With some colleagues from ANU and the Australia and New Zealand School of Government, we have been thinking about how to demonstrate hidden value in complex dynamic public service systems.
To break that down a bit more, what we mean is how can people in certain types of roles and functions a) understand the value they create and b) demonstrate that value to others? We’re talking about the types of roles that are less about directly producing or contributing to publicly valuable outputs, and more about facilitating levers within the system to ensure that publicly valuable outputs are eventually created; the types of jobs where you can’t look at an output and say “hey, I created that”, but you know that what you’ve done somehow influenced its creation.
HR business partnering
The aim of the project is to examine hidden value in several different case study contexts, and the first context we have examined relates to the human resources (HR) business partnering function in the Australian Taxation Office (ATO). HR business partners exist to actively integrate the business strategy with people management practices – so they are strategic connectors between business and HR. Any large organisation will have several different business lines and a commensurately large HR department comprising a number of different specialist functions (e.g. training and development, recruitment, industrial relations). Assigning an HR business partner to each line (in theory) ensures that business line executives can go to one person to facilitate all their HR needs, and that business partner will either get them the right answer or connect them to the right people within the HR area. Crucially, business partners also provide high-level strategic HR advice to their business lines, and due to their familiarity with the particular business line, can progress corporate HR initiatives in a business-relevant way.
But one of the problems faced by this function in the ATO was how it could demonstrate its value. There were few standard HR or business-relevant metrics that business partners could point to and say that this happened as a result of the business partnering team. Business line clients were generally very positive about their business partners and valued their work immensely, but couldn’t decide exactly how this could be measured. We interviewed 17 business partners and business line clients to determine how the business partnering function created value and think about how that value could be demonstrated.
How do HR business partners create value?
Through talking to all these people, we realised that business partners created value in many different ways:
- As a one-stop shop for HR needs
- As a strategic adviser on HR issues
- As a business-relevant translator of corporate HR priorities
But business partners don’t control the levers they are trying to influence, either when organising for HR specialists to do something for clients, or when advising clients about HR issues. One business partner reflected (emphasis added):
So there are parts of [HR department] where there is that clearly defined work, whereas we in the business partner sense, anything that we are looking to develop as a solution or strategy or something to address a workforce need in the client, we are reliant on others within [HR department], working with others, with our colleagues, to come up with the solution or whatever it is that we need to address what it was that we’re trying to address.
So at its heart, we thought what they did was about influencing agentic decisions. What this means is that business partners are required to influence senior people to make decisions in a particular way when they could have decided otherwise, with the aim of improving workforce-related outcomes. As one business partner put it:
…the value of the BP function for me is in the ability to influence or change a decision, a business decision, prior to it being made, based on the impacts that has on its workforce.
Through their business line knowledge, through their HR generalist knowledge, through their broader view of their own and other business lines within the organisation, they provide advice to business line decision-makers in ways that influence executives to change the ways they think and make decisions about HR issues. This is what happens when a business partnering function is working well.
Spanning boundaries and creating levers
Thinking more about what in the business partner role enables them to influence agentic decisions, we realised a key part of the role is boundary spanning. Business partners connect business lines to HR specialist areas and vice versa, sometimes bringing together multidisciplinary teams to address emerging issues; they horizon scan for HR practices and initiatives to bring in from outside; and connect with each other and thus have an overview of many different business lines within the organisation. As one business partner reflected:
…it can be quite hard to describe what it is I do, but I sometimes describe myself almost as a concierge for [the HR area], so I operate on the sort of premise or principle that anybody within [business line] who I look after can contact me. So whatever the HR or workforce issue is, they can contact me, and if I don’t know the solution to the problem or I don’t have the necessary advice to answer their question, I will refer them to a colleague in [HR area] to get that advice or I will go and seek the information on their behalf. Or if it is a larger piece of work, as an example, I would go and broker with some colleagues in [HR area] to do the work to support whatever that need is that’s come from the client.
Through these boundary spanning activities, they create levers for change by facilitating work rather than doing the actual work themselves. If a system is to change there has to be an alteration in the way that something is moving within it. In this perspective the role of the business partner is to establish what is currently either holding a system in place, or pushing it in the wrong direction, and then advise others into how to create an alternative set of levers. For that they need to be strategic ‘thinkers and advisers’, for the most part staying out of the tactical (and more easily measurable) realm.
Relationships and trust
It was clear from our interviews that developing and maintaining trust (particularly with senior business line managers) was critical, as without it advice would be neither sought nor followed. This would prevent any opportunities to influence agentic decisions. Both client and business partner interviewees overwhelmingly emphasised the importance of relationships and trust in maintaining an effective partnership, but felt that measuring this could be difficult:
…so for me success is all about that relationship and developing and maintaining the relationship, [for example] a Deputy Commissioner will pick up the phone and contact me or email me and ask me for advice on a particular matter, which is fine, but how that actually translates into the effective operation of their business and how they achieve their business outcomes, which then flow on through to the ATO achieving its goals, it’s not really quantifiable.
Despite the difficulty of measurement, some clients felt that an improvement of relationships and trust over time (in one example, from “not a great relationship” to “a really strong relationship now”) had really added to the value of the function:
And one of the things absolutely within that [improvement] is, there is that element of trust. Like at the moment, I might question, but more so from a strategic perspective. I don’t ignore advice. Whereas previously I would get advice and I really would probably question it.
Implications for demonstrating value
So, according to our analysis, a business partner creates value through influencing agentic decisions, for which they span boundaries, create relationships and trust, prioritise business line knowledge, and build a consistent brand. The kind of people who perform well in this role can be described as operating with political astuteness. Since the value they create can’t easily be captured through traditional HR metrics or project management outcomes, we started thinking about alternative techniques.
We felt that business partners’ value could be demonstrated partly through understanding the quality of the relationships formed, perhaps through developing a tool to administer to both business partners and clients about relationships and trust. Relatedly, the ATO’s HR area could systematically collect stakeholders’ feedback on their feelings about the value and operation of the function.
Finally and perhaps most importantly, we thought the business partner function could consider how to identify and measure changes in behaviour rather than relying on final outcomes to demonstrate the value of the function. This could involve recording baseline measures (e.g. attitudes to particular ways of working) to enable later measurement of desired shifts. Then as the work progresses, it will be possible to consider whether stakeholders are talking and thinking about things differently now than they were before business partner staff started to intervene and influence.
We think these insights will have applicability to other ‘hidden value’ type roles within complex public service systems, and we hope to draw these out through further case studies.