Scaling HR for success

Sustained organisational growth remains a much sought after goal, but a rare occurrence in practice. Research evidence confirms that critical stumbling blocks for organisations attempting to scale stem from people management or finance. The significance of mastering people management to scale effectively is a point (unusually) agreed upon by both practitioners and academics. While researchers have explored start-ups and high growth as a once-off process, the capabilities and processes underpinning the ability to scale remain somewhat unknown. Anecdotal stories abound highlighting the significance of heroic leadership, organisational culture and problem solving for effective scaling, but these only point to part of the HR puzzle. 

Working with hundreds of scaling organisations in executive education and research over the last number of years, we have come to better understand the role of HR in enabling transformative efforts to synchronize internal organisations while providing an infrastructure for further growth and change. Organisations that scale rapidly must continuously balance the long-standing challenges of differentiation and integration. They are not helped in this task by a legacy understanding of HR as a once-off, plug and play solution as opposed to a dynamic consideration. A shift in mindset is required, one that positions HR conversations and action with the top team as a constant and significant presence. Based on extensive work with scaling organisations, we have come to consider scaling HR for success as a set of core principles (Systems, Consistency, Agility, Leadership and Engagement) reflected in the acronym SCALE

Scaling HR for success: The SCALE mindset 

Systems- with the pressure to scale comes a reality that the introduction and operation of HR practices are frequently a reaction to growth as opposed to an enabler of growth.  Typically, firms recognise a deficiency in employee numbers hurrying to on-board to meet demand. As a knock-on over time, the limits of existing skill-sets mandate investment in training and perhaps consideration of culture. This might also be seen as a way to address any emerging employee retention issues. In this way HR is managed on a crisis-by-crisis basis. The solution is not to think of HR practices but to think of HR activities in the form of a bundle or systems i.e. how do HR practices talk to each other and reinforce each other? There is much to be said for such systems thinking e.g. thinking of both attraction and retention as a form of signature employer branding versus the trap of HR practice isolationism. It is not only that HR practices may be ad hoc, and reactive in the absence of system thinking, they may work against each other in what has been termed ‘deadly combinations’. Examples include scaling organisations attempting to foster cultures founded upon collaboration and knowledge sharing but rewarding behaviour on an individual basis via the likes of performance related pay or focusing on individual talent reviews versus peer or more holistic assessments. 

Consistency- for many organisations HR is first judged as a dedicated person and then perhaps an expert department. However, for those that master the navigation of change, HR is seen as an essential part of all management roles. Once a first hire or ‘new-joiner’ is brought on board organisations are engaging in HR. Research shows that the first interactions with, and on-boarding into, organisations, represent a critical imprint shaping subsequent employee performance. Important here is the recognition that most employees’ direct experience of HR will be that delivered by their line manager. While too much formal policy can slow growth and hinder innovation, consistency in management enactment of HR can form the well-spring to sustainable messaging, sending strong signals about strategy, requirements and expectations. Effective scaling organisations recognise the significance of such consistency, including by discussing, embedding and imparting core organisational values. These create a golden thread through all engagements with employees and can be built into the entire suite of HR activities from the basis of attachment and recruitment to the organisations through to reward and employee voice. Effective scaling organisations value the value of values. 

Agility – it is important for rapidly growing organisations to develop capabilities enabling them to balance the core activities of exploiting the success of today, while equally exploring the basis of advantage of tomorrow. Thinking in systems is important to avoid HR isolationism, but in managing HR scaling organisations must be cautious that the purpose of the system does not become the maintenance of the system. The mindset shift here is one from thinking of HR as fixed, once off solutions towards embracing HR as a prototype, and embracing evidence-based experimentation with scope for learning and reflection. An inherent part of the values communicated should include a willingness to test assumptions and to be willing to try and fail. This avoids the danger of succumbing to size and losing sight of the start-up/scale up mindset. In this way scaling organisations should practice and refine agile HR e.g. via minimum viable processes or experiment with AI. 

Leadership - an important part in ensuring success in rapid scaling is developing and maintaining consensus amongst the leadership team. This sounds quite obvious however, assumptions frequently go untested or unaired leading to competing goals, misdirection and ultimately the risk of conflict. The focus can often be consumed by the heroic founder or entrepreneur to the neglect of how to build and embed capabilities into the organisation. Leadership creates momentum and legitimacy by directly integrating HR considerations into strategy conversation asking the questions such as what type of employee role behaviours are required for success in realising strategy. Systems thinking, consistency and agility can be reinforced by privileging topics such as succession planning, talent development and change. Leaders are also important sense givers in the operationalisation of HR and communication of values. They directly shape the understanding and motivation of followers and can materially and symbolically reinforce the purpose and intent of the organisations e.g. rewarding and recognising aligned or required behaviours. As a result employees can better appreciate not just what HR is intended to achieve, but more critically the reasoning why and their respective contribution to scaling success. 

Engagement- Too often treated as resources to be controlled and made predictable, effective scaling organisations double down on participation and autonomy, treating employees as critical stakeholders in both the design and execution of strategy. As the direct face of organisations employees should have a clear sense of the core tasks they conduct every day to realise strategy. Linked to above, employees should be aligned and motivated on the basis of a distinctive bundle of HR practices which is founded on understanding their needs and expectations and creating an infrastructure ensuring that they can excel in their roles and can be purposeful in their contributions to the organisations. The absence of this will ultimately impact the ability to scale effectively fracturing dealings with internal and external stakeholders.

The principles outlined above are ones to consider to ensure effective investment and return with the likes of AI, prompting questions such as where does AI fit into, enable or constrain the existing system; is there a consistent view of the use and potential of technology and clear principles around same; is there sufficient agility and experimentation allowing for learning, quick-wins and fostering change; are leadership bought into new technology and ways of doing this and, finally; what of employee understanding, reaction and buy-in to efforts including perceptions about how technology will inform future ways of working.

Scaling is a challenging task mandating significant effort and motivation. From research on those organisations who have mastered this the SCALE principles above come to the fore. Beyond a focus on fixed, boilerplate HR practices few would deny the value of shifting towards a SCALE mindset consisting of

• Systems perspective to consider HR as a flow of activities versus an isolated practice. What is your organisation doing to think holistically and avoid deadly combinations?
• Consistency in terms of values and their enactment in managerial behaviour and people management. Is there a golden thread underpinning all HR activities and flows in your organisation?
• Agility to allow for growth, change and to ensure existing ways of doing things today don’t become enshrined as the false basis of success for tomorrow. What are the HR prototypes ongoing in your organisation, where are you willing to fail?
• Leadership- is there a general consensus as to how people management should happen? To what extent are key messages lived and reinforced?
• Engagement – are employees appropriately understood and valued as contributors to strategy?

About the Author

Professor Brian Harney (PhD, Cambridge, MCIPD) is Head of Work Psychology Strategy and Professor in Strategy and HRM at Dublin City University Business School, Ireland. He is a leading expert on the intersection of strategy and human resource management, focusing particularly on SMEs, scaling and knowledge-intensive sectors. Brian is the author of several books including The Global HR Case Book (Routledge), Reframing HRM in SMEs (Palgrave Macmillan) and Strategy and Strategists (Oxford University Press). 

An award-winning educator, he is a recipient of the prestigious Academy of Management HR Division Innovative Educator award and was founder and programme chair of the award-winning BSc in Digital Business and Innovation. Brian has designed and delivered executive education for a clients across a range of sectors and has held visiting positions in China, Slovenia, Canada and the USA. He serves as an Associate Editor for HRM a Financial Times Top 50 Journal.