the mandate to help drive our culture work and ask them to play a role in reminding us that we are a truly global company. Questions during recruitment and answers from employee surveys around the world have proved that most of our employees recognise that Spotify is a global company – and this is often one of the main reasons they joined the band.

Those of us leading HR at Spotify play a key role in showing our managers and employees what it means to work in a _truly_ global culture. It also requires us as an HR team to be _truly_ global.PART 1

Part 1.
Attraction and Recruitment – attracting and recruiting the right people

_Introduction by Dr Tomas Chamorro-Premuzic_

HR professionals have been warning us about the increasing complexity and unpredictability of work, and its related talent market, for some time. In recent years, organisations have been forced to change and modernise in ways they couldn’t have expected – it seems like the future is finally here, and there is no going back to rigid working, tech averseness and talent endlessness.

And yet, it would be counterproductive to forget that the critical questions around talent identification, at least on a broad and high level, have not changed that much. In fact, all organisations are still, in effect, concerned with the same old questions, namely: How do I find the right person for the right job?, How can I identify and develop future leaders?, and What is the best way to align my strategy, culture and talent?

If an alien arrived on planet Earth right now and they were only able to digest current thinking about talent, especially focused on new technologies and disruptive innovations, they would be missing out on a great opportunity: to learn from the past; not just understanding the present, but being able to use the past to predict and improve on the future. Indeed, for all the talk of unpredictability and all the unknowns, we should not forget that there is a well-established science to identify, understand, and improve human potential. Because of this science, there is really no structural impediment or constraint to organisations becoming more talent-centric and meritocratic – other than, of course, politics, overconfidence, incompetence, and an inability to learn from mistakes. Consider that human beings have not changed very much in 200,000 years of evolution, and that the fundamentals of human psychology – what makes people unique, how they are likely to behave and why, and what they are passionate about – change only in small increments. We still work to find a sense of purpose, to connect with others, and to achieve something that contributes to a wider cause. This is why understanding and betting on talent is advantageous for everyone: organisations win because people are key to advancing their strategies; and people win because in order to thrive, you need to find the right fit for your talents and be understood at work, which occupies a big chunk of our lives.

Still, there are also changes, cultural and societal, that need to be acknowledged. The new HR era is clearly focused on people-first and optimising not just for performance and productivity, but also wellbeing. Contrary to what people think, there is not a tension between the two. If you want people to give you their best and be productive, you need to look after them and help them look after themselves. Most of us spent the early days of the COVID-19 crisis on back-to-back video calls, without much time to eat, walk, breathe or dream. Then we remembered that this is our life – if we are going to live to work, we had better make work as rewarding as possible. And even if you love your job, there’s a chance you’ll burn out if you forget that there are other dimensions to life. Every new age brings new challenges, which are often best understood as polarities. Business leaders who are naive enough to believe that you can turn people into productive machines will not just fail their employees, but also lose the talent war. The best and most talented people in any industry want to feel loved before they unleash their full potential at work.

This is also the age of data-driven HR, which is bringing about a big change in real-world hiring practices. For every organisation that professes a strong intention to be evidence-based and science-driven in their talent identification approaches, there are nine that continue to base most hiring decisions on intuition, gut feeling, or ‘social capital’ (a euphemism for nepotism and political cachet). This is why so many companies love hiring for ‘culture fit’, why most managers think they ‘know talent when they see it’. It’s why it is rare for anyone to get a job unless they are evaluated more favourably than others in a job interview, despite overwhelming evidence that most interviews are biased, unreliable, and poor predictors of future performance (particularly if you need to look at candidates’ potential for doing a job they have not done before). In a world where most organisations truly cared about accuracy, the Myers Briggs (MBTI)¹ would not be the most widely used personality test, and documentaries such as _Persona_, which portray psychometric assessments as inherently flawed, would not get the popular acclaim they do. Despite enormous advances in AI (Artificial Intelligence) and analytics, and the fact that science-based assessments can provide a much more accurate picture of a person’s talent and potential than interviews or human intuition, we continue to favour our instincts over evidence, like the cab driver who ignores Google Maps or Waze in favour of their own experience. Except we don’t even acknowledge when we get it wrong, because unlike cab drivers, in the world of talent, you can always pretend that you were right…

Still, there have been massive improvements in the world of hiring for those who want to opt in. It has never been easier to invite a wide and diverse range of candidates to interact with engaging and insightful tools; to learn about themselves, and their potential fit with a given role or culture. And there has never been a bigger appetite to hire for culture add-on rather than fit. The rise of diversity and inclusion (and belonging) is a true blessing for the world of talent, because it will do more to unlock the power of cognitive or psychological diversity, and leverage the distributed expertise of the knowledge economy, than any tool we had in the past. Equally, if there is one silver lining from this pandemic, it’s the fact that people will take leadership more seriously: every human in the world has realised (sadly, the hard way) that it is generally advantageous to have leaders who are competent, smart, kind, honest and humble… as opposed to the opposite. This may reduce the historical tendency to promote overconfident narcissists to leadership roles, as well as the bad habit of making leadership a popularity contest where the most pathologically ambitious person (usually a white male) wins, to everyone’s detriment.

With this in mind, you will appreciate this chapter on talent identification and recruitment, for it has managed the near impossible task of balancing the proven science of potential with the modern challenges of recruitment. Much like any other activity or enterprise at Spotify, the author’s approach is optimised for rationality and balance, and manages to refresh established principles in order to boost their relevance and applicability to the modern world of work. The war for talent has been intensifying since McKinsey first coined the term nearly 25 years ago. It is safe to assume that in the near future, and particularly in the aftermath of this recent pandemic, the best employers and talent magnets will be able to leverage all available technologies to understand their people, help them be understood, and turn the unique perspective humans bring to the table into a true collaborative asset. People will want to join – and remain in – organisations that nurture and harness their potential, and that have the data-driven humility to challenge their own assumptions about how to unleash talent at work. This is not so much a talent philosophy as a cultural DNA. Importantly, one size does not fit all, but in reading the next pages you will appreciate the beauty of keeping things simple, and the elegant appeal of that undervalued strength called rationality.