HR professionals have moved from industrial relations where they negotiate the terms and conditions of work to personnel specialists who have expertise in HR practices like recruiting, compensation, training, and organizational development to business partners who deliver value to business success.
When HR professionals help business leaders deliver value to investors, customers, and communities, HR, in turn, creates value. This chapter is a series of many such topics that talk about HR Transformation and how it affects businesses.
Table of Contents
- Introduction to HR Transformation
1.2. Common Pitfalls
- Definition of HR Transformation
- A Model for Transforming HR
HR departments should respond to increased expectations given constantly changing and challenging business conditions. Here, the executives described the business challenges they had faced and how they had transformed the way they work.
Thoughtful and innovative HR executives who have helped their organizations and the HR profession make meaningful progress in contributing to the performance of their companies. Transformation theory draws from change literature found in sociology, psychology, anthropology, organizational development, systems theory, high-performing teams, and economics.
These disciplines teach ways to approach both large- scale and personal change. Theory without practice is conjecture and is usually irrelevant. Practice without theory is idiosyncratic and unsustainable.
A successful HR transformation increases the value human resources adds to the business. In businesses, promoting success may mean reducing costs, increasing market share, growing in global markets, or innovating new products or services.
In government agencies or nonprofit organizations, it may mean delivering services, achieving externally imposed goals, meeting constituent needs, or operating with reduced budgets.
The point is that HR professionals often focus internally on the function of HR rather than externally on what customers and investors need HR to deliver. An HR transformation should begin with a clear understanding of the business context because the setting in which you do business offers the rationale for the HR transformation you will do. Basic supply-demand logic asserts that if supply is high for any given product or service but demand is zero, then its value is zero.
There are common mistakes often made when starting an HR transformation:
- Action before rationale. Some companies begin an HR transformation by doing things in human resources such as implementing e-HR, restructuring the HR function, or designing new HR practices. These HR investments are then defined as transformational. HR transformation needs to be grounded in the context of business demands.
- HR in isolation. When an HR strategy is drafted in isolation from the business strategy, both suffer as stand-alone documents that probably won’t be sustained. HR transformation needs to be aligned with business transformation. It needs to be done in a way that focuses on adding value to the business rather than simply optimizing HR as a function.
- HR in increments. Some companies design innovative talent management, performance management, or total rewards process and declare it an HR transformation. These piecemeal efforts are only part of an HR transformation. HR practices need to be integrated with each other around key business results if they are to have lasting value.
- HR by individual fiat. Some companies invest in an HR transformation because of the whims of an individual leader or a desire for more personal or functional influence. These individually sponsored initiatives probably won’t be transformational. HR transformation needs to be connected to the overall success of the organization, not just an individual champion.
- Placing the HR structure before business strategy. HR departments believe that reorganizing human resources is the essence of HR transformation. HR transformation can only be complete as it helps implement the business strategy and drives business results.
- Efficiency equals transformation. A leading consumer products company described self-service as its HR transformation. Efficiency improvements can and usually are key elements of transformation, but efficiency alone does not make for transformational change.
A true HR transformation is an integrated, aligned, innovative, and business-focused approach to redefining how HR work is done within an organization so that it helps the organization deliver on promises made to customers, investors, and other stakeholders.
This work begins by being very clear about the rationale for doing the HR transformation. The rationale for HR transformation is too often from inside the company whereas the rationale should actually come from outside the company.
There is the four-phase model for HR transformation to ensure that HR drives business success and avoids the common pitfalls of such efforts.
- Phase 1: Build a business case. (Why do transformation?) HR transformation begins with a clear rationale for why transformation matters.
- Phase 2: Define the outcomes. (What are the outcomes of transformation?)This phase clarifies the expected outcomes from the transformation. What should happen because we invest in HR transformation?
- Phase 3: Redesign HR. (How do we do HR transformation?) HR transformation requires a change in HR strategy around departments, practices, and people.
- Phase 4: Engage line managers and others. (Who should be part of the HR transformation?) HR transformation requires that many people participate in defining and delivering the transformation.
These four phases sequentially, in reality, they occur concurrently. For example, while knowledge of business conditions has to frame HR transformation (phase 1), having the right HR transformation team (phase 4) is critical to initiating HR transformation. The formation of the HR transformation team is critical to the entire process.
This chapter represents the goals of the HR Leadership and models of HR transformation. HR professionals should be aware of the principles of HR transformation. HR will add value to business success and help them reach their goals.
HR professionals who continually complain about lack of access to business leaders will never gain access. To fulfill their HR leadership role, they need to be active participants in the process of setting business strategy.
DAVE ULRICH, JUSTIN ALLEN, WAYNE BROCKBANK, JON YOUNGER MARK NYMAN
- Introduction to HR Transformation — Chapter 1
- Why do HR Transformation? – Chapter 2
- What are the Outcomes of HR Transformation? – Chapter 3
- Redesigning the HR Department – Chapter 4
- How to do HR Transformation – Chapter 5
- Upgrade HR Professionals – Chapter 6
- Sharing Accountability for HR Transformation – Chapter 7
- Making HR Transformation a Success – Chapter 8