I’ve been looking forward to this conversation the most since arriving at UNLEASH. Katarina Berg is the CHRO for Spotify, arguably one of the most exciting jobs available in the people space. I arranged to join her on a Hangout to discuss the changing nature of the CHRO role. To talk about what are the drivers, and what does it mean from a technology perspective?
As Katarina says “I think it’s an evolution that you can see. In all kind of businesses, whatever you do, it doesn’t matter what industry, right? You can describe all businesses with the three Ps. It’s the people, it’s the product, and it’s the profit. We can’t do anything with the profit or the product if you don’t have an a-grade team or the greatest team. So, it comes down to people.”
At Spotify, that means Katarina’s role oversees HR, Global Workplace Services (GWS), Strategy and Operations, and Brand. It’s undoubtedly a forward-thinking mix for the CHRO title. But one that makes sense when layered against another piece of contextual perspective from Katarina “It goes back to the Five C’s. You have to be clear; you have to be consistent; you have to be compelling; you have to be courageous. And you have to be very close to the business.
She goes on to explain how the approach is connected to the vision of one of the founders. “I think Daniel has a very clear view of what areas are actually connected and everything that has to do with being in a talent business, which we are. That means having the really, really smart and very good and very highly motivated people, being a clear responsibility for someone”. She goes on “Daniel is very visionary in so many ways. So, I think it is very much a big part of his thinking of what he wants this function to do. Also, a couple of important areas are very much aligned and in sync and should be and needs to be. But per se since it’s the same person and it ladders up to it’s easier, faster and more helpful for the business as a whole.
The vision is even more evident when you find out that each month Spotify receives over 35,000 applications for some 140 positions. Then the progressive, holistic view becomes yet more critical. On reflection afterwards, I realized some 33,500 people could be left disappointed by the brand experience involved in the recruitment process. For most companies, it wouldn’t matter as their recruitment numbers would be so small in comparison. But for Spotify, it could have a substantial impact on their brand and their ability to recruit talent. It also perhaps explains why so much of the communication of Spotify internal values and developments happen on external platforms.
Back to the hangout though, and Katarina sees a clear evolution in the responsibilities
“HR has become much more strategic over the years, and more so to come. I think if you go back maybe 10, or even 20 years, depending on where in the world, it was a support function, full stop. Right? It was a lot about labor law, which is complicated and still is a big part of the role today. But it was also more about like, ‘How can we make sure that we support both managers and people?
Then you have the next phase where it was more about, ‘Okay, efficiency. How can we drive efficiency, and how can we do things smarter without, not necessarily breaking, haunting or discouraging our people?
Then you do a big job into the next phase that had to do with a lot of culture, culture, culture, people, people, people. Because talent, we draw into the land of talent scarcity and are trying to figure out what price and where. Also, why we have to have the challenge of talent density? Much focus is on, how do you find and attract and develop and retain talent.
I would say the fourth phase was a lot about being overly focused on people, not in a one hundred per cent authentic way and not always being relevant. That brings us up to where we are now. So, when the people grow, the company grows, when the people are doing well, the company’s doing well.
Today HR is all about building up the business. It’s not supporting the business; it’s not pushing back on the business; it’s not policing the business; it’s actually about building up the business.
And here a different type of HR work is needed, and it’s much more strategic, and it’s much closer to the CEO than ever.”
For me, it’s clear the move to this more strategic mindset for HR means the profession needs to include people more technologically minded. When I asked Katarina if she sees evidence of this kind of person in the sector, she replies “Do I see a lot of the older practitioners keeping up with the pace of change and understanding this? Yes. I actually think though that the younger generations are better prepared. Not just because we are going into more of digital and more of HR tech. But because they have decided that they want to work with us. And they have the behavioural science side, but they also have the business knowledge. And that’s been shaped by their curriculum at University. “
We turn to the topic of what companies undergoing a digital transformation or embarking on that path can do to attract and retain the right people?
Katarina says “At Spotify, where I am today, we’ve never been Analog, right? So we didn’t have to do the digital transformation and get more digitized.
However, I’ve also been to organizations like Volvo or Preem, which is an oil business. Or Swedbank, which is Sweden’s largest bank, but it’s not just Swedish. My experience also includes the Telco industry and commercial TV, and all of them have done this kind of movement into surviving in the next paradigm. Right? Being digital. So I think in a couple of ways it’s the same struggle or the same challenge, but I love to see it as an opportunity, or possibility.
Also, it’s this; you have to be able to explain, in a very relevant and authentic way, what you are about. No matter if it’s high tech or you’re going to do the journey, it’s all about purpose. She goes on “I think that is the key, and you will attract different types of people through employer branding. If you do that really well, in a very smart, and very consistent, and very clear, and courageous way, you also have to tell the things that you have as challenges.
One of the most interesting phases of our conversation is about the role of technology in HR. For Katarina, it’s clear that most of what people are calling HR Tech is HR Systems.
To her, HR Tech is something we’ve not seen before. She says, “HR tech is when we go one, two steps to the side and look into, ‘Okay what can AI do for us that we have to do that was repetitive, time-consuming, template consuming, admin consuming? We can have people that have the training to do other things that are helping the business, the individuals and the organization to grow. So where you need the human touch, you need the human brain, and you need everything that AI can’t do today or automatization. It will be things that will reduce time, because there is a need for speed, right? Also, that power of focus. So we haven’t seen it all. A lot of what exists now is not really clever, yet. However, it will become clever. Have I seen anything that is super, super helpful yet? No."
"Have I seen many embryos that I think it’s going to be good? Yes. So I think the most important thing is not to be change and tech-averse. You have to have an open mind about it and ask the right questions. So you don’t spend too much time until the tech industry within HR, or people, come with things that make sense. What we see when we’ve pressure tested new technology, is not super impressive, yet. However, in my world, if I look to other parts of our business, AI is not coming, it’s already here, and we use it a lot. Have I seen it really within HR tech? No. Have I seen baby-steps? For sure."
Talk then turns to the growing trend of blended systems. Katarina can see how it’s necessary if you want to be closer to a company’s way of working. “If you buy something off the shelf, you have to tweak it, and you have to break it up. And then you have to also plug it into the systems that you already have, or have built.
By building something from within. No matter what HR systems, for instance, you are working with your people or your development squads internally. They know what they need to adjust to, right? So, it’s not going to be built and then just plugged in in isolation. It’s going to have to be developed as a plugin, or API, kind of function. "
Katarina Berg will be speaking at UNLEASH World Paris on Tuesday 22 October as part of a panel discussing the evolving role of the CHRO.