Your Next MD Will Be From HR!

Why just your next MD or CEO, it is plausible that the next wave of corporate leadership and those occupying the seat at the head of the table in boardrooms across the world, real or virtual, could be from the People Function. For far too long this function has played a support role and has been dutifully performing its task on the leadership fringe. But all that is set to change in the Industry 4.0 milieu.

Much is being discussed, written and spoken about Industry 4.0, it’s sectoral impact, opportunities it will create, skills that will be required and much more, but I find a conspicuous absence of any discussion on how 4.0 will impact the leadership construct.

Even if we do not go as far back as the steam engine or the Spinning Jenny and begin to trace evolution of industry from Industry 2.0 through to 4.0, we see that functional origins of leadership in corporations was predictable and more or less mirrored the evolution of the industry itself.

Factory in Industry 2.0
Industry 2.0 & “The Manufacturing Boss"
The pre and post World-War II era, which roughly translates to this period, beginning in early 1920’s and ending in late 1960’s, was characterized by hegemony of manufacturing and production. Across the globe from Motown majors in US to engineering behemoths in France & Germany to Industries out of post war nationalist Japan, the world was setting a frenetic pace of manufacturing, producing and excavating. Post-depression consumerism which was boosted multiple times by the heightened public spend that followed the end of war time command economy devoured everything that could be produced. Fortune 500 data of only American companies at the mid and end of that era makes for interesting observation. Most corporations are from this sector.

Typically, the people leading these corporations were the tough, gruffy, hard-nosed, cigar smoking, down to earth engineers, inventors and technocrats. From opportunist Robber barons to the absent-minded inventor, hurried and impatient as they were, each wanted to get on with the job. And fast. Money was to be made and time was short, and nothing mattered but the end. And many times, not even the means to the end! Pop culture reflected this. Chaplin’s “Modern Times” offers a brilliant view from the bottom of the pyramid while Ayn Rand’s seminal essays on capitalism; Fountainhead and Atlas Shrugged, give a view from the top about this era. Hank Rearden and Howard Roark typify the industry 2.0 boss!

This was the context in which the “People Function” or shall we say the Industrial Relations (IR) function emerged in that era. Human Relations (HR) was yet to come. Men and later women and their physical power became essential and important in the composite ingredient mix along with material and money to keep the mass-producing assembly lines moving. And this manpower needed to be managed even if only to the extent of achieving zero machine downtime. Priority was machine and material first, money second and manpower last. The IR function dutifully managed this resource with a primary intent of not unruffling the maverick boss. Sure, the leftists were not sitting idle, and they did introduce some complexities such as trade unions and wage negotiation which kept the IR function on its feet, and they coped.

Philip KotlerIndustry 3.0 & “The Marketing Boss”
As we reach the mid-point of Industry 3.0, around mid-80s’, and look at the list of leading corporations, we can see competition picking up. Number of oil and auto companies in the fortune 500 list itself begin to increase and by the time we are at the end of that era we find strange new and alien sounding entrants like Amazon and Apple creep into the lists. Even names from far corners of the world like Philips and Samsung find a mention. The Japanese are seen to be warming up in the sidelines with Toyota and the Chinese are surging with a military like Comintern intent with their banks and petroleum companies. Even Walgreens is wedged in between crude, steel and auto…. but that which perhaps typifies an epochmaking change of this era is a retailer sitting at the top; Wal-Mart!

This perhaps is hint enough of what was happening in the world of business. Competition was increasing, supply had begun to outstrip demand, need creation became important as basic needs were in any case few and were satisfied. The boob tube had hit the drawing room, media and communication had matured and the mother of everything, the internet era had dawned. This era saw the baton passing from a no-nonsense manufacturing boss who retracted into his walnut paneled club to the glib talking, master communicator who could make the consumer follow him like the proverbial Pied Piper. The Marketing Boss! Management books deified Sculley, Iacocca and Steve Jobs and Philip Kotler attained demigod status. Jerry Maguire and Devil Wears Prada brought marketing and branding out into pop culture! India though was a few years behind in that era still straddling 2.0 & 3.0, best reflected by Amitabh Bachchan in the era of angry young man of Kala Patthar, Deewar and Trishul.

The people function was busy adapting and reskilling during this time. IR transitioned to HR and learnt new skills. Gen-X was tolerable and manageable but then the millennial arrived with strange and alien seeming and exasperating expectations and had to be dealt with differently. Gig economy had started, and technology was throwing up ever newer challenges. But the HR head coped with all that while dutifully adapting to keep the wheels of industry moving many times even in the face of brash decision making by the Marketing Boss. But this was era when the HR head matured

In the meanwhile: The “Finance Boss” and the “Technology Boss”
It did seem, albeit for a short while in 3.0 era that the leadership role will be taken over by the finance and technology function. Particularly during the Y2K era in India and a little before that elsewhere in the world. But both, finance and technology, transitioned from being of mere business support functions to leviathan industry sectors on their own and began charting their own leadership roadmaps.

Industry 4.0 & “The HR Boss”
From every angle it seems that industry 4.0 is going to be an era of the HR Boss or at least a boss who is adept at handling the human element. As the world of business continues its deep dive towards new and epoch-making integration of technology and manufacturing in its quest to find that next spike of growth and productivity it seems to be strangely blindsided about its impact on leadership.

An army of technologist is getting ready and is obsessed and even perhaps possessed with dealing with agile manufacturing, smart factories, data driven and computing prowess aided machine learning to standardize thought pattern and develop artificial intelligence. It sure looks like machines will be taken care of or perhaps will even evolve to take care of themselves. But who will take care of that other critical element – humans? That perhaps is the reason the “HR Boss” will now take charge.

The new order will on one side throw up new opportunities, new challenges and new jobs but on the other, time at hand and frequency of skill obsolescence cycles will increase. Interestingly the top 10 skills required to succeed as per the oft quoted World Economic Forum (WEF) survey done as a part of their Future of Jobs report points out to no particular functional or operational skill but more towards attitudinal skills. Human touch will gain prominence and how this resource will be managed will make the difference between winners and the also rans.

Of course, all this may be a conjecture at this point and we still don’t know how things will evolve but the top 10 skills sure do point at a many which have traditionally been in the domain of HR and Learning & Development.

But before the HR fraternity revels at the thought of smelling leather of that boardroom chair they will need some introspection and reskilling of their own. Unlike in the past, during the transition from 2.0 to 3.0 or from HR to IR, when it happened due to forces or evolutionary change or even if forced by the then bosses in manufacturing and marketing, this time it will require some effort.For beginners, since leadership role does not operate in a silo and demands deft modulation of multi-functional interplay, the HR Boss will have to learn and be aware of other functional skills. He will have to transition from being an enabler to a driver of goals and the function will have to move from being reactive to being proactive. Complexity and difficulty index for him will now increase as the ultimate goal will not just be people but value creation through people. The buck will now stop at him.

Sure Industry 4.0 will throw up many uncertainties but those in the HR function must know -Your time for that leadership role has come. And your time starts now….