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What’s the main difference between traditional HR and Product-Led PX?

This questions comes up a lot in my conversations with HR Leaders in businesses of all sizes and scales, and with founders often, too.

The answer has a lot to do with context and the HR naming convention. The HR naming convention is also a conversation that has rumbled on for decades, and will no doubt continue to rumble on for decades to come...

Is it Human Resources?
Is it Human Capital? (my least favourite 🤢)
Is it People?
Is it People Experience?
Is it People Ops?
Once upon a time it was Personnel...

Now we have People Product. I will definitely hold my hands up - proudly - as being guilty for being partially responsible for this latest addition.

You could say "that which we call a rose" 🌹 - which is partially true, but I do think the semantics matter. “HR” carries with it a set of negative connotations (and expectations) which are hard to shake. So, I do think the naming convention of your people function will in some way shape the type of work you deliver and the level of impact you have - but the bigger picture, sentiment remains; Naming conventions are secondary to impact delivered.

As it relates to context, what I am talking about mostly is:

• Organisation size (head count)
• Organisation stage (start-up / scale-up, SMB, Enterprise etc)
• HR / People positioning (strategic vs support)
• HR / People team size, maturity, and make up (siloed specialists vs Lean generalists)
• HR / People Leader mindset & approach (procurement vs product)

These factor will largely determine the approach of the HR / People team. Naturally, I have a preference for product-led at all sizes and stages, but there are different People product operating models that will suit different stages of complexity.

The 3 People Product Operating Models

I have seen 3 core approaches to Product-Led People practices emerge over the last couple of years, each with merit relating to size, culture, context and complexity. In truth, there are likely many more models that could - and do work - but these are the 3 which I see and have supported teams implement most often:

1️⃣Productization of HR as a Service

This approach is most common in enterprise and larger headcount orgs with a much deeper history of embedded Ulrich / Traditional HR practices (think siloed specialisms, centres of excellence, cost-centre model). What this looks like in practice is applying product principles to the delivery “better HR services”.

Whilst I think this is a step in the right direction, personally I think it misses the the true impact (and purpose) of applying a product mindset to the People function - which is to identify and solve real employee (and business) problems, and drive business growth. The Productization of HR as a Service model runs the risk of continuing to deliver top-down waterfall "HR" initiatives that don't really drive value, but are delivered wrapped in product language.

✅Pros: More user-centricity, more emphasis on personalisation / human-centered design, some agile delivery, emergence of co-creation.

❌ Cons: HR gets better at delivering low value initiatives, “performative product / agile theatre” - agile rituals applied to waterfall delivery, still very siloed with low connection to true strategic business impact, HR still seen as a cost-centre.

2️⃣Projects / Programmes as a Products

I have seen this approach as "first step" in all org stages and sizes - I actually think this is a very good first step, I would choose this model over Productization of HR as a Service model every time.

In some orgs the projects as products approach forms part of the core operational approach of the HR function (i.e all People / HR team members are working as part of small teams - or squads to use product/agile language- to deliver individual "products" addressing employee problems and business bottlenecks).

In other orgs, a separate “People Product” team exists outside of (but parallel to) the core HR function. Their focus is specifically on designing, shipping and developing “people products” - individual projects and programmes - they don't carry a HR workload, and teams are comprised of (or work split into) product owners, designers, and engineers/builders - in lean teams, one individual may simultaneously be a product owner, a designer, and engineer/builder across multiple "products".

This is the model deployed by TomTom if you want a concrete example of how this works in practice and at scale, speak to Aga van Baren (Head of People Products) or Katja Vincetic, who was a People Product Manager in the TomTom team (now consulting).

Boiling it down, projects as products is essentially individual initiatives being treated as individual products (i.e an L&D Programme may be considered a product for a specific end user group).

✅Pros: Grounded in discovery, much more emphasis on user-centricity, designed and developed in co-creation with end users, value creating and impact aligned to specific outcomes, successful products can be adapted and scaled.

❌Cons: “Products” are delivered in silo (narrow view), run the risk of subjective prioritisation and resource allocation, possible to create a portfolio of good, but disconnected products.

3️⃣People Experience as a Product (Work as a Product)

I would say this approach is most common in start-ups and scale-ups where there is less legacy HR infrastructure and mindset to overcome. Teams and resources are lean. The business is in growth mode, so policies and processes need to be light and flexible. The business imperative is speed of execution and value creation - the People team needs to match and enable this speed.

What this looks like in practice; The experience or work / work itself is the product - a subscription product, to be exact. Made popular by Jessica Zwaan, Dart Lindsley (and I would like to say, myself if I could be so bold).

The PX as a Product approach is what I am most in favour of as it is considers the end to end-to-end employee customer lifecycle in totality, but it is the most tricky to execute if you aren't starting from zero (i.e start-up). If you are embarking on a product transformation of HR, I would suggest starting with model 1 or 2 - with PX as a Product the ultimate long term vision to realise.

The People Team is the bridge between people, processes and technology - PX is the multi-sided product which connects these things and drives business health, growth, and ultimately, the delivery of the external customer product (it's people, processes, and tech which design, build, and service any product offering).

The People Team's role is to manage, design and develop the the PX Product in totality in alignment with core business priorities, objectives, and the critical employee enablement needs.

✅Pros: Fully connected systems view of how the PX Product enables people and business growth, leaner teams with more generalist skillsets, delivers more value more quickly, truly strategic growth driver.

❌Cons: Difficult to execute in totality, requires the biggest shift of hearts and minds from the business AND the People team, BAU “HR stuff” can swallow team capacity, requires a very different profile of "People Person" to execute.

All three of these approaches have their merits, and all three are steps towards the ultimate end game which is a shift away from HR as a support function and a step towards PX as a growth function. PX as a strategic function which solves high impact employee (and org problems) and drives people and business growth.

Let me know what stage you are at - or which stage appeals most - I would love to get a temperature check on where you are at with this.

OK, that’s a wrap for this week.

Grab your coffee and open up your inbox same time next week for more insights, tips, and resource flags on how to smash HR silos, add strategic value and turn your People function into a growth driver 🚀

With love,

Luke ✌🏻

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