HR’s Reinvention: Moving from Benchmarking and Best Practices to Guidance

Like other functions (and organizations, leaders, and individuals), HR needs to continually reinvent itself to realize its potential for creating, delivering, and capturing value.

Recently, we have had conversations with thoughtful HR trendsetters. They almost all propose reinventing HR through benchmarking and best practices. Benchmarking reports how well HR is doing against a standard (global, industry, or historical norm) to build on strengths or to overcome weaknesses; best practices suggest how to improve by learning from others. Both have had a long history in shaping the HR profession and both will continue to be important, but we must take them a step further.

Now is the time to reinvent HR by pivoting from benchmarking and best practice to guidance. Instead of improving by comparing oneself to others and by adapting what others do well, we must move beyond these descriptions of HR work to prescriptions. Descriptions chronicle what has been or is being done; prescriptions anticipate what should be done. Descriptions focus on activities or initiatives; prescriptions focus on results. Descriptions compare oneself to others; prescriptions show how to improve oneself to achieve desired results. Descriptions benchmark and seek best practices; prescriptions guide choices to deliver results through vested practices.

We have reviewed how benchmarking should pivot to guidance. Let us now propose why best practice focus needs to evolve to make guidance happen.

Pervasiveness of and Challenges to Best Practices

For decades, all of us in the human capital profession have relied on best practice logic. We observe what leading companies do and try to distill and share that information with others. Best practice work shows up as case studies of leading companies in seminars, talks, articles, books, workshops, and training sessions. Best practice work shows up when consulting firms recommend to their clients the innovative work that their other clients have done.

But using best practices falls short when human capital issues become ever more central to changing business conditions. Consider the following examples.

1. Best practices focus on others and not oneself. Here’s how this might be remedied: At a personal level, I don’t need to be as (fill in the blank: well-dressed, wealthy, educated, cheerful, etc.) as someone else, but I do need to take care of myself well enough to have personal well-being and fulfill my potential. In human capital work, comparing to and learning from others is good, but the primary agenda should be determining whether or not the human capital “best” practice will help your company meet its unique goals. The benchmark should not be others but yourself and working toward personalized goals.
2. Best practices focus backward more than forward. Learning what others have done will always leave you behind them as they reinvent. As one leader said, “I hope others will copy our programs today because by the time they have copied them, we have moved on to the next practice. They will never catch up by copying us.”
3. Best practices are often piecemeal and not systemic. Too often a best practice is considered in isolation (e.g., here is what a leading company did in leadership training), but not within the entire context (leadership training occurs in the context of hiring, performance management, executive commitment, cultural norms, and so forth). Adapting only a piece of the overall system does not often transfer success to another setting.
4. Best practices create circular thinking. Observing and learning from others often causes us to share existing ideas rather than innovate new ideas. Progress comes from spiraling forward more than recycling the past.

Benchmarking that leads to using best practices has been and will be a fundamental approach to improving human capital, but to reinvent HR, we need to build on that work and meaningful pivot to guidance (see Figure).

Moving to Guidance

Guidance builds on benchmarking (which sets a baseline for how your organization compares to others) and best practices (highlighting which practices others have successfully used). Guidance focuses on what should be done to deliver your organization’s results from human capital investments.

Step 1: Define desired results.

HR is not about HR but about helping five stakeholders receive outcomes that matter to them: employee (productivity and well-being), strategy (direction and execution), customer (net promoter score and customer share), investor (financial results and intangible confidence), and community (reputation).