Future of HR, HR Management

Fast HRM Part 3: Why Relationships Are So Critically Important

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By Theresa M. Welbourne, PhD

This series of articles on Fast HRM is devoted to the goal of starting a movement to speed up the delivery of HRM tools and process by following the learning of the agile and extreme programming methods.

In the first two articles, the case for doing Fast HR work was introduced and discussed. Through the series, the principles of Fast HRM are introduced. The pieces also discuss why the Fast HR principles are important for any human resources group that wants to help its leadership and management team succeed in the current environment of business, which is fast and getting faster every day.

The first article — The Fast HRM Movement: It’s All About Energy, Performance, Success — introduces this line of work. The second part — Fast HRM Part 2: It’s About Fostering Trust and Doing Business Fast – focused on trust as a key ingredient for going fast.

In this third article, relational capital is the focus. As you will see as you start thinking through all of these principles, they are related. With strong relational capital comes higher trust, and both relational capital and trust build a foundation for innovation, which was the first principle.

Human capital vs. relational capital

There are extensive research and conceptual papers on the topics of human capital, social capital, and relational capital. In a simple definition, human capital refers to the traits and abilities of a human being while relational capital focuses on the relationships the human being has with stakeholders around him/her. Relationships may be with other employees, his/her manager, senior leaders, other departments, vendors, partners, the community and other groups associated with the organization.

Several fields of research are showing compelling work that it is not the human per se that drives high performance, but the relationships people have. The strength and quality of relationships are important for driving success; however, in many organizations (most in fact) this key ingredient for success is not visible or measured.

Reductions in force happen with no idea about what relationships are going out the door. Later, when key customers fail to renew, it is a bit too late to realize that the person who was let go took the relationships with him/her.

It is via relationships that most people acquire critical information to help them in their careers. Via formal and informal mentors or people who “look out for you,” high quality people find out what is happening in the environment, and they adjust their work to meet new business demands.

It should not be a surprise, then, that in order for HR to go fast HR professionals need high quality and long-lasting relationships with key informants in the organization. Going fast means being prepared and being very well informed about new trends and business challenges.

In the Fast HR training that we do, we focus at least one module on defining key stakeholders, building higher quality relational capital with these individuals and securing them as key informants for an ongoing HR development strategy. Parallel to the processes that agile and extreme programmers use to define requirements with key customers, the HR team secures insights from the key customers who are open to ongoing dialogue about HR deliverables and who understand the business environment and who are willing to help direct new HR work.

7 steps to Fast HR via a relational capital partner

In order to get to the place where you can secure this type of relational capital, a few things are necessary:

  1. Audit your current relational capital; where are you strong and where weak.
  2. Determine which stakeholders you need in your core informant group.
  3. Ask these individuals what they need from HR. Based on what these key stakeholders need, start at least one Fast HR initiative.
  4. Work closely and iteratively with these individuals to bring a project to fruition.
  5. Deliver a small piece of the project within two weeks; let your contact work with the tool, then meet again, review and change.
  6. Iterative and small deliverables do not mean lack of discipline. Use rigorous communications and project management in this work.
  7. Ask your contacts who else should be involved with your work.

Continue to build your relational capital within the HR department, across the organization and outside the business. With a positive and high level of relational capital, businesses succeed when others do not. Clients are more willing to stay with a company even if the prices increase if and when they have a trusted colleague.

Warning

Since starting the Fast HR work, we have seen several organizations choose specific projects and obtain input from key stakeholders. The error made by a few, however, is that when the HR group thinks the project is done, they do not go back to their stakeholders.

This is a big mistake because relationships must continue to strengthen. Also, the HR process that is being developed will continue to need more input as your stakeholders continue to use it and as the business environment evolves.

Controlling vs. nurturing

Human capital tends to be controlled; we account for it, and we try to develop metrics to measure and maximize it. Relational capital is different; it needs to be nurtured.

You cannot build a relationship, ignore it and expect it to continue to be strong. Just as you do with family relationships (e.g. husband/ wife, parents, children), strong relationships require ongoing attention. When you let your guard down and forget the value of the relationship, the relationship will diminish in quality and strength.

Fast HR requires strong relational capital for success. Trust, strong relationships, innovation, risk taking and ongoing communication make for healthy partnerships that traverse good times and bad.

Help move the Fast HR movement forward

Please share your stories of ways that strong relational capital has helped your organization succeed or assisted you in a Fast HR piece of work.

Theresa M. Welbourne, PhD, is the FirsTier Banks Distinguished Professor of Business and Director of the Center of Entrepreneurship at the University of Nebraska, Lincoln. She is also the founder, President, and CEO of EEPulse Inc., a human capital technology and consulting firm in the energy business -- optimizing and directing human energy for growth and innovation. She also is an adjunct professor with the Center for Effective Organizations at the University of Southern California. Theresa was awarded the 2012 Academy of Management Distinguished HR Executive Award (for contributions in research, teaching and practice). Contact her at theresa@eepulse.com .
  • Changedoc10

    Great article on the importance of relationships.  Thinking of Fast HRM from a systems point of
    view, it feels to me that Human Capital represents the parts of a system whereas
    Relational Capital represents the interactions between the parts.     Our traditional organizational frame has
    always focused on the parts.   Fast HRM,
    and the environmental forces that make it necessary, instead tells us that what
    happens between the parts is more important than the parts themselves.
     

    I’ve been watching an HR
    organization evolve into a learning organization.  While this team has not consciously adopted a
    Fast HRM approach, I see some similarities. 
    Their journey requires them to alter their mental models of HR from the traditional
    mechanistic hierarchy to a more organic network.  Through this journey they have been drawing
    maps of their networked structure – very different from the typical pyramid
    diagram.  It actually looks more like spaghetti
    and meatballs, with network nodes scattered all over and interconnections
    between the nodes shown as lines.  These
    lines represent the relationships between the nodes as tangible and intangible
    transactions.

    The lines show the interactions of
    individuals in their HR network system.  The
    more relationships identified the more complex the map becomes.  Each relationship is identified for the value
    it brings to the network.  They slowly
    begin to see that the particular manner in which they interact can have unexpectedly
    profound consequences on the behavior of the network:  things happen faster or slower; certain
    relationships require more trust than others; some interactions generate
    greater complexity than the individuals themselves display.

    As the relationships are explored
    further and the map expands they see the network structure emerge more fully
    and naturally.  They begin to feel less like
    an “organization” and more like an interdependent structure of relationships whose
    interactions affects either their individual behavior or the behavior of the
    system as a whole.  The light bulb goes
    on when they realize that what happens and how it happens depend less on
    themselves as individuals and more on the network:  the network of relationships.
     

    Of course, this does not happen very
    quickly.  It usually takes two to three
    weeks – with some considerable soak time built in between – for any team to begin
    to change their thinking.  We talk about
    the two benefits of relationships:   growing organizational intelligence and being
    able to “see” the interactions so things don’t fall through the cracks of
    organizational hand-offs.  Relationships,
    and the interactions they produce, are the currency of what we call “flow”.  Flow of knowledge, flow of information, flow
    of meaning, flow of products, flow of services, flow of people.

    Building relational capital means building
    more high quality connections within and outside of your HR network.  As a node in the network each individual should
    be aware of new links emerging anywhere in the network: not just the usual
    places one may have always found them.   Research in network science has shown that well-connected
    nodes are more likely to attract new links while poorly connected nodes are
    disproportionately likely to remain poorly connected.  This has important consequences for Fast HRM
    in terms of speed and trust.  Finding short
    paths to the right information becomes particularly important in times of
    crisis or rapid change, when problems need to be solved in a hurry and no one
    has a clear idea  of what is needed and
    who has it.  The more relationships you
    have, the more connectivity you have; the more connectivity you have, the more
    trust you have and the more trust there is, the faster and greater the
    flow. 

    Creating and sustaining Fast HRM
    is really about making connections.