Interview by: Boyi Wang
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Mr Wayne Chen, Managing Director of Hay Group Northeast Asia, is an established HRM consulting practitioner. In the past decade, Mr Chen, overseeing Shanghai-based Hay Group China operations, has been engaged in facilitating client organizations to embrace ongoing unprecedented changes.
Hay Group is a Philadelphia-based multinational management consulting firm working with leaders to transform strategy into reality. With more than 2600 employees working in 85 offices in 48 countries, its focus is on making change happen and helping people and organizations realize their potential.
Given significant demands in organization development and talent management in China, Hay Group China has shifted its focus on HRM practices by working with clients to transform people strategy into reality. Mr Chen joined Hay Group in 2000. An expert in organizational and leadership effectiveness, Mr Chen has helped numerous organizations across industries with major clients including Air China, China Resources, Philips and Volkswagen.
Hay Group China has grown rapidly under his leadership, not only in strengthening their expertise in Hay Group’s traditional HR consulting services of rewards, job assessment and performance management, but also permeated to value-added HRM practices, such as organization development, talent management, and change management.
In this interview, Mr Wayne Chen, is invited to share his rich management consulting experiences and insight on HRM and related issues in Chinese organizations. The interview is conducted in Chinese and translated into English by Boyi Wang, a doctoral candidate at Antai School of Economics and Management of Shanghai Jiao Tong University.
Boyi Wang: Can you start with the focus of your HRM practice in China? With regard to your influences over your focus, how do you think about your strategic role in your practices?
Wayne Chen:
Among the focal areas under my responsibility, the first is to reform management structures and functions to promote organizational transformation. Closely related to this is to develop senior leadership teams, especially in the areas of selection, training, and key talent development. In addition, during the process of a company's strategic transformation, our work has been focused on coordinating with the organizations’ core businesses. For example, in shaping the right leadership behaviors, organizational culture, and management, I often align these tasks with client organizations’ business objectives. We are committed to shaping the world-class enterprises and leaders. Of course, there are plenty of opportunities like this in China because our economy keeps growing so rapidly. This brings us many opportunities to help enterprises become world leading ones.
A couple of years ago, organization development and talent management were separate, taking a third of Hay Group China’s total revenue. Now, combining these two business units, it grows to three quarters of our revenue. This has been a great success for Hay Group in terms of business transformation. The driving force behind this is my philosophy on Chinese HRM practices. This also shows the business focus of our client organizations. I think you can call it an ongoing HRM trend in Chinese enterprises.
Boyi Wang: How do you see the differences of HRM practice between China and western countries? And how do you see HR professionals’ role in influencing decision makers?
Wayne Chen:
Although I spend most of my time in China, I want to point out that a major difference is in the degree of HR knowledge, skills and related competencies possessed by the HR professionals in the two parts of the world, maybe because of the differences in professional training and their exposures to the HR issues. For example, ten years ago when I was a graduate student in the U.S, I attended conferences on management, leadership, and strategic innovations and met with many HR practitioners from different companies. I found that regardless of their company affiliations or positions, their understanding of HR issues and their professional knowledge were very impressive. By talking to them, you would know the burning business problems and the role played by the HR functions in their organizations.
On the other hand, although China has made great improvement in both talent and knowledge development in the last ten years, we are still in short of HRM talents on a broad basis. This can be seen from the fact that most HR practitioners’ promotion in the organization appears to be on a fast track. For example, normally you would have to take a progressive process to become an HR Director in large companies. Because China lacks HRM talents, it is relatively easier and faster to be promoted to this position. Accordingly, those being promoted would encounter greater challenges as they are not quite ready or fully qualified. The situation in western countries would be different. Because there are many experienced people around you, who are both good at HRM and business operations. Also most companies formulate rigorous requirements for such promotions. It often takes a long time in a company to be promoted to an HR Director position. However, a challenge may also be an opportunity because it puts high pressures on you to quickly accumulate HR expertise and experiences under a very short learning curve. In the meantime, you must deal with the challenges from the business every day. The good thing is, you may improve yourself in the shortest possible period under these pressures. From a professional competency point of view, a high-level HR manager from Western countries is more competent than those at the same rank in China. So HR managers in China have to play a lot of catch-up.
The second issue is about HR service targets. HRM functions are all about working toward the overall business goals. There are many professional HR tools and methods that can be leveraged. For instance, with regard to interventions among one or two hundred people, we developed a tool called Focus Group Intervention and applied it to organization development. Some Chinese business leaders may not be familiar with tools like this. The HR manager needs to find some creative ways to introduce the tools to them and make sure they understand its value to the organization.
Back to the influence part, unlike their counterparts in the West, senior business leaders in China, while highly respected, are often inadequately equipped with professional competencies. To become influential HR managers or executives in the organization, HR people need to consider how to influence the senior leaders or C-level managers by “managing” and “educating” them on important issues in HR area, and show them the value of HRM activities and practices. This is to act like an HR consultant, an internal consultant.
Another example is succession planning. In the West, a manager promoted to a higher level position must experience this process prior to the promotion, going through development plan as high potential future leaders. So later he can become the successor of somebody at a higher position. This should be part of HRM functions. In many Chinese organizations, there is no such procedure for senior business leader. We have introduced it to some clients and it proved to be quite effective. As an HR executive, one may ask “how should we select high potential people for future development?” and “how should I influence senior managers and make it happen here?” This is one of many examples what China HRM practitioners may consider to extend their influences in organizations.
Boyi Wang: Based on your practice in HRM, what can you tell me about the trends in Chinese HRM practice, say, in the next ten years?
Wayne Chen:
I do think there are some important trends. The first is that developing people's capability will be intensified. A lot of investments will be spent on enhancing people's capability. This is related to our rapid development and changes in business. It is obvious that existing people capability lags behind. I just mentioned that people in the West develop themselves progressively in a mature market. They have accumulated plenty of experience in this area. But we have not. So in the next few years, you’ll see a lot of activities going on in training and development, especially on developing new leaders. The second trend is in conjunction with the globalization process. Talent strategies will not only be Chinese market focused, but to extend to a global perspective. This trend will become increasingly important. Right now, not only multinationals but also many Chinese enterprises are acquiring talents around the world. So, this trend is already under way. The next trend is about taking advantage of technology, such as eHR. More and more companies will apply HR e-Tools to support their practices. In my view, this trend is also about improving people capacity and organizational capability.
“Business is all about people, and people are the business. The two aspects are the same thing and can’t be separated. With this business philosophy, we must care about people’s careers and growth, care about people’s contributions, and about if people enjoy their work.”
Another possible direction for HR is to help employees transform themselves. With this in mind, we will pay more attention to facilitate rapid transformation. The ongoing strategic transformation of management approach, operating model, and organizational structure will be pushed further ahead. Once an employee’s position is required to be changed due to the above changes, his/her job function and roles may be altered. During this process, promotions and demotions may occur among employees. Given the Chinese face (mianzi) culture, HR professionals must develop appropriate strategies to facilitate individuals coping with such changes. This will also help organizations to prevent unnecessary employee turnover under the changes.
Boyi Wang: Indeed, I have experienced some of the aspects you mentioned here. My company has been experiencing a structural change. There was some resentment from affected employees. Their perceptions and motivations would be affected, and some people even consider it a painful process. So, it is important for HR professionals effectively facilitate this process and address these challenges.
Wayne Chen:
Yes, under turbulent changes, a lot of people feel unhappy in organizations. The above trend I mentioned, to a certain extent, explained this. In an HR role, we shall help employees to improve their feeling of happiness and job satisfaction. In the last few decades, our overall income saw a significant increase. The compensation gap between China and surrounding countries for professionals and management staff has been narrowed. Compared with other booming countries in Asia, our income for management talents could be even higher. In China, salaries for middle and top level management is equivalent to those in Hong Kong, and even higher than several places in South Korea. So we should keep the following questions in mind: Can you make people happier with higher income? What else can we do to improve employees’ satisfaction and their capacity? I think this is very important to both individuals and organizations.
Boyi Wang: I understand that HRM is a burning hot field in China right now, and many young people are eager to jump into the field. For new-comers joining the HRM field, what suggestions or advice do you have for them? And what will be some of the challenges ahead of them?
Wayne Chen:
Through my years of observations, I found that many HRM practitioners in China do not have business insights. This may be a major shortcoming. The reason is that the fundamental purpose of HRM is to promote and support the implementation of business strategies. I think the top priority for them is to spend time and energy to understand the business of their organizations. They need to understand how the profit is being generated, how marketing and sales operate in certain ways to attract customers, and what does it take to build a brand name in their companies? Knowing the answers to those questions, an HR professional can find ways to add value to the business strategy. They need to consider issues from business perspective, not purely from HR standpoint. We have been talking about this for years. However, it is easy to say, but difficult to practice. The reason is that our overall perception on HR is still of a supporting function instead of a business partner. I think it is a big challenge and a barrier to overcome.
My second suggestion is related to the first. We have to have a thorough understanding of the customers in the industry we practice. The more you know about your customers, the more likely it will enable you to help your organization to identify and solve potential problems. I think this is equally important for HR professionals. Third, we have to do a good job in establishing relationships with stakeholders in the company, especially the leaders, the top management team, and business partners. It takes time and effort to build such relationships. We need to think about in what areas we can add value to them. What keeps them awake in the middle of night? As the old Chinese saying goes, “one without providence will have immediate worries”. We need to constantly reflect on this. So, from relationship building to understanding business problems, you are one step closer to making a contribution to the business. As a result, you may be able to establish a cooperative relationship with the decision makers. Eventually, you might become their trusted advisor, consultant, and assistant.
Closely related to the above is that HRM practitioners should consider putting themselves in the shoes of those that are two or three levels above. You need to think about the business problems of your boss's boss, or even your boss’s boss’s boss as if they were yours. This way, your ideas and recommendations will make foresights and be valued by the business leaders. These are based on my observations in the business world.
Boyi Wang: As we know that HRM is not only the function of HR department, but also a responsibility of business managers. As an HR executive, what suggestions can you offer to business managers? What should they do to play a role as people managers?
Wayne Chen:
It is very important to emphasize a critical issue here. Business is all about people, and people are the business. The two aspects are the same thing and can’t be separated. With this business philosophy, we must care about people’s careers and growth, care about people’s contributions, and about if people enjoy their work. These ought to be the concerns of business managers. I have created a “Triangle” model to help business managers. My model consists of three components: growth, contribution and enjoyment. No matter which company you work for, we need to ask the following questions: Can you develop yourself and make progress at work? Can you make continuous contributions? If one cannot grow in the current position, the person would feel uncomfortable and may feel worthless. As a result, the person would not enjoy the work, vice versa. Therefore, great leaders shall always consider how to create an environment to enable employees to develop their careers, to make contributions, and to enjoy what they do every day. Of course, it is not easy to accomplish. But I think business leaders shall take this a high priority.
Boyi Wang: As a consulting company focusing on strategy implementation, can you tell me one unique advantage of Hay Group? Given the trends you described earlier, where would you take Hay Group China in the future?
Wayne Chen:
We do have many advantages. One of our key advantages is our ability to work with our clients through process consultation approach. We do not create only papers for our clients. We work with them to make change happen and execute their strategies. We focus on the real impact on them.
As for our future, in my opinion, we will focus on the following: First, we will support our clients succeed globally. We will help multinational companies make greater success in China. To the same degree, we will also assist Chinese enterprises accomplish more in the global market. Both are important and integral part of globalization. This has been our important starting points and an important direction for us to continue pursue.
Secondly, we will continue to develop world class leaders to meet the demands of both multinational and local enterprises. Thirdly, we will dedicate ourselves to a two-tiered development strategy. On the first tier, we work to influence the C-suite executives to implement their change initiatives. This is our priority. On the second tier, we focus on supporting our clients with efficient and cost-effective tools and methodologies. It is part of the effort that we are making in terms of HRM technology. I feel that we have the obligation to help our clients to enhance their talent pipeline both from the level of strategy and the operations.
August 2011.
This is a shortened version of “Chinese HRM in Action: An Interview with Wayne Chen of Hay Group China”, which originally appeared in Journal of Chinese Human Resource Management, Volume 2 Issue 1, 2011.
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