Human Resources as an Organizational SystemDBAI White Paper Series Number Fifteen

DANIEL BLOOM & ASSOCIATES, INC.HR STRATEGISTS

Guiding Individuals and Organizations on a Journey towards greater productivity

May 2013Authored by: Daniel T. Bloom SPHR, SSBB, SCRP

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About Daniel Bloom & Associates, Inc.

Daniel Bloom and Associates, Inc. (DBAI) began operations in December of 1980 as an independent consulting firm following the reduction in force from the human resource function of the ECI Division of E-Systems where the Chief Executive Officer of DBAI was part of the recruitment function. At the time of the reduction in force, the management of the company referred us to a local corporation who was scheduled for a visit from the OFCCP to investigate their equal employment efforts as a government contractor. Over the following six months we created their entire Affirmative Action Plan. At the completion we were referred to an additional local corporation who was need of an update of their current plan.

In February of 1988, Daniel Bloom & Associates, Inc. became a registered Florida corporation continuing our assistance to local corporations with a concentration in the corporate mobility arena. This was done working on our own and through several local real estate firms.

As the economic times turned down in late 2008, DBAI began to expand its services to include further offerings within the human capital arena. The goal was to provide organizations with the requisite strategic outlook to improve their management of human capital assets.

In 2013, the organization to better serve our client base, concentrated our service levels around the areas of HR strategic initiatives; Retained HR; HR process Improvement; Training and Coaching.

In the course of delivering services to our target market segment we have affiliated the organization with the

Society for Human Resource Management

Worldwide ERC

HR Tampa

For further information on these service areas contact us at:

Daniel Bloom & Associates, Inc.

PO Box 1233

Largo, F 33779

Ph: (727) 581-6216

Fax: (727) 216-8532

E-Mail: dan@dbaiconsulting.com

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The Role of the Ecosystem in Life

One of the current trends in education is to teach on the basis of what is called the Core Curriculum. Under the science area from grade 5 on the students are presented with the concept that “organisms can only survive in environments in which their needs are met. Within ecosystems, organisms interact with and are dependent on their physical and living environment. Some changes in ecosystems occur slowly, while others occur rapidly. Changes affect life forms, including humans. The number of organism and populations an ecosystem can support depends on the biotic resources available and on abiotic factors, such as quantities of light and water, range of temperatures and soil composition.”

Thus in a real sense the ecosystem and its internal and external factors help support life as we know it on our planet we call earth. All of these factors combine to predicate whether we as a species and all the other life forms on the planet can continue to survive successfully.

The role of the Business Ecosystem

Our business organizations in a sense are like the biological ecosystems and function much like the ecosystems we study in the science realm. The combination of both external and internal factors provides the basis for the survival of our organizations. Like the natural ecosystem the business ecosystem can change slowly or it can change rapidly depending on circumstances at any given point in our operations. This White Paper (Number 15 in the White Paper Series) looks at the organization as ecosystem or system for short and what factors affect the success of the organization.

In the LinkedIn groups (TLS-TOC Lean & Six Sigma in particular) there has been an ongoing conversation about when you merge the three. In the course of the discussion we posted a comment regarding an output from a seminar we were facilitating which talked about an organization in which the job requisition was reviewed and approved three times by the same person in a hiring effort. One of participants replied that that was an indication of mismanagement not a system problem. He further went on to state that the system represents a bigger picture than the hiring process. It made me wonder whether he was correct.

Definition of a System

On page 552 of the Theory of Constraints Handbook edited by James Cox III and John Schleier, Jr. they define a system as being made up of inputs, a process of some kind, outputs and the environment in which these components exist. Chip and Dan Heath in their book Switch , talk about problems being faced by organizations not being a people problem but rather a "situation" problem. Let me start with the expression of the understanding that most HR executives and in fact many executives do not know how to look at things in a systematic way, but we hope the discussion below will help in that regard. So let's look at the parts of the definition.

HR as a System: The Inputs

Dictionary.com defines input as something that is put in or the act or process of putting in. When we look at the business ecosystem there are inputs to our organization from every turn. Our customers put demands on the organization in the form of orders. Our managers put demands on the organization in the form of what they believe they need to meet the talent management needs of their departments. Our suppliers put demands on the organization in the form of deadlines when they can ship the materials we use to make products or provide services. Talk to your peers and you are bound to hear that the feeling is that everyone is trying to

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tell us how to do our job. Talk too upper management and they will tell you what they believe the stakeholders of the organization are demanding. We also get data from candidate vitae’s as to the available skills in the employment market. Additionally we get data from outside the organization when we benchmark the best practices within your industry. These are all inputs and they become a critical part of the business ecosystem.

HR as a system: The Process

Dictionary.com further defines a process as a systematic series of actions directed to some end or a continuous action, operation, or series of changes taking place in a definite manner: the process of decay. Accept the fact that everything we do is part of a process. Whether it is making a product or delivering a service to our customers in some shape or manner we are creating and completing a process. We follow a process when we hire a new employee. We follow a process when we investigate an employee’s complaint. We follow a process when we prepare a report for upper management. Our organizations thrive on processes; it just is at times we need to make changes to the ecosystem to make these processes work more efficiently.

HR as a System: The Outputs

Dictionary.com once again defines output as the act of turning out; production: the factory's output of cars; artistic output; the quantity or amount produced, as in a given time to increase one's daily output.; or the material produced or yield; product. If everything we do within HR management is based on a process, then the end results of the process constitute an output. We begin the hiring process then the employment offer is the output. We begin the process of open enrollment; the employee enrolling in your benefit program is an output. We develop new policies and procedures, the document is the output.

HR as a System: The Environment

Finally Dictinary.com defines environment as the aggregate of surrounding things, conditions, or influences; surroundings; milieu. In the science of ecology it is the air, water, minerals, organisms, and all other external factors surrounding and affecting a given organism at any time; or in the material world in which we live it is the social and cultural forces that shape the life of a person or a population. John Donne stated that no man is an island, and in this case the previous components of a system do not operate in a vacuum. This world we call an organization is an environment. Our organizations are shaped by the social and cultural forces that govern how we operate.

So truly while there may be some arguments to the contrary, HR management meets all the requirements to be called a system. In recognizing this, we need to clearly consider whether our HR management efforts are centered on how to make the system work to its maximum level of productivity.

HR as a True System

We can define Human Resources as a sub-system of the total organization and can observe and define that system through a use of a continuous process improvement tool called a SIPOC diagram. To further explain the HR System the remainder of this White Paper will dissect the HR Management SIPOC.

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As can be seen in the figure above, the SIPOC asks us to consider and investigate all the social and cultural forces that shape the life of an organization. It is the basis of the organizational environment in which the operating system exists. It is only through a careful analysis of the above factors that we can fully respond to the question posed by this White Paper – Is HR Management a True System?

HR Management as a System – The Suppliers

One of the characteristics of the working definition of a system was that it was comprised of inputs into the process cycle. Like any ecosystem it forms a continuous loop in which the efforts form a cycle. However there needs to be a starting point and it is impossible to have inputs be that starting point since something or some entity has to create those inputs.

Within the business organization that creator is manifested by the existence of both the internal and external suppliers who begin the SIPOC form shown above. Inputs as stated above need to originate from somewhere. The key partners are going to be those who through their actions assist the organization in reaching its objectives and its strategic initiatives.

The internal suppliers are those individuals whose decisions directly affect the day to day operations within the organization. Typically the internal suppliers are represented by the hiring managers, top management representatives and the organizational human capital assets. Each believes that they have a unique view on the global workplace. It is this unique view that dictates their efforts in creating the inputs. The hiring manager determines the staffing needs of his or her department. The top management needs to determine how to respond to the demands of the stakeholders. The organizational human capital assets look towards what is required for them to engage with the organization.

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Likewise, the external suppliers are those entities which support the efforts of the organization to survive in this rapidly changing marketplace. Their actions supplement the requirement of the internal suppliers. The external suppliers may include the candidates for available opportunities; recruiting agencies; organizational alumni, the media both social and traditional; our vendors in the real sense and our client base. These external suppliers comprise a valued part of the voice of the customer formula.

HR Management as a System – The Inputs

Our definition of a system began with the point that a system begins with inputs being in place. Each of the suppliers referred to in the previous section above bring into the system contributions which help build the total system. Consider the identified suppliers mentioned above.

The hiring manager who understands their hiring needs will develop the details of the job requisition or the key performance indicators required to successfully fulfill the talent management needs of the organization. Top management who understands the demands of the stakeholders will provide the organization with guidance towards meeting those demands. The Client provides the organization with a sense of the voice of the customer which provides us with a view of what they expect in return from giving your organization their business. These are all inputs to the business ecosystem.

HR Management as a System – The Process

Our definition of a process stated that a process is a systematic series of actions directed to some end or a continuous action, operation, or series of changes taking place in a definite manner. These actions are the direct result of the introduction of the inputs. The job requisitions or the KPI’s lead to the actions we refer to as the hiring process. The actions of management lead to the process of developing new policies and procedures for the organizations operations. With very few exceptions everything we do in the human resource space is based in some type of process.

HR Management as a System – The Output

If we were on a production floor this part of the definition would be easy. We produce an item and the result of the building process becomes the ultimate product. When we move into the human resource space it becomes a little less clear. Ken Miller who is the author of the book “We don’t make widgets” expresses the belief that every business organization makes widgets whether they are a producer or a service provider. If we follow that believe, and we do, then the outputs from this system we describe becomes the individual we hire, or the policy we develop and communicate to the organization. The output becomes anything that comes out of the processes we utilized in the previous stages of the definition.

HR Management as a System – The Customers or End Users

The final component of the definition talked about the environment in which the process functioned. Every output has an ultimate space that it is delivered to whether we are talking internally or to resolve the issue raised by the voice of the customer. We will further find that many of our suppliers become full circle in the system. They began as suppliers and complete the cycle by being part of the environment that receives the results of the process.

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Conclusion

So as we complete our review of the human resource function as part of the business ecosystem did we meet the conditions we outlined in the beginning of the White Paper? Is the human resources function a true system within the business environment?

We defined a system as being made up of inputs, a process of some kind, outputs and the environment in which these components exist. We clearly set the framework of an organization being a business ecosystem containing several subsystems of, which human resources are a critical one. Everyday HR is exposed to suppliers, who as part of their responsibilities provide the organization with critical points of quality in the form of inputs to the greater organization. In turn these inputs become the base of our many processes that govern the tools that HR has to solve the organizational talent management issues.

Every process has its end results or outputs which govern the success of the efforts of the organization. These outputs are delivered to either internal and external customers or end users. It is the meeting of these needs of the end user that brings the system to a full cycle. In the end we add feedback loops to the system in order to determine whether we met the voice of the customer. It is these VOC responses that demonstrate the worth of the system.

So in final analysis, HR meets all the requirements of the definition of a system with the only caveat that it is only as healthy a system as the quality of the forces involved in its performance.