Episode 35: What is the Role of HR in Driving and Enabling Innovation? (Interview with Peter Hinssen, Co-Founder at nexxworks)

Unicorn startups are brilliant, but let's be honest, very few of us will become, found or work for one. Many people listening today will work for large companies struggling to keep themselves relevant for the ever changing customer. A handful of these companies are very good at reinvention.

My guest on this week’s podcast is Peter Hinssen, and he calls these companies Phoenix companies. They are able to rethink themselves in cycles time and again, they rise from the ashes of the old and they come out stronger than ever before. How do they do this? What is the cultural leadership that drives this and what is the role of HR?

Peter is a serial entrepreneur, advisor, keynote speaker and author of a fascinating new book, The Phoenix and The Unicorn. He is one of the most sought after thought leaders on radical innovation, leadership and the impact of all things digital on society and business.

You can listen below or by visiting the podcast website here.

In our conversation, Peter and I discuss:

• Why organisations need to become better at focusing on the day after tomorrow

• The role of HR in enabling and driving innovation in their organisation

• What HR can learn from marketing when it comes to delivering on the employee experience and understanding its customers, in this case, employees

• Whether AI and automation is a threat or an opportunity for HR

This episode is a must listen for anyone, frankly, but HR and business leaders looking to develop their organisations, looking to develop their culture, enhance their leadership models and also to understand the role that HR can play in driving innovation within an organisation.

Support for this podcast is brought to you by Crunchr. To learn more, visit https://www.crunchrapps.com.

Interview Transcript 

David Green:  Today I am delighted to welcome Peter Hinssen, author, speaker, co-founder and partner at nexxworks and lecturer at London Business School and MIT to The Digital HR Leaders podcast. It is great to have you on the show Peter.

Peter Hinssen:  Wonderful to be here.

David Green:  Can you provide listeners with a quick introduction to your background and what you are currently up to?

Peter Hinssen:  Sure. I spent almost 20 years in the startup scene, I had the chance to start early on when I was in my twenties. I built my first startup in the mid nineties, which was acquired by Alcatel, it was a large scale content management platform. The second one by Vodafone and the third was a company that IPO'd in 2006. In 2010 I decided to change completely and leave the startup life behind and focus exclusively on maybe sharing some of my learnings, that is where the teaching came in. I wrote a few books, one of them was Digital is the New Normal , that really took off. And now I spend most of my time working with large corporates.

Ironically after 20 years of startups, I work now primarily with traditional companies. But I love those companies that are capable of reinventing themselves and that is what I really try to focus on.

David Green: We are going to talk a little bit about that today because that is the theme of your new book. Now we came across each other at Unleash, I have seen you speak at a number of shows there over the year and you spoke at the show in Paris last October where I was MC on the main stage, which was great.

For anyone who even has a passing interest in the future of work I would really recommend seeking out a show that Peter is speaking at. I have always enjoyed the way you contextualise our exponentially changing world, which is probably a pretty big topic at the moment. What are the key evolutions that you are seeing and what are the consequences for organisations?

Peter Hinssen: Well, I think one of the wonderful things that we have seen in the last 10 years is, that a lot of these new technologies actually grow very quickly.

We have seen that even more in our personal lives and sometimes in the work environment but when I wrote Digital is the New Normal, 10 years ago, I had no idea it would actually happen so quickly. And I think what we are beginning to see is new normals, and I call them new normals, plural, are beginning to surface and actually become new normal, very very rapidly.

When people say, what is the new, new normal? I say, there is not one anymore it is a selection, it is a combination. Social is the new normal, big data is the new normal, mobile is the new normal, the cloud is the new normal. We see all these different things rising very quickly and I think we might be getting into what I call the never normal.

We see a sea of constant change and we have to get used to that. I think this is something that we struggle with in our personal lives. When I look at my kids, I have a 20 year old daughter and a 16 year old boy, and they are constantly challenging me because for them, this is simple and normal, the most natural thing in the world. I have a degree in computer science and I am constantly asking them, how do you do this? Or how does this actually work? My daughter tricked me about a year and a half ago, she had to do something for school and talk about what she wanted to be. She said, I want to be just like you Dad and I thought, wow this is one of those moments where you think, wow. Then she says, I see that you travel around the world talking about new technologies and know how little you actually know, it must be the easiest job in the world?

And I think this is something that we see. If you do not see how difficult it is for companies, organisations to adapt to these new normals, that is why we have this disconnect between the startup world, which take this for granted and the traditional world, where this is still a challenge. But new normals and maybe bracing ourselves for constant change and constant disruptions that might be actually the never normal that I talk about.

When you look at disruption, we have had digital disruption and we spent a lot of time talking about it in the last 10 years. But if I see disruptions that are going to hit us in terms of food or agriculture or health or energy, my God, I do not think you would be able to find a history book of the 21st century and take a time machine and bring it here, I am not even sure that Facebook would be a chapter. Maybe it is a side note. I think we have seen enormous change, but we really have to brace for fundamental change and a never normal.

David Green: And I guess that makes it really hard the bigger an organisation you are, generally speaking, the harder it is to move and respond and to try and be ahead of what is going on. Which I guess is the subject of your new book, The Phoenix and the Unicorn. It examines what enables certain companies to regularly reinvent themselves.

Can you provide a synopsis for listeners on what they can expect to learn from reading the book?

Peter Hinssen: So the idea behind The Phoenix and the Unicorn, actually came from observing some companies that were sucked into disruption and were capable of reinventing themselves and coming out stronger.

You would call this the rarest of beasts because as you said, it is easy when you are a startup and I think that is the reason why we have seen the unicorn craze in the last 10 years. New companies with no legacy, no what I call shit of yesterday, they just started with the green field can grow really quickly because they get new things fast and they become something which is an established economic environment, the Googles and Facebooks of this world, and now we have had 10 years of unicorn craziness.

I am getting a little tired of the Unicorn stories, but I really believe that the next 10 years could be the decade of the Phoenixes and those are companies capable of reinventing themselves. Maybe going through a difficult ride, but coming out stronger in the end. In a way I get more energy from looking at a Phoenix than yet another Unicorn because it is easier to do it when you have no legacy holding you back.

But if you are a traditional business and you have always done it that way, there is such a momentum to keep on doing what you know and that is wrong. I think that is where you probably will separate the ones that can, the true Phoenixes and those companies that are probably going to be disrupted in their very core business.

But the Phoenix is very real, you see a lot of examples now of companies really taking charge and I get a lot of energy from observing them.

David Green: I think you cite in the book examples like Walmart, which is a very traditional company, but it is definitely leading the way and innovating, what again is quite a traditional kind of industry as well.

Peter Hinssen: Yes and Walmart has probably been the number one inspiration for writing the book. I had a chance to go there about two years ago for the first time just to do a lecture. I was not expecting much because I knew them and they are the largest traditional retailer on the planet. But I saw them as a 20th century icon, not a 21st century icon.

What you saw there is, they were hit by the Amazons of this world, primarily Amazon, who was not just selling books and CDs, but started to get into groceries and online groceries. That was all of a sudden changing the entire landscape for a company like Walmart.

To see a company like that with 2.4 million employees, can you imagine that? I mean that's enough people for a small country in Europe. 2.4 million people changing what they do, how they do it, and reinventing themselves. They're headquartered in Bentonville, in Northwest Arkansas, I have been there many times and every time I go there I get such a jolt of inspiration from seeing what they do.

The technological innovation but also the social innovation, the way they think about new organisational forms. But their core business model is under attack and they need to reinvent themselves and to see a company like that actually succeeding, because they are now outperforming Amazon and online groceries, is a wonderful thing.

So it gives me a lot of strength to see that these Phoenixes actually exist.

David Green: Yes, I think I was at the Wharton people analytics conference last year and someone from Walmart was speaking about how they are using VR in recruiting and training and development. They showed this video effectively, you are a Walmart employee and you were in a scenario where there was someone with a gun in a store, and they showed how you can track that person and teaching the staff what to do. Which is incredible that sort of level of technology being used for learning and development, you expect it from Google and Amazon, you do not necessarily expect it from Walmart.

Peter Hinssen: I think the nice thing about Walmart, and of course the shooting example is a little bit on the one side of the spectrum.

David Green: Oh yes I am sure there are plenty more palatable examples too.

Peter Hinssen: I think what is interesting is Walmart is being changed by technology. So they have massive pickup towers in every Walmart store, which allows you to take a parcel and it is connected to the warehouse, you come in and scan the app, you get your parcel in 10 seconds. But they need to train the associates to deal with that technology, to work with the new tools and the same VR that is used in the shooting example is used to train the Walmart employees to use these new technologies. I think at this moment 1.4 or 1.5 million people at Walmart are being retrained using technology and they are using technology to train these people to use new technologies.

That is the fascinating thing about this. If you see the speed and the scale at which they do it, I think it took them a long time to realise that they really needed to act, but once they got into and they kicked it into high gear, it is amazing to see that kind of a transformation.

David Green: So there is a nice link between the Phoenix and the Unicorn in your previous book, The Day After Tomorrow, and that is what I have seen you present on a couple of times on stage at Unleash. That seems to cover what you need to do to innovate, how to make innovation a reality and then how to act on that day after tomorrow.

One of the ways you talk about how to bring that to life from the how is the hourglass model, which I think would be something I think our listeners would like to hear but also something we potentially can apply within HR as well.

Peter Hinssen: So the book, The Day After Tomorrow, was really a little bit of a wake up call on the fact that we need to look at things not just right in front of us, but things that used to be far away. You will have new technologies, new business models, new mechanisms, new ideas, and they are what I call the day after tomorrow, but they are hitting us faster and faster so we need a lens to do that.

But then people said, wow, that is really great, but how do you do that? How do you make that a reality? And I came across the hourglass model with one of the customers that I have been working with, it is a company called Medtronic, they are the largest maker of medical devices and most people know them because they are the number one pacemaker company in the world. It is a huge company and of course the world of healthcare and medical devices is changing at a rapid pace. They used to have a wonderful business but they were on their own but now everybody who wears an Apple watch actually has their heartbeat connected to the Apple system, and it is not unthinkable that Apple is going to play a role in these types of environments. So Medtronic realised they really needed to reinvent their lens onto the day after tomorrow.

So I learned the hourglass model from them and I developed it a little bit further into the book, but the hourglass is a typical shape where if you look at the top part of the hourglass, that wide part at the top, this is your lens, where you need to look at the day after tomorrow. That will be new ideas, new technologies, new business models, but you need a bigger lens than ever before because it is not going to come from your direct competitor, it is going to come from all over the place. But then you need to narrow it down and that is where the top of the hourglass starts to get more specific. You need to try things, you need to experiment and that top part is what I call sense and try. This is where you have the wide lens and you experiment.

When you figure out what to do then you drop it into the bottom part of the hourglass and this is where you need to scale and run it in the most efficient way possible. I would argue that most companies at this moment already have a very well developed bottom part of the hourglass. They are really geared towards that.

When I look at Medtronic, they realised that when they looked at, for example new technology investments, that more than 95% of their resources, money, budget, people were being allocated to the bottom part. They were spent on lean and six Sigma and scale and efficiency and that is brilliant but less than 5% was in the top part.

Since then they have shifted that, they now have up to 30% of their resources and budgets in the top part because they need to be open minded and try things and it means that you reallocate resources.

There are two things that I have learned, first of all, what is the ideal is it 30/70, or is it even 50/50 in the future?

I think companies that get into an environment where things are happening and changing faster, they are going to have to reallocate that. It also means that maybe the culture of leadership in the bottom part and the top part is different. The most important thing is they need to be aligned.

I have seen many companies where these two exist, but they are not aligned and then you have a very frustrated part of the organisation doing amazing, innovative stuff, and you have the rest of the organisation thinking "what are they doing?" And I think the alignment, the difference in allocation and leadership, those are things that I think many companies are going to be faced with in the next 10 years.

David Green: And HR potentially could be one of the functions that is helping make sure that that alignment is there.

Peter Hinssen: Yes I think if you look at the hourglass, I think HR can play a crucial role in ensuring that alignment, but you might even apply the hourglass to the HR function itself.

How much of the budget or the resource of HR is spent on running HR and how much is it on having that wider lens to look at new ideas or concepts or technologies that could influence the bottom part of the hourglass.

David Green: So let's talk a little bit more about what HR can learn from the hourglass model.

So I think from interpreting what you were saying this is where analytics can come in at the top half and really help organisations understand how things work from a people perspective and how that relates to some of the things they want to do on the business side. So if you are innovating in new areas, you need to make sure you have got the right skills in place. You need to understand what those skills are and you can be doing that kind of evaluation at that phase. Then thinking, how can we make that work within our organisation? And then scaling that.

Would that be one of the things that you would see?

Peter Hinssen: Absolutely. And I think it is not just that, I think there is so many opportunities and concepts and technologies that are available, but you have to be able to leverage that.

You need to understand, you need to experiment and then you scale. I think if I make a comparison we have actually seen that happen in the last 10 years in the marketing side of organisations, if I would do a presentation 10-15 years ago to a marketing department and I spoke about data, analytics, algorithms or AI, they would have thought I was a Trekkie, they would have no idea what I was talking about. But now if you walk into a marketing department of a company that really understands how to leverage this, you have data scientists and they talk about algorithms and they understand customers in a way that we could have never even imagined a few years ago.

So I think marketing has been transformed in the last 10 years in a significant way and I think HR needs to do exactly the same. There is a wide spectrum of new opportunities and technologies and they know that it exists, but you need the right people to deal with that. You need people to try and experiment and you need to constantly be alert of all the new things that are happening.

And then you can try and scale it down and run it. I am often amazed if I walk into an HR department of a big organisation that even the tools that they use are very 20th century tools, and often they will probably use much more advanced technology at home or even in communicating with their family members than actually what they are using inside the organisation.

David Green: And they expect their employees to use those 20th century tools as well.

Peter Hinssen: Absolutely. I think this is something where HR has a great opportunity in the next 10 years to maybe do a very similar thing that marketing has done, is to understand, leverage and then be able to scale and be seen as a leader on how to reinvent organisations.

David Green: Actually the link is obvious in many respects, isn't it? Because marketing is about the customer, a person or people and HR should be about the employees, people. So there is a lot, I think, that HR could learn from some of the stuff that marketing has done.

Peter Hinssen: And I think even more because what we try to do, of course, in the world of the consumers, we try to really understand the consumer. Everything that dealt with analytics was all about understanding consumer behaviour. I think what is now happening is we can apply many of the same things to the employee, but it is more than that, this is an employee in a network, this is an employee in relationships, and it is going to be, in my opinion, more about the relationship analysis than just the employee analysis.

But the potential to do something with that is insane and we are basically ignoring most of that data at the moment. I think it is something where you have to, of course, respect privacy and make sure that this is done in a professional and secure way. But the potential amount of information that we have and that you could work with is something that HR could really use to reinvent themselves and come out stronger and in a way HR could be a Phoenix in the next 10 years.

David Green: It could yes. I think it is that fair exchange of value, isn't it? As you talked about the privacy, the importance of privacy, and I think that is something that I see with the companies that we work with from a people analytics perspective.

But if you are providing that fair exchange of value and giving something to the employees then why not?

I think the other sort of theme I was thinking around there is this whole thing around experience. So again, from a lot of those data points, marketing learnt how to segment their customers very well and they personalise things for them.

We can start to do that with employees. We can understand more about moments that matter for individual groups of employees and actually serve stuff up that is data based to help them and to help the organisation.

Peter Hinssen: Yes and I really believe in that exchange. I think we are beginning to see that in the consumer environment.

Privacy is important, but we see more and more of the consumers are saying, you know what, I am willing to share more if I get more. And I am certainly one of those consumers. I will take Waze as an example, I would not drive around Belgium where I live without using Waze and actually the more I give them information, the smarter they get.

But I get value in return because I get to my appointments on time and I think we are starting to understand that type of give and take type of mechanism in the consumer world.

I am absolutely convinced this has enormous potential in how we think about employees. It is not just the moments, but employees are giving off information and they are radiating data.

And if you would find some mechanisms to bring that back and turn that into value for the employee where they understand no and it can improve them, it can help them think about their career and their development, their relationship, their network. And I think especially with the next generation that is coming, I hate the term digital natives, I think it is one of the dumbest things we have ever invented. The next generation is not digital, they are network natives. They have learned how to behave in the network and I think if you can put the power of analytics and AI and combine that with a network based approach, you have an enormous potential to actually make HR stronger.

But the role of HR is going to be less on the operational side. It is going to be a lot more on the creating value side and that is of course something where we are probably going to need quite different people in HR as well.

David Green: And more rewarding potentially for HR as well, if they are creating value rather than controlling, which is the traditional HR function of the past.

I am going to ask you a question now about the key attributes of a successful Phoenix, but I am going to hypothesise what you talked about, the power of networks, and I wonder if one of those key attributes is the fact that they will be able to understand how the network works within their organisation and make sure the right teams are collaborating with each other?

Peter Hinssen: Yes, absolutely. If I would look at the key characteristics that make a Phoenix really successful, one is very clearly a sense of urgency and of course you have many sectors now which get into the vortex of disruption and then it becomes very apparent.

I take the retail example Walmart was doing fine, and then Amazon comes along and just shakes up everything, then you realise we are in the middle of this. I think we are now seeing sector after sector get into that. I think finance and insurance companies and banks are next, but this is something where the sense of urgency needs to be tangible. Not panic, but sense of urgency.

This is something that frustrates me from time to time, you probably have the same thing, you get invited to a company to do a talk and you talk about all the things that are changing and they love it and then they invite you back a year later and you think, wow, I am curious what they have done. They have done nothing.

You get the feeling that sometimes what we do is we talk about the changes, but then sometimes I feel like it is like executives who watch a zombie movie and they go back to the comfort of their house and say, oh, thank God it was not real. But this is something where the sense of urgency needs to be very real.

The second thing that I think is very important is you need to develop a clear vision of where you want to go as a company. Taking into account your legacy because you have legacy. With the Walmart example, they have 5,000 physical stores in the US and you cannot just close them down and just become purely online.

You need to figure out how to combine online with offline, but that is a vision you need to develop.

The third thing is very clearly what I would call true leadership, you need people at the top who really believe this. Going back to the Walmart example, one of the great things is the CEO, Doug McMillan, was I think one of the first CEO’s of Walmart who had a lot of international experience.

Doug McMillan ran international, he saw what they were doing in China and maybe even more than Amazon, he saw that how China was rethinking retail and that really gave them a top down commitment to say, this is what we are going to do.

A very important aspect is I think empowering the innovators. I meet too many companies, you are probably the same, where you have some brilliant people doing day after tomorrow stuff, and they are the most frustrated people I have ever seen. If you do not really empower them you are just gonna make it worse.

The fourth is figuring out that this is something where it is not just about the outside world, about making sure that the customer is drawn into the 21st century but bringing the organisation into the age of networks and figuring out how to maybe reinvigorate, what you can do with the talent that you have in the company.

I think that is absolutely vital if you want to reinvent yourself to be a Phoenix.

David Green: So you have talked about Walmart, there are other examples that you give in the book.

Microsoft is one could you talk a little bit about them?

Peter Hinssen: Well, I think it is wonderful to see traditional companies reinvent themselves and in the world of technology you may say, it is logical, but it is not. We have seen in the last 50 years, amazing technology companies that have changed our lives just basically fall apart, Kodak is the obvious example. But even a company like Hewlett Packard, which you can still watch the original garage in Palo Alto but you would not call Hewlett Packard now the most innovative company in the world. So it is actually maybe even more difficult for technology companies to reinvent themselves and that is why I love the Microsoft example.

20 years ago, nobody really loved Microsoft and we thought they were quite arrogant, then there was the tax on Windows and Office. Then 10 years later, all of a sudden this was a company in trouble. They were building mediocre products that, Windows XP comes to mind, terrible. And it was not about the people, I do not know who said it probably somebody from Google who said, there is probably seven Googles inside of Microsoft but they are not getting out anymore. And it was a company that was used to success, was in trouble and under Steve Ballmer, I think they almost missed the boat.

Then when you saw new leadership coming in, and I think Satya Nadella has been a great inspiration also in writing the book, to see them transform themselves, sense of urgency, but also a very clear vision on what they want to do. The first thing they did is said, we are going to stop ignoring that Apple exists.

You know what? We are going to give out Office for free for people who have an iPad. That is a different positioning. But I think also the changing culture and the way they are rethinking the organisation is phenomenal to see that. So for me, Microsoft is an absolute example of a Phoenix.

If you see that they have changed their core business model from upfront payments to a cloud pay as you go without even one financial hiccup. They did not miss a quarter and were able to do that and become one of the most valuable companies on the stock exchange. I think that is a great example of what a Phoenix can actually do.

David Green: And it shows the importance of leadership and having the right culture. I think proof that big companies can change their culture.

Peter Hinssen: Absolutely. And of course there is always a correlation with the leadership aspect. If you see Satya Nadella, I think he is probably the number one power of such a massive Phoenix transformation, just as Doug McMillan is at Walmart. If you look at Disney, Bob Iger just resigned but if you saw Disney which is a Phoenix in itself. You just have to see what they are doing with Disney+, they are becoming a tech giant in a way. But I think a company that was not doing very well 10/15 years ago with very clever acquisitions, everything from Marvel to Star Wars, Pixar, but then the leadership to actually transform the company I think is probably the number one thing that really makes a difference.

David Green: So, Peter, I am going to come back to something that you mentioned earlier in the conversation and it is something we covered a couple of weeks ago. It is about HR really and the different skills that might be required.

Actually in our conversation a couple of weeks ago, you said all this stuff scares the living daylights out of HR, which I thought was a great phrase, is that about mindset or capabilities or a bit of both? How can HR step up? How has HR stepped up in some of the organisations that you have mentioned for example?

Peter Hinssen: I think it is both mindset, competencies and skills. I love doing conferences where there are HR people in the room because I have the same feeling as I had when I was talking to marketing audiences 10 years ago. But you often feel when you talk about these things, it is deer staring into the headlights of the upcoming car and I think there is a sense of frustration with many of the HR organisations that I meet, because they fear that they do not have the type of skills inside the organisation to really tackle and deal with that. Technology is something which is still I think weak in many HR organisations, but it is also the mindset of trying things and experimenting.

We do not know what the definitive new HR will be like and we cannot wait until the final HBR article is out, we are going to have to try this. I think getting that mindset of experimentation going, and in a way, this is a perfect example now, we are in the middle of the whole Corona hype, where the whole world is going into a lockdown situation. But then you see that the potential of working remotely and using new techniques, whether it is conferencing or different types of realities or mixed realities, but there are so many opportunities to redefine work. In the last 10 years, when you talk about the future of work, many HR organisations would think about how they would rearrange the furniture. But that is not the thing. It is not open space or not, it is about fundamentally rethinking what is the fluidity of organisations and in a way this biological disruption is a great test. But how many HR departments take that and say, I am going to do something with this. I am going to change how we experiment.

I take the analogy with marketing 10 years ago, digital happened and an online consumer became a thing. What happened is the IT department was actually not ready, it was the marketing department who took that and then you had a lot of the IT people saying, oh, it is not fair you see marketing departments having more technology budget than we. I always joke that the worst job to have in the boardroom the last 10 years was the IT manager because the world was talking about self-driving cars and you would ask the CIO, what are you doing? I am upgrading SharePoint. Well, that was not a good position to be in, but the marketeers seized that and as a result, they understand technology now.

The same thing is now happening in the world of HR. There are so many reasons to act and I do not think HR should just sit and wait and say, well IT should figure it out, no this is their opportunity to rise and shine. But it will be different skills and a different attitude. I would not want HR to be the worst job in the boardroom, but they are going to have to take charge if they really want to leverage this opportunity.

David Green: I am sure it is one of the most challenging jobs in the boardroom at the moment with the Corona crisis, as you mentioned. HR needs to invest more at the top of the hourglass, more research, more experimentation, more analysis.

Peter Hinssen: Wider lens and also bring in the skills so that they can understand and experiment with these opportunities. It means that they are going to have to invest in people that are data scientists and that are technologists and that are people who are going to have a very creative way of thinking about new concepts.

But I think we are not just in a shift where the employee has to go into the digital environment, this is about where we are going to see different types of organisational structures. We are going to see fluidity happening, and technology is going to help empower that. But it is not about tech enabling employees, it is about fundamentally rethinking what is the nature of work. I think we are going to probably see a lot more fluidity and flexibility coming in and that is going to be a huge change in the role of HR. That transition is something where HR should not be the operational partner, it should be the thought leader partner. It should be the challenger. It should be the person in the boardroom that everybody says, Oh my God, HR is going to give a presentation. Wow. That is going to be really cool to listen to. Where in most cases, that is not the case today.

David Green: But it is interesting, in the three companies that you have mentioned as being Phoenixes, Microsoft, Disney, and Walmart, they all have very visionary CHRO’s or Chief HR officers and all have very accomplished people analytics teams. So they have almost taken that cue from marketing in many respects and bought some of those skills within the people function. Because ultimately to be a Phoenix, you need to have the right people to be able to adjust as you move forward.

Peter Hinssen: Absolutely and I think what you see is that in those companies, it was the true leadership of the organisation that needed and wanted extremely strong CHRO people in that position. If you would see the composition of the teams that they have in HR, it is fundamentally different than what they had five or 10 years ago.

I think that is something which might be a clue for HR organisations if they want to try and reinvent themselves.

David Green: One other area that we were interested in, in the PWC CEO survey published in January, re-skilling was one of the top four things on the minds of CEOs.

Those organisations, again, that you mentioned seem to be very good at understanding the skills that they need to actually reinvent themselves. So what are you seeing on things that organisations are doing very well around that whole re-skilling and up-skilling of their workforce?

Peter Hinssen: I think we are beginning to see that the idea of re-skilling becomes the top priority of most organisations. In the case of Walmart this becomes a massive challenge just because of the scale. If you need to re-skill more than a million associates, that is a big challenge. And I think that the biggest problem is what are you going to do with the older skills?

You take a company like AT&T in the US for example, who have hundreds of thousands of technicians that were technicians for the 20th century, but in a world where all of a sudden you do not need to connect wires anymore, it becomes wireless. You need different types of skills. You even need to retrain the STEM people.

I think this is not something where you solve it for digital. This is something where you are going to need to continuously do that, so the continuous re-skilling is going to be an issue. You see platforms in the US like Upskill America trying to do best practices. I think in Europe it's going to be something that is something that we need to really step up our game.

And of course there is a link also not just to what companies are doing, but also the educational system and how we are going to maybe prepare people for continuous re-skilling. I do not think we are doing a very good job at the moment. We talk about lifelong learning, but the reality is how many 22 year olds do you know who finish their education and say, oh wow, that was fun, I want to do it again. Unless we get that mentality, it is not going to happen.

But I think a bigger challenge is going to be, how do we make sure that people are aware that they need to do it themselves? That they should be more aware of how relevant are my skills?

I always make the comparison when I talk about consumers. If you want to do something relevant to the market there is only two questions, are you essential, do you provide things that people really need? and are you relevant? And if you do not have both, you probably have a problem. We need to probably get that same type of thinking inside organisations. If you are an employee, do I provide something that is essential, because my company really needs the things that I do, great, but then how can you make sure that your relevance actually goes up instead of going down? There are too many people in organisations who I do not think have that mindset and culture yet. And in that sentence, HR is probably going to have to be the guide to actually, focus on the relevance of employees in a world which is not going to slow down, but actually keep evolving faster than ever before.

David Green: Well, Peter I have really enjoyed the conversation. We are coming on to the last question now, which is the one that we are asking everyone in this series. Again you can probably extend beyond HR, but AI and automation, which is a big topic as you know, across the industry but certainly within HR.

Do you see them as an opportunity or a threat to HR?

Peter Hinssen: Absolutely an opportunity and I think this is something where if you look at the bigger picture the combination of AI and automation is going to change a lot of jobs but I think I am a perennial optimist about the fact that man plus machine is always going to do a better job than just either man or machine.

I was very fortunate to visit the Hamburg opera house recently. Have you been there?

David Green: I have not, but it is on my list of places to go.

Peter Hinssen: It is beautiful. It is a building which does not have any right angles, It is completely organic. But it was designed by a team of architects and AI so that every person sitting there has perfect acoustics and this is not something that one human could have done or one machine.

I believe in the power of human plus machine, and therefore I do not think AI and automation is a threat, but you have to be realistic. You need to re-skill to employ that. But if we do that, I think the power of using these tools is going to give us super strength. That is what we need to focus on.

David Green: Well Peter, thank you very much for being on the show. How can people find out more about you and stay in touch?

Peter Hinssen: My website, peterhinssen.com and it has links to the blogs and the books and the lectures.

David Green: Peter, thank you very much.

Peter Hinssen: My pleasure.