HR meets Silicon Valley

The DNA of success, a magic mix of culture, organisation, leadership, talent and skills - also known as COLTS - as a guarantee for innovation? Every country and every company has a culture, an organisation, an interpretation of leadership, a piece of talent and skills. But not every culture and not every organisation promotes innovation.

So what do successful companies, start-ups and business models made in Silicon Valley have in common? For one thing, they share a culture of trial and error, testing and prototyping. The motto is to get to market quickly and test an idea instead of spending years developing concepts in perfectionism. And secondly, they have all managed to change the rules of the game. Real innovation requires disruption. Not a "we've always done it this way" culture. Real innovation changes the habits of the masses. Airbnb, Uber and Facebook have shown the way.

Between innovation and tradition

One thing is clear: our landscape alone clearly distinguishes us from Silicon Valley. The mountains are an integral part of Swiss DNA - characterised by tradition, agriculture and cantonal thinking.

The Swiss farmer symbolises a rather conservative culture. However, the values that are close to our hearts - precision, predictability and stability - unfortunately often act as a brake on innovation and creativity. Despite this, or perhaps precisely because of this, Switzerland has always been open to new ideas. For example, the Internet was developed at CERN in Geneva a good 25 years ago. Overcoming physical and virtual mountains is also one of our cultural strengths. The Swiss IT Industry is known for being particularly open and innovative. When the first standardised ERP solutions came onto the market 30 years ago, Switzerland, together with Germany, was a pioneer, almost a role model. Swiss decision-makers are characterised by openness and a willingness to take risks. Today, three decades later, we are experiencing something similar: Switzerland is one of the most innovative countries, particularly with regard to the use of modern cloud products. For example, Switzerland has topped the Global Innovation Index for the sixth time in a row.

So is it possible to be old-fashioned and forward-looking at the same time? Yes, because Switzerland is used to remaining flexible. With its four national languages, numerous dialects and diverse "cantonal spirit", it offers a multicultural foundation that provides an excellent breeding ground for innovation.

The future of the cloud

According to market researcher Gartner, in four years' time there will hardly be any companies that rely on a "no cloud" strategy in IT. The cloud will soon no longer be an option, but a necessity.

However, companies are often still hesitant due to concerns about data protection and security. The fact that the security gaps in their own systems are often significantly greater than in the cloud is irrelevant - after all, this is a cultural change that cannot be forced through pressure.

Here, too, Switzerland is demonstrating its pioneering spirit. It occupies seventh place in the global cloud computing export market, directly behind major nations such as Japan and Germany.

In-house operated software solutions are increasingly becoming a dying breed - even if it may be decades before the last relic of this kind is completely replaced. Compared to cloud solutions, in-house systems are simply too expensive, too cumbersome, too inflexible and not scalable enough to be profitable in the long term. Added to this are slow innovation cycles, high maintenance costs and the loss of expertise for the operations of such systems.

Some companies believe that they are so specialised that no cloud solution can meet their individual requirements. This is a misconception! Anyone who thinks that cloud solutions are standardised, one-size-fits-all solutions is wrong. High-quality cloud products are in no way inferior to customisable on-premise systems. Quite the opposite: they often offer even more flexibility.

The magic of sharing

But let's be honest: the cloud is just a technology. Sharing Software and computer capacity with many other users. But switching to the cloud alone is not enough. It's about changing the rules of the game, and Technology can of course be a vehicle for this.

Tesla, for example, is an excellent example of innovation and the courage to try new things. But Tesla has not yet achieved true disruption, because the rules of the "car" game are still classic. You decide on a car, you buy or lease it, you drive it, sell it at some point, and at the end of its life cycle it is scrapped.

We are still in a world in which the car is a status symbol - an impulse of "wanting to have" provides the impetus to buy, and in most cases the beloved vehicle sits unused for more than 20 hours a day. With innovative Technology, however, there could be a real change in the rules of the game in the future and thus a movement of "the masses". The charm lies in combining the idea of mobility with the Technology of the self-driving car. You need a mobility service "on demand": you order the car in front of your house via an app and have it take you from A to B. The car drives to a collection point or back to its owner or is taken over directly by another "user". Payment directly via app. In such a scenario, the cloud concept of sharing would be perfectly realised.

In general, sharing is the magic word of today. You make your knowledge available to others (internet, intranet, blogs, forums). What you have too much of or don't need at the moment is "lent" to other people for a limited time, as with Airbnb. Or the individual no longer owns "the thing" at all, but obtains it on demand - from the cloud. From this perspective, the Tesla has not (yet!) reached the pinnacle of innovation.

So how and what can HR learn from Silicon Valley? Turning the innovative spirit of Silicon Valley into an HR paradigm is an opportunity to become an employer of choice and remain competitive.

State-of-the-art Technology is a must for modern HR organisations, a calling card of the company. This starts with the way in which employees record their working hours or expenses or the access they have to training programmes.

However, state-of-the-art cloud technology alone does not bring about HR innovation. The ingredients for innovation are culture, mindset, the courage to try things out and new ways of working together. The magic word sharing - what does this mean for HR, apart from simply obtaining Software from the cloud? Physical workplace sharing was certainly a pioneer of this concept. From today's perspective, this is old hat, but 20 years ago it massively changed the rules of the classic workplace. An employee comes into the office and no longer has their own desk, but instead gets one from "the cloud". No family photos next to the PC, no Jucca palm in the corner. A renunciation of possessions. So sharing to save costs is not so new.

A slightly more modern example from payroll accounting: why should a company still have its own payroll accountant today? A shared service centre can take over this task and the company benefits on many levels. No personnel risk, fixed service level agreements, clearly defined services and guaranteed legal compliance are just a few examples of the benefits of sharing payroll expertise.

Another key topic for HR is knowledge management. Due to the generational change in particular, many companies are in danger of losing a massive amount of knowledge and expertise when the baby boomers finally retire. Knowledge management is a prime example of the "sharing" paradigm. Sharing knowledge and making it available while keeping it in the company when individual knowledge carriers leave is a challenge that needs to be addressed with suitable technology and a change in culture.

Silicon Valley is showing us how to break the rules and define new rules of the game. Here, too, is some food for thought for HR. Do we still need permanently assigned line managers today or would a pool of coaches not suffice? Today's employees are autonomous and self-organised. They receive the information they need for their work electronically. They don't need superiors to pass on or withhold information. The traditional line manager belongs in the analogue world and is almost obsolete in this form.

If we continue along this line, we should also scrutinise the traditional appraisal interview. If we no longer need conventional line managers, then this relic will also have had its day. We can replace it with situational coaching, e.g. through mentors or project managers - so-called temporary superiors. The Elbdudler agency even went one step further and let employees determine their own salary. This is a massive change to the rules of the game. You could almost call them spoilsports. What is not, must not be? An example of real innovation.

Who says that meetings have to be held sitting down at tables? Sure, that's already clear from the word meeting. But perhaps we should remove the term from our vocabulary altogether. In some companies, meetings are held standing up. In the context of agile project methods, for example, there is the "daily stand-up meeting". But can you do sport at the same time as a meeting? That doesn't make sense, do you think? Google is breaking the rules here and using the conference bike, which allows up to seven people to cycle and meet at the same time. The advantage? Instead of literally remaining seated in our mental positions, it gets our thinking moving. And at the same time, it's a real physical fitness booster. Yes, we can!

HR departments are not just the custodians of personnel. HR can drive innovation. HR plays a key role when it comes to reinventing itself as a company. HR can and may reinvent itself.

Solutions from the cloud

The majority of HR systems available on the market today are cloud-based; this is particularly true for the competitive market of talent management solution providers. The appeal of cloud-based solutions is obvious: HR benefits from short implementation times, predictable and transparent costs and can free itself from the often gruelling dependence on internal IT. End users benefit from state-of-the-art user interfaces, mobile applications and almost self-explanatory processes.

But beware! Not all clouds are the same and a cloud-based solution is not synonymous with innovation. Looking at the architecture of today's HR solutions, two variants dominate the market. On the one hand, there are the so-called hybrid approaches, in which companies connect cloud-based talent management to existing in-house HR systems. On the other hand, there are fully cloud-based models in which the entire HR process, including payroll accounting, is moved to the cloud. From a technological perspective, the second option may be the winner in terms of innovation. But how relevant is that really?

Employees are primarily interested in their payroll being correct and comprehensible - the IT basis on which this is done is of secondary importance. For the HR payroll accountant, the most important thing is that the tool used works - whether it is hosted in the cloud or in the company's basement plays a subordinate role. The decisive question should therefore not be "Cloud or no cloud?", but rather: Which HR Services does the company need and which of these should be provided internally or sourced externally? A provider of HR Services will probably opt for cloud-based Software anyway for cost reasons. But this is merely the Technology and not the essence of the Services offered.

Another important point is the functionality of the underlying software and the processes that are mapped in it. Is the software designed for a conservative world of line managers, employees and fixed processes? The employee appraisal serves as a good example here. Does the Software necessarily require a clearly defined line manager in order to map the employee appraisal process? What happens when line managers become dynamic coaches and fixed meetings are replaced by spontaneous checkpoints?

Time and again, HR departments are subject to the constraints of software solutions, which often nips genuine innovation in the bud. However, this is not a plea against IT-based HR solutions, but rather an appeal to see Technology for what it is: a tool. Nothing more. And nothing less.

An ode to Switzerland

We live in a country with strong values and healthy democratic politics. This gives Switzerland peace and stability.

At the same time, we benefit from a diverse, multilingual culture that shows us that there is not just one right way. This openness protects us from stereotypes and promotes diversity.

Our culture does not see mountains as insurmountable obstacles, but as protection and a challenge at the same time. This thoughtful and considered attitude is one of Switzerland's strengths and should definitely be maintained even in the high-tech age.

We cultivate a family culture in which values such as honesty and common sense still play a central role. Switzerland manages to strike a balance between Digitization and the preservation of time-honoured traditions. For example, we protect our farming culture with high subsidies, but at the same time remain open to progress.

We are in the fortunate position of being able to embrace the spirit of Silicon Valley. It takes courage to try out new things. But it also takes courage to remain conservative and "Swiss". Switzerland has this courage.