Businesses are transforming in every part of the economy – to survive, remain relevant, enter new markets or scale their current organisations.
Businesses are transforming in every part of the economy – to survive, remain relevant, enter new markets or scale their current organisations. But the painful reality is that most of these transformations fail: research shows 70% of complex, large-scale programs for change don’t achieve their stated goals.
There are many stumbling blocks, but common pitfalls include poor employee engagement, inadequate leadership support, failure to collaborate across functions and lack of accountability.
Transformation is a marathon, not a sprint: sustaining it requires a major reset among staff, in terms of both mindset and behaviour. That’s something few business leaders know how to achieve – but it’s an area where HR input can make real difference, helping organisations sidestep those pitfalls and other workforce issues.
It’s important to bear in mind that HR has a double challenge in any transformation initiative Not only is it supporting the actual transformation process and its consequences, but it must ensure it is fit for purpose and strongly placed to respond to leadership and workforce needs as the new ways of working become a reality.
So when your organisation embarks on a transformation journey – whether it’s as targeted as a supply chain restructuring, or a comprehensive rewrite of the entire business strategy –How can HR influence the transformation in a positive manner and create an engaged and energized workforce that looks forward to the transformation?
It’s all too easy for employees to roll their eyes at the announcement of yet another corporate overhaul, assume it’s the latest leadership fad, and feel change is being “done” to them.
Conversely, when people understand what’s being asked of them, and the transformation required, they are much more likely to buy into it. If they are convinced about the merits of the transformation, for the business and for them personally, they have a reason to do their best and drive their activities to support those goals.
There’s certainly good evidence to back the idea that organisations that put the workforce at the heart of the transformational journey reap very real rewards. A recent study by IBM and Workmans found those businesses scoring in the top 25% for employee experience reported double the return on sales of rival organisations in the bottom 25% (in other words they generated profits twice as efficiently as lagging competitors).
At Mercer, the focus on employees is front and centre in our transformation work with our clients.
We’ve said it before and we’ll say it again: transformation demands time, patience and tenacity, and it can only work if the goals and upside of the transformation are to the fore of employees’ minds every day. That, of course, makes it all the more crucial that they are on board with the reasons why they’re being asked to do things differently.
As an example of the kind of long-haul mindset that business transformation can involve, look at Tesla. It set out to be the biggest electric car company in the world, and recognised that to achieve its goal it needed to control the battery supply. To that end, it focused on its supply chain strategy, investing massively there. That involved effort and determination: there were no short cuts.
But technical considerations are only one side of the equation - and indeed in our experience the technical requirements are typically the aspects of transformation that businesses are on top of. Often, we see much greater risks to an overall strategy in the mismatch between skills needed and staff available. A transformation project is multi- dimensional, and needs to focus on really understanding - from a data perspective - what skills are required to drive the transformation, if they exist in the organisation, and how the gap can be closed. Investing in the new process or automation is not sufficient - there needs to be an equal investment in the skills arena.
Overcoming those hurdles involves taking a long view, serious investment and striking a balance between present and future requirements. And again, short cuts are not an option.
If a business is to drive a successful transformation, it needs to ensure its people are fully on board for the journey, and that their experience is a great one. And that’s not rocket science. It’s about ensuring a sense of belonging, in multiple respects.
It means, for example, making sure employees feel included and fairly treated in terms of Diversity, Equity and Inclusion. It means embedding a corporate culture in which they feel valued, heard, and able to co-create solutions and be involved in decision-making. It means providing them with the opportunities to build on existing skills and learn new ones. It means a reward strategy that is fair and equitable, and continues to be so as they upskill in the future. The list goes on.
The HR delivery model also needs to transform. Employees expect a “customer” level experience in their HR interactions. The HR function needs to increase its customer centricity and deliver exceptional experiences to both leadership and employees. This is even more critical during a transformation phase where anxieties and mistrust can be at an all-time high.
Social listening - following social media trends to get broader insights, as well as internal chat forums to keep a finger on the corporate pulse – these are some key ways of maintaining the agility and responsiveness needed in a constantly evolving environment.
There’s no such thing as a perfect game plan for business transformation. It’s bound to involve uncertainty, multiple iterations, redesign and rethinks – but a sense of purpose, a long-term approach and mindset, and the acceptance of change across all business areas and processes can accomplish this.
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