Career advice, insights & tips for HR professionals
What is HR’s role in successful business transformation? 07/09/2012
In the first of a three-part series, Andy Montgomery, associate partner in the HR practice at Eton Bridge Partners, looks at the critical elements for a successful business transformation programme and the involvement of HR.
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- Why change is critical for any business
- The home truths about transformation
- How HR can help eliminate the risk of failure
- Bridging the skills gap
Why change is critical for any business
As businesses look to achieve greater efficiencies in a weakened economy, a well-implemented business transformation programme can make the difference between success and failure. Where do you start and how do you identify the different skills needed to deliver a true transformation of a business?
While ‘transformation’ is a fairly recent buzzword in business, the broader concept of change within a corporate environment isn’t. As Darwin said: “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” This may have been referring to evolution, but the same applies in business.
In challenging economic times, many organisations are undertaking transformation programmes to radically change the way they operate. This could be about moving into new markets to arrest declining revenues, or reinventing the systems and processes that stand behind the business in order to reduce costs and increase profit margins.
Most commonly however, we’re seeing businesses turning their attention to back office infrastructures and the support this provides for business operations.
The home truths about transformation
Are we getting better at change and transformation? The short answer is no. In 1995, research by Cotter suggested that 70% of attempted transformations fail. This was followed by McKinsey, who suggested that in 2008, things had not moved on and it was still just over two thirds that were falling by the wayside. Despite rhetoric about adapting to their economic circumstances, organisations still frequently leave change too late and don’t take it seriously enough from the start, leaving their options distinctly limited.
How HR can help eliminate the risk of failure
Many large-scale transformation programmes will be driven by the desire for streamlined processes and creating efficiencies within a business. While the ‘greater vision’ may have already been created, HR’s role in ensuring this is communicated to the business is crucial.
Put simply, transformation will not work without the engagement of those employed within the business. At a transactional level, HR’s technical input into the organisational design and identification of talent for any proposed transformation is without question, but one of the key areas for HR to add value is through demonstrating clear leadership and direction, whether they are actually leading the project or not. Convincing employees that the current state is actually more dangerous than the unknown can be challenging, but it is imperative.
Bridging the skills gap
Although it can be taboo to admit, there are many HR professionals who do not have the necessary skills to lead change. Trying to maintain involvement in a large-scale transformation in conjunction with completing ‘the day job’ often proves the major obstacle. For many interim consultants who have delivered large-scale change projects time and time again, it’s only once a project has either failed or has got into difficulty that they get the call. But at what cost to a business? For many businesses, change is not a state of mind, but a necessity. The failure of a change process is often a high and unnecessary cost and considerably more than engaging someone with the right skills in transformation in the first place.
The recommendation would be to not underestimate the task or the value HR can add during the process. The people element of any transformation programme is a critical part of getting it right. Seek out personal recommendations. Talk to industry experts and professionals who have been through similar projects, and find a recruitment partner that really understands transformation.
External transformation specialists can bring clarity and an impartial viewpoint to a transformation process, which can be a real bonus. But clear leadership and workforce engagement remains essential to the project and those affected. While it can be a challenging time for those leading the change, you can be sure that for those involved, the fear of the unknown will be far greater.
Andy Montgomery, associate partner, Eton Bridge Partners
Andy Montgomery is associate partner in the HR practice at Eton Bridge Partners.