HR: An engine for organizational transformation

Indeed, there is a growing recognition of the potential opportunity this crisis presents. As Heather McGowan put it for Forbes, coronavirus “might be the great catalyst for business transformation.”

Any organizational transformation demands a thoughtfully planned and executed change management strategy, and HR is well positioned to serve as an integral link across the organization, mapping employee sentiment and working side-by-side with departments to achieve necessary change.

Moreover, it is clear that organizational transformations in the post-coronavirus era cannot be approached as one-and-done events. To maximize impact, a transformation should fundamentally equip organizations for ongoing evolution in response to accelerating rates of change.

Again, HR is the logical function through which to make this vision a reality: as working models become more agile and fluid, and digital disruptions necessitate further capability growth, HR is the department with the in-depth knowledge required to manage shifting talent needs and identify the dynamic skill sets that will power the future organization and ensure its adaptability.

Here we would like to propose a vision of how HR would operate if it embraced its full potential as a transformation agent. We envision three dynamics, with HR leading “big-bang” transformation programs; enabling continuous day-to-day change; and iterating on new ideas through innovation hubs.

Prediction #1: HR will lead “big-bang” transformations
Evidence suggests that the human resources function is currently underused in its capacity as a transformation leader, despite senior executives’ oft-repeated eagerness to see their HR teams take on this role. Only 15 percent of chief human resources officers (CHROs) say they advise their CEOs on change management issues. However, given its connectivity throughout the business, HR is uniquely suited to both identify broader strategic opportunities for transformation and to lead the way in execution.

Take a scenario in which two large companies merge, and the newly combined organization is forced to rethink its operating model from top to bottom. A fully strategic HR organization can apply its cross-functional insights to guide leaders to smart strategic choices on everything from organizational design to resource allocation.

In addition, HR’s relationships across the enterprise can facilitate the implementation of change, as well as the communication of that change across the workforce. Finally, it can help an organization develop the skill sets necessary to monitor and respond to change over time. In the post-coronavirus world, the need for such agile responses to changing organizational needs will be more crucial than ever.

Prediction #2: HR will enable continuous day-to-day change
The term “transformation” need not only refer to a single large event; it can also capture smaller, more gradual changes to organizational processes and ways of working. Future workforce trends suggest this type of organizational change will only grow in importance.

Technology is shrinking the lifespan of the average skill set, and the skills an employee learns today may be obsolete within just four years. In order to keep up, organizations will have to build continuous reinvention and employee upskilling into their DNA.

In its role as a culture and productivity driver, HR is positioned to enable this continuous change by identifying and implementing new tools and ways of working that encourage collaboration. HR also has the expertise to adapt training methods to the needs of an agile organization.

One example is the emergence of bite-sized “microlearning” modules to help employees swiftly build and assess new skills. Such lessons are by no means limited to technical training; when administered correctly, they may even apply to the instruction of high-value “soft skills” such as personnel management.

The HR team at one leading beauty company has pursued precisely this type of continuous change, setting up a series of programs designed to expand employee capabilities beyond their current roles.

These include reverse mentoring (in which senior leaders learn from more junior employees), cross-functional rotation programs for recent graduates, and HR “pods” that drive incremental change throughout the organization. The goal is to break down barriers that keep employees boxed into a certain role or mindset, and to embed ongoing improvement into the culture of the company.

Prediction #3: HR will foster innovation hubs
As HR looks to encourage and drive proactive improvement, innovation hubs will play a key role in fostering change and experimentation. HR innovation hubs will bring together data science, psychology, and broader cross-functional expertise.

Employee hiring and turnover is an area where data-driven analytics can benefit the organization. Hiring and training employees is costly, so minimizing turnover is crucial. If HR teams are not continuously innovating and proactively adapting, they miss opportunities to identify and act upon the potential departure of an employee.

Data-driven analytics can range from something as simple as surveys of employee sentiment to highly complex predictive analytics that identify not only which employees are most likely to depart, but the specific factors that may be pushing them out the door.

Google’s People Innovation Lab (PiLab) is a leader in using data analytics to improve HR outcomes. It surveys Google employees and combines the results with other HR data to develop a playbook on what managerial behaviors drive better team performance and retention. In addition, Google correlates candidate-hiring profiles and job descriptions with eventual employee performance, providing the HR team with data-driven predictive insights to assess candidates, guide the formation of employee teams, and minimize turnover.

What HR organizations can do now
An HR department serving in the capacity described above, as a connector and an engine for transformative growth, would cement its status as a valuable strategic partner to the C-suite. As personnel executives look to capitalize on this potential, they should bear in mind some basic questions and considerations.

First, is there a clear overall strategy for the organization, and for HR specifically? Such a vision is essential to the development of performance standards and benchmarks. Additionally, a well-defined strategy is necessary for guiding investments in resource deployment, technology upgrades, and staffing.

Once an HR team has the right strategy, and understands the initial changes needed to enable broader transformation, it must also consider potential roadblocks within the corporation’s broader leadership team, including the offices of the CEO, COO, and other top managers.

These influential leaders must be engaged early to gather support and enable HR to move beyond traditional transactional efforts. Kearney can help you to objectively ask—and answer—the right questions, assess your team’s readiness to transform, and build the road map needed to reach the appropriate future state for your organization.


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