Living the Change and Leading the Change in HR

The three-dimensional approach to HR Transformation outlined using the Direction, Commitment, Capability model offers a proven, strategic approach for navigating change.

It’s no secret there has been a major shift in Human Resources in the last decade. HR leaders are grappling with deep cultural, functional, and operational changes – commonly referred to as "HR transformation." As transactional HR operations are made more efficient through process streamlining, technology, and outsourcing, HR is linking itself to corporate strategy, and discovering new ways to create business value. The ultimate aim is a Human Resources organization that is no longer viewed as a cost center, but as a strategic contributor to solving the company’s most pressing challenges.

To get some first-hand experiences from leaders within HR organizations experiencing such change, we checked in with Lynn Barsnick, formerly of FAO Schwarz and former Chief People Officer for Interaction Associates, Janet Hart, Vice President, Human Resources at Boston Scientific, and Ellen McCarthy Vice President, Human Resources, at Fidelity Investments. In this article, they recommend a number of action steps to living and leading change.

There are several tracks to the HR Transformation change management journey, and this is where it gets tricky for leaders. An HR change leader must:
• manage the uncertainty and anxiety that change generates within the HR function,
• provide current levels of service to clients,
• prepare clients for future changes in HR services, and
• identify skill gaps and develop capability within the HR organization itself to ensure success in its new role.

The question is: How to deal with the complexity these important changes present – and move forward strategically? The Interaction Associates model, Direction, Commitment, Capability [4]offers a strategic framework for guiding change on the scale discussed here.

Set Direction

A key part of any leader's role is to provide direction and vision for an organization. So what is unique about the challenges in HR and what can a leader do? In Lynn Barsnick's experience, one of the biggest barriers to change is HR's perception of itself and how it adds value to the business. This generates tension in the HR team: can we embrace the uncertainty of the future or do we continue "business as usual"?

HR leaders who are effective change motivators create a compelling case for change. Data helps to tell the story. External data, including benchmarking data and competitor behavior, combined with internal data on cost pressures or new business opportunities provide the foundation for change. It is useful to acknowledge how HR added value in the past and how, as a result of new external and internal requirements, HR can add value in new ways. When an HR leader can show that his or her peers on the business leadership team support HR’s new direction, it is easier for the HR function to get on board.

Critical action steps for setting direction:

1. Ensure that HR’s change effort is fully aligned with the direction of the business and business leadership team.

2. Get the HR leadership team members singing from the same songbook – each in his or her own key. At Boston Scientific, each member created and practiced a brief, compelling "pitch" about the new HR vision. The statements all laid out the same business reasons for the change and anticipated benefits. But, by putting the ideas into their own words and relating them to their own part of the company, the HR leaders had a personal starting point for engaging in further dialog about the new direction.

3. Enlist the CEO. Lynn Barsnick invited the CEO to talk directly to the HR team about why the business needed the HR function to change and the potential new value that HR could provide.

Foster Commitment

After a clear direction for HR's change has been established, the next step is building commitment to the change. This means commitment by the senior HR team, by the HR function, and by HR's line clients.

To start, members of the senior HR team must grapple with the personal change process. Do I agree with this change? How do I give voice to my own concerns, and what will enable me to support it with my direct reports and with my clients?

Creating a safe environment where these issues can be surfaced and addressed is a powerful tool for building internal commitment to significant change. The cost of not doing this is too high: HR can become defensive and stuck. It will lack responsiveness and creativity to face the challenges. Avoiding this step gets in the way of progress!

Critical action steps for fostering commitment:

1. Make certain the Senior HR Leader is pro-active, brings up the “elephant in the room,” and demonstrates a willingness to listen without judgment to staff concerns.

2. Listen to the concerns of business line clients. These may include: how will my level of service change, will the new HR really cost less? How much will this change disrupt current ways of working?

3. Use regular meetings with clients to solicit input on the change plan. Then bring in new data to show that action has been taken on feedback. Demonstrate the link between feedback and changes to the original plan.

4. Continually update the case for change.

5. Mid-cycle in the change process, check your progress and prepare for any course corrections. Provide possible options and costs associated with them; create mechanisms so that key stakeholders have input into decision-making.

6. Be flexible and focused. Janet Hart notes that to gain client acceptance, successful HR teams walk a delicate line between being proponents of the change, demonstrating commitment to HR and not losing sight of the realities of the business.

Build Capability

The third dimension of a successful HR transformation is a focus on capability. What capabilities are needed in the change process itself, and what capabilities will the new organization require?

Chief among the capabilities of the change process are the ability to "listen as an ally" and to reconcile differences.

HR must also identify the roles and skills needed in the new world and assess current capability: what is staff good at/not good at, and where are skills complementary? HR leadership must also be prepared to acknowledge that the new organization won’t have all the needed skills in place right away. There are implications to be explored: is it OK if we have flat spots? Will we invest in development, or move or replace people?

Critical action steps for building capability:

1. Address the anxiety that potential changes in jobs and skills generate. People often don’t know a lot about this and are afraid to admit it.

2. Create a plan for the function, with a clear time line about when decisions will be made and how they will be communicated.

3. Spend time individually on people’s personal issues; don’t hide the fact that jobs are at risk. People know it anyway.

4. Establish support structures and put training in place to build needed capabilities. Fidelity developed HR's organizational consulting and leadership capability through comprehensive training programs. It set up communities of practice for people to support each other in developing new skills. These efforts were complemented with a well managed, indexed web-site to augment skill development.

The three-dimensional approach to HR Transformation outlined using the Direction, Commitment, Capability model offers a proven, strategic approach for navigating change. It demonstrates that it’s possible — with thoughtful planning and execution — to both live and lead whatever change your organization is undergoing.