Transformation - not without HR!

The transformation of organisations is one of the big issues that will outlast the pandemic. What does this mean for HR?

Organisations

In organisations, people work together and resources are used to achieve strategic goals. As social contexts in which people work (together), organisations are more than rule-based machines that translate strategies into profit and growth. Rather, strategy- and rule-driven as well as people- and behaviour-driven sides must work closely together in them - like our left and right brain hemispheres.

Of course, the translation of strategy into the appropriate task layouts, processes and rules/governance of an organisation must be successful. Where do we need customer and market proximity, where are synergies and functional excellence important? Which processes and systems support our value creation in the best possible way?

At the same time, human interactions and skills, leadership and values also shape an organisation. These explicit or implicit influences determine how well and productively employees can utilise their skills together.

Organisations can only develop their full potential in the complex functional interplay of both dimensions. Without the other sphere, there is a risk of a technocratic or therapeutic dead end. However, organisations can be successful with different emphases. The right balance can only be designed to a certain extent; for the most part, it must be experienced, learnt and constantly readjusted.

Organisations in transformation

When organisations are under great pressure to adapt and at the same time face a high degree of uncertainty, they are faced with particularly demanding challenges. Under these conditions, many companies are currently working on transforming their organisation, i.e. changing it to make it more future-proof. This has a number of consequences:

  • The traditional (already sufficiently demanding) translation and implementation of strategies in organisations no longer works. Today, strategic objectives are blurred at best. This makes orientation towards a common identity all the more important. A clear purpose can provide this.
  • Under such conditions, transformations have a lot to do with visual flight and experimentation. How can managers and employees accept this fundamental uncertainty and perhaps even utilise it as an opportunity to shape the future? How can they themselves practically drive change in their area of responsibility and make informed decisions? Less certainty in strategic, rule-based terms means that people- and behaviour-driven aspects must provide more certainty, but these must first be learned and practised.
  • A new organisation is gradually emerging. Managers and employees are learning to meet new requirements. At the same time, more people are needed here, less there and perhaps even different people elsewhere. The tension between short-term management of the transformation and longer-term processes is one of the tests for many organisations.

Transformation of HR

This gives HR a completely new central role. The focus is no longer just on efficiency and professional HR work, but on making a strategic contribution to the transformation of the organisation. This starts right at the top. If it is true that structural, rule-driven and people-behaviour-driven aspects of a transformation are intertwined, then this requires a new level of team play on boards and in management, namely CEOs who have an equal focus on the personnel side of the transformation and CHROs who are confidently involved in the business. This continues seamlessly at the other management levels and requires a new mindset from everyone involved.

Mindset alone is not enough, however. It must be underpinned by significant changes to the HR function - relevant questions include

  • What role do we need to play in the future to best support the transformation of our organisation?
  • What is our strategic perspective? What HR contributions will be most important in the future?
  • What do we need to change in our organisation and processes to achieve this? What can we radically simplify or leave out?
  • How can we quickly understand what the organisation needs in its transformation? How can we test new approaches in a targeted manner?
  • How do we need to manage our own HR organisation, how do we get involved in managing the organisation as a whole?
  • What do we need to learn - starting with the CHRO and the business partners - in order to act as equals?

There are probably not always satisfactory answers to all these questions. Nevertheless, we are convinced that organisational transformation can only succeed if the HR function is also radically aligned with this goal. HR transformation and organisational transformation must go hand in hand. This will be the big issue for HR in the coming years. It will require an enormous effort, but in many cases it will also create a new and attractive role for HR. We see again and again what can come out of this endeavour.

This article was also published in HRM-Magazin, Bundesverband der Personalmanager.

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Dr. Axel Sauder
Dr. Axel Sauder
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