Itnplemetiting Major Chatige in the HR Organization: The Lessons of Five Companies Gregory C. Kesler and Julia A. Law, Competitive Human Resources Strategies, LLC T his article focuses on ways to improve the implementation of change in the human resource function. It examines the need to create an aggressive, action-oriented agenda for change that goes beyond vision and vague initia- tives. It defines three factors for transforming the human resources function in large multinational coq^orations. The three factors are illustrated through comparisons of the experiences of five large, successful multinationals that apphed them to varying degrees in their strategies to revitalize HRM. The article describes numerous tactics for applying the three factors. 26 HUMAN RESOURCE PLANNING
Transcript
Itnplemetiting Major Chatigein the HR Organization:The Lessons of Five CompaniesGregory C. Kesler and Julia A. Law, Competitive Human Resources Strategies, LLC
This article focuses on ways to improve theimplementation of change in the humanresource function. It examines the need tocreate an aggressive, action-oriented agenda
for change that goes beyond vision and vague initia-tives. It defines three factors for transforming the
human resources function in large multinationalcoq^orations. The three factors are illustrated throughcomparisons of the experiences of five large, successfulmultinationals that apphed them to varying degrees intheir strategies to revitalize HRM. The article describesnumerous tactics for applying the three factors.
26 HUMAN RESOURCE PLANNING
The Drive for Major Change in theHR FunctionFor more than a decatje, human resources man-agement has recognized the need to act as abusiness partner to line leaders (Galbraith, 1992;Ulrich et al.. 1994: Martell & Carroll. 1995:Conner & Ulrich, 1996). Many HR organizationsare discovering how difficult it is to implementbreakthrough change in the role of the function.especially on a worldwide basis. The irony is dif-ficult to miss, given the pressing need for change-management expertise to support continuous andradical change in the business. It is clear that HRleaders must demonstrate high degrees of change-management skills to change themselves.
In this regard. Eichinger and Ulrich (1996)reported discouraging findings from interviewswith line executives: "Individual members ofthe HR team are not strong enough or credibleenougli personally, to help HR succeed, much lessthe business."
M;my. if not most. large companies are active-ly engaged in campaigns to revitalize the humanresource management function. Case studies incompanies like AT&T (Conner & Wirtenberg.1993), Nortel (Kochanski & Randall. 1994), andWhirlpool North America (Kesler. 1995) haveoutlined models for navigating a new course forthe function. Many companies are ^^^^KMpursuing a similar vision: to createa partnership role, aimed al addinggreater value lo the business. Butvision and reality remain miles apartfor many HR teams because of thesize of the challenge and the manyobstacles which lie in the path.
Many companies have completedthe first and second phases of reengi-neering the HR function. Numerouspractices have been outsourced, andsome are now being brought back tothe inside of leading corporations inshared-services centers. While therehave been breakthrough improve-ments, the limits of reengineering and thedifficulties in implementation are now activelydiscussed in public conferences as well asmeetings inside major companie.s.
Summary Description of the FiveCompaniesFive large, high profile multinationals or majordivisions of multinationals (four American andone German) in five different industries set out to
Many, if not
most, large
connpanies are
make major changes in the role that HRMplays in making the businesses more competi-tive. While each of the five gave attention tothe three factors, they did so to varying levelsof effectiveness; and they utilized differenttactics, to varying levels of success.
At the onset of each change initiative, execu-tives in all of the case companies expresseddissatisfaction with the extent of the value-addingcontribution of the HR organization. The drivingforces for change in these HR organizationswere similar to those identified by AndersenConsulting and The Conference Board (1995)in their research report on more than 300companies:
• Major changes in business strategy requiresignificant shifts in competencies and culture.
• HR must make a more strategic contribution.
• Major reengineering efforts across thebusiness require more people strategies.
In the case of iwo of the five comparisoncompanies, major restructuring of the corporatebusiness lines and governance teams occurredwhile the HR transformations were underway.In both cases, the significant progress in HRrenewal positioned the HR functions to participate
^ ^ ^ ^ ^ ^ ^ meaningfully in the larger corporatechange efforts (see Exhibit 1).
The five companies were inthe midst of significant changes instrategy, structure, technology, andresource deployment.
actively engaged
in campaigns
to revitalize the
hunnah resource
nrianagement
function.
Top Brand, USA is a $5 billionmarketer of packaged consumerproducts to U.S. markets, with anexceptionally strong worldwidebrand. When the COO of the corpo-ration launched a worldwide learningstrategy, the company created anaggressive initiative to consolidatethe management teams of two prod-uct divisions into a single USA unit.
The new vice president for human resources forthe consolidated team grasped the opportunity tobuild on the larger reorganization and corporatelearning initiative by demanding a completelydifferent role for the USA HR function. The changeprocess began with a change in job and organiza-tion design, followed by competency assessment,-Staffing changes and a development plan fullysupported by the operating head for USA. Thenew head of HR contracted bold expectations with
->*«s§
HUMAN RESOURCE PLANNING 27
Profiles of Five Comparison Companies
[Metaco's] HR leadership
team worked together to
examine best practices
elsewhere, and then to
establish a collaborative
but aggressive change
effort.
Top Brand, USA
Chemco
Net-Tech
Metaco
DominantFranchise. Inc.
Core Business & Size
consumer packaged goods$5 billion division
chemicals & fibers$7 billion subsidiaryof European holding
network technology$5 billion global division
diversified consumer;ind industrial products$7 billion global corporation
consumer durables$7 billion product group
CSFs
brand m image me nttrade management
worldwide logisticsbest costselective different iation
structure realignment ofcompany into worldwideproduct units
need lo manage high growthand shifts ui worldwide presence
shift in corporate portfoliostrategy toward higher-value-adding products
new marketing strategy and productline changes & downsizing
the USA president, including support for poten-tially unpopular actions. As the larger corporatelearning strategy was implemented, the USA HRteam was well prepared, in contrast to otherHR units in the corporation, to help drive therollout of the corporate change strategy.
Chemco is a $7 billion regional business unitof a major European chemical company activelyshedding weaker businesses and realigningitself into several worldwide product groups.The vice president for human resourceslaunched process design teams to reengineerand outsource a number of highly administra-tive, corporate work centers. He then introduced avision for an assertive business partner rolefor all HR professionals to follow. The initiativeswere not connected in a clear, overarchingdesign; and despite some strong process improve-ments, there was no actionable road map forachieving the new vision. A year into theprocess, he recognized the problem and identi-fied a consultant who helped bring together afocused change strategy. The process quicklygained momentum after an effective model androad map for action were adopted. In the midstof the change process, the larger holding com-pany began a major restructuring of its $30billion global portfolio. While this created difficultchallenges for the council of HR vice presi-dents who were managing the change in HR,momentum was maintained, and the HR com-munity played a strong role in the corporaterestructuring as a result of the changesit had made in its own expectations, roles,and competencies.
Net-Tech is a top-tier provider of network sys-tems on a worldwide scale. It has grown quicklyby competing largely on the basis of its technolo-gy and market recognition. Then, it suddenlyfaced the need to build organizational strengthsin marketing and to respond to shifting customerexpectations in far-flung markets. The HR lead-ership team worked together to examine bestpractices elsewhere, and then to establish a col-laborative but aggressive change effort, spurredon by the vice president of human resources.In less than one year they created a well-con-ceived change strategy, then quickly designedand implemented a new organization structureand a new set of jobs, in addition to significantchanges in staffing. During that same periodof time, 60 incumbents were assessed against acommon competency model and reassigned tonewly defined roles. A series ol" action-learningworkshops was implemented, each involving lineparmere and a series of business support projects.
Metaco is a $5 billion worldwide diversifiedmetal products company, headquartered in theUnited States. Metaco took a different approachto realigning its HRM function across its busi-ness units. Like Chemco. it began with a newvision, but it went further; the HR leadershipcontracted a tiew role, in tangible terms, with theentire general management team. After this joint-ly derived mission was completed, utilizing aconceptual model, Metaco set about the taskof defining and reengineering the processes andsystems that would be required to deliver thenewly contracted mission. After the new processand systems architecture were designed, road
28 HUMAN RESOURCE PLANNING
map in hand, the HR team assessed all staff againsta new set of competencies that would be requiredto manage the evolving processes and the newmission. But HR revitalization at Metaco was tooanalytical, too cautious, and too slow. By mid-1997 the corporate business portfolio review andchange process were upon them and there wastoo little change in the HR organization for thefunction to participate as a major force.
Dominant Franchise, Inc. (DFI) is a $.S billionNorth American subsidiary of a larger multina-tional marketer of consumer durables. DFIdeveloped a creative process for contracting anew role with the line organization of the com-pany. The process included a model for reachinga joint agreement on the mission, which led tothe defmition of a set of new HR competencies.The incumbents in the function were assessedby internal clients against the competencies, anddevelopmental plans created to upgrade the col-lective know-how of HRM. The change processproduced heightened expectations from the lineorganization, as well as the t25-strong HR-pro-fessional community, and the role of many HRprofessionals began to change. However, it grewincreasingly difficult toward the end of the sec-ond year to shift the energy and resources fromthe old, labor-intensive administrative work tothe newer, business-partnering roles, Nearly twoand a half years after the change process hadbegun and after considerable momentum waslost, DPI launched process reengineering teamsto gradually redesign HR work across the corpo-ration. (Fortunately, the European ^ ^ ^ ^ ^company at DFI learned from themistakes of North America, and initi-ated a far more active, less cautiousapproach to pan-European change.)
It is critical,...
...to create a clear
Three Factors for DrivingChangeThe Corporate Leadership Council(1995), in its exhaustive study of HRtransformation effoils among its manymember companies, has argued thatHR executives must overcome "thevagueness of vision" if they are toachieve breakthrough change in the role of thefunction. !t is critical, the report argued, to createa clear and tangible blueprint for change, imple-mented over a sustained period of time.
The authors of this paper have actively experi-mented, over the past five years, wilh just such a
and tangible blue-
print for change,
implemented over
a sustained period
of t ime.
blueprint in our work with five large multination-als that seek to transform the role of HR. Someof these companies have made more progressthan others. Close examination of the experi-ences of each highlights three factors that leadto effective change in the HR organization:
1. The added-value proposition must be clearlydefined for the business - and should guide theoverall change process,
2. Four design tracks should be planned andexecuted:
a. Contract a new vision/mission
b. Redesign work processes
c. Redesign jobs and organization structure
d. Build new competencies
3. A road map for change is needed to turn thestrategy into a set of action items thai can be car-ried out by a large number of line and HR peoplewho have a stake in the outcome.
Learning to transfoiTn the function is a majorstep toward supporting the transformation of thebusiness. Each of the three factors is examined bycomparing the experiences of the five companies.
I.The Added-value PropositionKesier (1995) has deimed a model that highlightsthe need to force a critical look at HR work,not only in terms of processes and how wellthey are performed, but in terms of a seconddimension that detemiines to what extent process
^ ^ ^ ^ ^ ^ ^ excellence is likely to add economicvalue for a given business.The "HR grid" includes processeffectiveness on one dimension andsix value-creating behaviors on thesecond dimension of a matrix. Themodel assists leaders to set a tough-minded defmition of partnering,focusing on three performancebehaviors (on the left-side of ihegrid) which generate higher valuethan the three on the right - for anyof the HR practices against whichthey are applied.
The model provides a means for HR and linemanagers to contract a new mission, with a high-ly operational definition of "business partnering"that fits the business strategy. In the fiv€' companieswe will examine, the HR grid provides a strategyframework for designing new organization struc-
HUMAN RESOURCE PLANNING 19
HR Grid Model (for Net-Tech, Inc.)
Value-adding Performance Behaviors
HR performance can
only be judged by how
effectively HR outputs
add value for customers
and shareholders.
Partnering
Processes Catalytic Assessment Design of ProcessInfluence & Diagnosis & Structure
Organizalion Design
Straiegic Slaffmg
Manaaing Performance
Leammg & Education
Transactional Fulfillment
Policy Service Problem-Assurance & Support Solving
ture, new proces.ses, and a new set of competencies,each aligned with the other.
The grid is built on two separate dimensionsfor designing the HR role:
a. Critical HR Processes
b. Value-adding Performance Behaviors
Grid Dimension One:Critical HR ProcessesMost HR organizations can quickly define whattheir key processes and practices are. These "toolsof the trade" can usually be summarized as:
a. strategic staffing and selection
b. learning and education
c. performance management
d. rewards and recognition
e. organization design
f. communications
Companies like Chemco have defined theHR tools in more of a process orientation; HRpractices are designed into the business modelin terms of three processes, co-owned by tinemanagers and HR managers:
a. aligning organization
b. developing capabilities
c. managing perfonnance
Outputs can be idenfified for each of theseprocesses; the outputs become the basis forcontracting roles. HR performance can only bejudged by how effectively HR outputs add valuefor customers and shareholders.
Grid Dimension Two:Value-adding Performance BehaviorsIn order to implement planned changes, theremust be agreement with line executives about
how HR processes will be designed to add greatervalue, while stripping out wasteful cost. The sixvalue-adding performance behaviors, in the hori-zontal axis of the grid, are a continuum, dividedinto two fundamental roles and competencies:transactional fulfillment and partnering. The twohalves of the continuum allow managers to plottoday's activity, and to set specific targets for whatfuture work must be done to support the business.
Both halves of the work continuum mayremain important to a given business. However,work on the "transactional" half is measured onthe basis of reliable, cost-effective fulfillment.Partnering work, on the other hand, is measuredby improvements in organization capabilities,critical to the business strategy and demonstratedin business perfonnance. Most important, today'sresources are misallocated among the two halves.
Considering the two sides of the model, eachof the HR processes can be viewed through twovery different lenses. Training and educationpractices, for example, may be built on the basisof transactional fulfillment: preparing a coursecatalog, recommending resources, enrolling peo-ple, delivering programs, and keeping records.{Brick-and-mortar training facilities are usuallyheavily biased toward fulfillment, measuringthemselves on the basis of the number of peopleparticipating in programs per year.)
In contrast, learning and education can beconceived through the partnering lens: in thesecompanies, staff are chartered as consultants tobusiness units, and treat business problems as theirresponsibility by bringing leaming resources, tools,and practices into the management process.Managers may test strategy options through sim-ulations that capture the strategic dynamics ofdecisions they must make. Later, they may ana-lyze how well their strategies are working; theylearn from solving problems because they areshown how to use simple learning disciplines
30 HUMAN RESOURCE PLANNING
(data gathering, experiments, after-actionreviews, mapping, and red teams) supportedby internal or external experts (see Exhibit 3).
At Top Brand and Net-Tech, this is theessence of the new HR "consultant" role, whichis the core position in HR. These "new general-ists" are similar to accoimt managers in a salesteam, who define and manage all partner expec-tations while drawing on a few select centersof excellence or external resources as needed.
Fulfillment of certain HR service fundamen-tals is an important priority for any HR team.Meeting these commitments is often the basis forestablishing credibility as the change process isconceived. However, in most HR organizations,the fulfillment obligations consume the greatmajority of the resources available to the func-tion. This form of HR ''manufacturing" keepseveryone busy creating programs, policies, andpractices, which are marketed to line "cus-tomers." (These so-called customers may evenbe surveyed in order to tell HR what they wantin the way of services. Few customers ever askfor less or propose that work be eliminated, andfew are ever satisfied.) By definition, value is notadded to the degree possible. Without majorredesign of mission, process, structure, and com-petencies, this frustrating reality will not change.
In a number of companies, the grid served asthe glue to align the four design tracks, which aredescribed below. Mission was contracted withthe grid, process improvements were prioritizedagainst the grid, and competencies were defmedagainst the value-adding perl'ormance behaviors,as well as process technologies.
2. Four Design TracksThe experiences of the five companies, and otherless successful examples, point to these commonobstacles and challenges facing the revitalizationprocess:
• poor alignment exists in the expectationsamong key line management and the HR organi-zation on the nature of the role
• poor HR processes and information divertscarce resources into labor-intensive, transaction-al tasks
• "HR generalist" Jobs are often wasteful clus-ters of fire-fighting, administration, and generalservice-fulfillment responsibilities that divertnearly all energy away from most forms ofproactive work
• the skills and know-how of HR staff mem-bers do not improve to significant d
A change strategy is needed to confront theseissues. Four change levers provide an actionableapproach to change:
a. contract a new mission with linemanagement
b. redesign processes
c. redesign jobs and organization structure
d. develop new competencies
Contract a New Mission. Ulrich (1990)and Kesler (1995) have written about theneed for HR units to contract clear expectationswith line executives. The experience of thefive comparison companies highlights the diffi-culty most HR executives face when attemptingto do this.
In many companies, the line orgimizationexpresses the need for greater strategic involve-ment of the HR function in the comDetitive-ness of the business. In Metaco. particularly,a new CEO expressed his expectations forboth improved contribution and reduced cost.Unfortunately, this is rarely enough :o drivechange. Often a crisis - a "burning platform" -is necessary.
Two Different Views of Successioti Platitiitig and DevelopmentPartnering Approach Transactional Fulfillment Approach
Continuous intense assessment process by talent poolcommiltees of line BU miinagers
Clear ownership by top executives objectives andimpact on business, led by CEO
Development scenarios created by line managers resultin active moves; blocked positions are not allowed
Depth is enhanced by proactive screening, selection,and occasional external hires
Annual succession planning reviews are completed,led by HR
Plans are documented, filed, and occasionalt> reviewed
HR generates candidate slates when vacancies occur,based on replacement plans
HR proposes programs to support developmeit
HUMAN RESOURCE PLANNING 31
While most line executives expect significantlyreduced costs (and improved productivity) fromall staff groups, at the same time line managersseem unwilling to lose the convenience of manytransactional support activities (unless the platformthey are on is also burning). These expectationsoften become confusing for line and staff peoplealike. In many cases there is very little communi-cation aimed at sorting out those expectations.Change requires some consensus on what workshould be eliminated in order to shift resourcesfrom employee or manager services, for exam-ple, to enhancing the competitiveness of thebusiness (see Exhibit 4).
One HR team developed a creative strategyfor involving division general managers andgroup presidents, as well as groups of HR stafffrom across the company, in a sequential seriesof educational workshops that allowed pairs ofpartners to see how the proposed new missionfor the function would be applied in helping theirbusiness implement key corporate or businessunit change initiatives.
The objective of the team was to raise theexpectations of line and staff people simultane-ously through action leaming. Each workshopproduced deiiverables (mission statement, goalsajid outputs, future job models, etc.) that advancedthe change process.
Contracting must be a two-way dialogue inwhich client managers influence and are influenced
by their HR partners. A process is needed to iden-tify HR priorities for the business through intenseinvolvement of both HR and line management.
Redesign HR Processes. The second trackto breakthrough change i.s effective processdesign. Ultimately, the willingness and abilityof the business to eliminate and redesign workdetermines the extent that resources are shiftedfrom the right side of the grid to the left. Alltoo often, information systems (always rifewith problems) are used as an excuse for notquickly changing work.
Chemco ted its change strategy with reengi-neering and outsourcing of HR work and enjoyedsome immediate, but short-lived, successes.A highly sophisticated approach to reengineeringat Metaco produced enormous degrees of com-plexity that the line partners could not understandor relate to. The ultimate design was contingenton the approval of a very large capital budget forsystems installation that was not viable for thebusiness. Later, the HR leadership at Metacoregrouped and developed a practical approach,which continues to be managed. Metaco supple-mented its analysis with an extensive benchmarkstudy on productivity and staffing levels for HR.Unfortunately, the process had bogged down incomplexity, causing the general managers to loseinterest in the once well-seated added-valueproposition for HR.
Expectations of Line Partners for Improved Performance
Top Brand. USA
Chemco
Net-Tech
Metaco
DFI
More
Contribution
•••
Reduce Cost to
Business Issues
•
••
Improved
Reliability
•
More
Responsive
••••
Scope of Process and Structure Changes
Top Brand. USA
Chemco
Net-Tech
Metaco
DFI
ProcessesReengineered
•
Major
IS Instaliation
Organization
Restructured
• •
• ••
Line People Assume
More HR Responsibility
•
•
3 2 HUMAN RESOURCE PtANNING
Net-Tech, on the other hand, utilized simpleactivity-based accounting methods to definewhich activities in the cells of the HR grid wereconsuming resources, expressed both in dollarsand full-time equivalent headcount. This led toa fast start in identifying potential opportunitiesfor work ehmination and consolidation.
At Dominant Eranchise, process reengineeringproved very difficult to organize for nearly twoyears, and the contracted mission was not fullydelivered, leading to cynicism outside and insidethe function. In-baskets of most HR professionalsremained very full. Three years into the process,top executives set a mandate for all staff functionsto reduce selling and administrative expenses by30%. DEFs North American HR team had lost itswindow of opportunity to set its own course beforethe platform caught fire. Eortunately. the "spadework" was completed to move them quickly for-ward under the forced cost-reduction goal.
In contrast, one major division within DEImade significant progress in process innovationthrough the use of joint, line, and staff designteams. When line managers were provided withactivity-based displays of data reflecting currenttransactional costs, it was possible for them tosort activities into four categories of value. Afterall activities were sorted, the same line managersrecommended HR transactions that could be:
a. eliminated
b. consolidated
c. returned to line leaders and teams
d. redesigned
Implementation occurred over a two-yearperiod of time with minimal changes in informationsystems technology. In the five case corr panies, theinformation systems challenges remained formida-ble for years. Some companies allowec themselvesto be more hobbled than others by this reality.
Redesign Jobs and Organization Structure.Companies like Net-Tech, Top Brand, imd Metacohave focused on the need to create new organiza-tion structures and to re-staff the HR unit in orderto force a division of labor between importanttransactional work that should be continued andconsultative, business partnering work. It is clearthat transactionai-fuifillment work (ircludingemployee relations and personnel adm nistration)will always, if allowed, expand to consume mostof tbe available resources.
Similar to focused business units, focused HRstructures must be created to dedicate the propermix of resources to piirtnering and transactionalwork, as part of the change strategy. Fulfillmentwork is increasingly being consolidaied intoshai'ed-services centers, making it more importantfor partnering work to be decentralized intothe business teams. At Net-Tech and Top Brand,the goal is for the HR consultants and tie servicecenter teams to be supported by a small numberof highly competent technical experts whose tech-nologies meet the needs of the businesses. Thethree new roles work together in fiexible clientteams, led by the front-line consultants, drawingon consolidated resources inside and outsidethe company (see Exhibit 6).
Paradigm for Focused HR Organization: Three Families of Future HR Positions
Expert Resource Pool• Cenlral pool ofspecialisLs/designers
• Analysis of needs
• Benchmarking
• Planning
• Design/deveiop programs
• Suppori rollout of programs;teach others how
• Suppon consuliants with "tiestpractices" and key expertise
• Assure best practices are exchanged
Front-line Partners (Consultants)• Decentralized, BU aligned
• Manage all "tiansactional" supponsystems (hat are up and running
• Manage systems impleirientation
• Direct projects to eliminate/automate work
• Design automated clienl-focusedservices
• Assure company standards are met
Similar to focused
business units, focused
HR structures must
be created to dedicate
the proper mix of
resources to partnering
and transactionai
work, as part of the
change strategy.
HUMAN RESOURCE PLANNING 33
HR executives are
frustrated with the lack
of effective action taken
v/ith regard to the
development of talented
people, and even more
with regard to people in
their own organizations.
Designing an effective HR organizationrequires aligning skills and resources around theappropriate mix of service center and partneringwork, contracted between HR and line partnersin a give-and-take fashion based on the needs ofthe business.
in the most successful case companies, toughdecisions were made about where resources wereto be reallocated based on the activity-basedaccounting completed earlier against the grid. Intwo cases, unpopular decisions were made tounder-resource some traditional employee relationswork, while training leaders learned to be lessreliant on this kind of support. Design teams,including line and staff people, made joint decisionsto return certain HR work to the line leaders or toself-managed teams. Clearly., in the comparisoncompanies, the involvement of line managers indesign teams is another form of 'contracting'" thatincreases the likelihood that work will be elimi-nated or returned to line leaders (see Exhibit 7).
Contrast this with the typical HR organiza-tion that has evolved (like most other functions)to levels of staffing and skill mix, based onincoming workloads, that may or may not con-tribute to competitive advantage.
Top Brand, Net-Tech, and. later, Metacodefined "partnering leader" or consultant roleswith very little transactional work, while consoli-dating service center work, expecting the qualityand reliability to improve. In order to createfocus, the new structures in these three weredesigned with "fire walls" among transactionalwork, partnering work, and the technical excel-lence centers to ensure that priorities were
EXHIBIT 7
A Sampling of Design Teatn Recom-mendations at a Division of DFI
HR Transactions to Be DoneJob bill sysicm
New hire orientation
Job administration
Team effeciivenessassessment
Team facilitation& development
Team training
Attendance records, etc.
Outcomes NeededLine control ihroiighworklbrce planning
Line organizationcompletes
Already transferredto line
Conducted by tront-lineleaders
Conducted by front-lineleaders
Conducted by tront-lincleaders and team members
Administered by teams
managed as planned (see Exhibit 8). After the newstructures were defined, the direct report teams atboth companies wrote position models retlectingthe three new roles, and documenting the neces-sary competencies (and knowledge, skills, andabilities, or KSAs) using an established menu.
Net-Tech established a "czar" for processredesign and for establishing highly-consolidatedservice centers. In Net-Tech, all transactionalwork that could be consolidated immediately waspulled together under this director-level leader,who began with a new staff to prepare an aggres-sive strategy in two time frames:
a. First six months: seek immediate opportu-nities to eliminate work, to create economiesof scale, and to improve utilization of cur-rent resources with current tools
b. Six - 24 months: prepare and begin toimplement a strategy for process redesignand, where appropriate, installation ofintegrated data systems.
At Net-Tech the initial design of the servicecenter included the consolidation of all employeerelations work into a call center of collocated,experienced resources who could resolve mostissues, while directing more difficult problems tointernal HR consultants or higher-level line man-agers. Top Brand pursued a similar approach forits USA operations.
At Dominant Franchise, the HR leadershipteam did not implement its new structure design,and the progress of their change effort wasreduced to slow, incremental change, as most HR"generalists" continued to spread themselves andtheir resources widely around the organization.
Competencies. There is a fourth track needed toproduce lasting change. The business partner rolefor HRM requires more than a clear role definitionor "contract" to deliver certain outputs; it requiresleadership, strategic planning, and business know-how. For most traditional HR organizations, theseskills have been neither expected nor developed.A new role means developing or acquiring verydifferent skills and knowledge.
The literature on HR competencies has grownplentiful in recent years (Yeung et al., 1996;Kesler, 1995; Ulrich et al, 1995; Lawson, 1990;Schein. 1986). Yeung (1996) and his associateshighlight the role that skill development playsin sustaining change in the HR function. Studieshave highlighted the need for change-agent skillsand greater business knowledge; the experiences
34 HUMAN RESOURCE PLANNING
of the five case companies illustrate the need, aswell as the challenges faced.
While competency modeling has proliferated,the effective application of competency models toguide the assessment, selection, and developmentof talent is less common. Muscle-building HRknow-how is a slow process in many companies,especially (hose that rely exclusively on trainingsolutions. A few, in contrast, have chosen to recruitdozens of high-level players into the function fromoutside to accelerate the change process. A few cor-porations creatively combine intemal developmentstrategies with selective infusion of outside talent.
HR executives are frustrated with the lackof effective action taken with regard to the devel-opment of talented people, and even more withregard to people in their own organizations.Creativity and high degrees of involvement byincumbents is necessary.
Among the case examples, Net-Tech and TopBrand demonstrated willingness to develop inter-nally while aggressively adding external talent tothe mix. Chemco was effective in creating a .seriesof tactics for intemal development of skills, oncecompetencies had been assessed. A Chemco taskteam created a development resource guide, atable of numerous effective developmental tacticssorted by the competency dimensions in the HRgrid. Another task team developed an HR experi-ences and careers model, based on four tiers ofexperience and accomplishment. Tlie model wasused in a new talent-pool process, managed by thecouncil of top business unit HR officers, to guide
EXHIBIT 8
New HR Roles at Top Brand:Five Positions, Based on ThreeFuture Job Families
Expert Teams
1. Organization Planning
2. Leaming & Education
3. Sales & Productivity Incentive Design
Business Partners
4. Organization Effectivenes.s Consulting
— All individual contributor roles;no administrative responsibility
Service Center
5. Human Resources .Services
— Employment, compensation, and benefitsadministration
— All employee relations transactional work,case manaeemeni
the movement of talent in a plannec mannerthrough the three different kinds of roles (partner,technical expert, and service center), based oncertain career milestones. The career experiencesmodel was communicated to all HR pi ofessionalsand their line partners in subsequent v^orkshops.
After the consolidated assessment data wereanalyzed at Chemco. tlve training-need prioritieswere identified for the majority of HR professionals:
1. client contracting
2. basic financial tools
3. business strategy concepts
4. organizational diagnostic tools
5. world-class manufacturing concepts
A customized program in contracting skills,aligned with the HR grid model, was developedand delivered, followed by tailored oif-the-shelfprograms in financial and strategy fundamentals.One year later. Chemco HR leaders cliartered a
EXHIBIT 9
Sample Interview Comments fromChemco, One Year after AssessmentFeedback Was ReceivedDeveiopment PrioritiesRanked by Frequency
FrequencyMentioned
Business Unit Needs/Knowledge
Leadership & Influence
Strategic Tiiinking/Planning
Contracting & Consultation
Asscssmenl & Diagnosis Tools
Organization Design
Facilitation
Alignment of HR wilh Line
Development Actions Described(20 professionals interviewed one year later):
• Forty-nine action items were idcntiHed. More than80% of the developmeni actions listed were specificand actionable. One person indicated no lesponse.arguing that other priorities made i! imponsible.
• Participants are utilizing a rich mix of leaming expe-riences, as well as self-directed reading programs andformal training programs, both inside and outside thecompany.
• While contracting has been done by some participants,ii appears that a majority still have taken iittle actionin this regard,
• A number of panicipants seek more resources to aidin their development efforts.
• Many comments suggest that the need to ict as acatalyst is understood by half or more of ihe respon-dents as a key to piirticipating in the transition.
HUMAN RESOURCE PLANNING 35
task team to complete a post study on the impactof the developmental assessment, including inter-views with a sample of participants (see Exhibit 9).
Net-Tech adapted the authors' competencydatabase to assess and select all active HR staffinto newly-designed roles. HR leaders providedface-to-face feedback of the assessments, thendesigned a 12-month curriculum of action-learn-ing workshops to help the staff members learnnew skills. Working together in client-centeredteams, staff members utilized diagnostic toolsand methods with their new line partners betweeneach workshop to complete contracting forexpectations. Reassessments with 360-degreetools were planned as follow-up to the training.and an HR talent pool process was implemented.
3. Road Map for ChangeThe third factor enabling change is an effectiveroad map for implementing the change process.This includes a sequenced series of tactics, builton the four change tracks described in the previ-ous section and mobilized in such a manner asto involve a critical mass of line and HR people.
The road map is created by fust sequencingthe three change tracks in a manner that best meetsthe needs of the business, while reflecting theculture and history of the company. For example,in Chemco and Net-Tech, while the need for con-tracting a new role with the line organization wasrecognized, past initiatives and norms made itclear that contracting would only be successfulif HR leaders first demonstrated some improvedresults that could be held up as a tangible exampleof why the "new role"' was critical.
Usually, the four tracks are managed simulta-neously, but one or another tends to lead (seeExhibit 10). At Net-Tech and Top Brand, structureredesign was selected as a lead track, largelybecause immediate changes in resource alloca-
tion were needed due to restructuring and otherchanges in the business. In both of these cases,the top HR leaders were particularly clear-mind-ed about the destination and were aggressivelydetermined to begin the change process byquickly demonstrating to those inside and outsidethe function that HR work was going to be trans-formed. While structure is usually a blunt instru-ment for change, in both cases it was an effectiveplace to begin, because it was part of a largerstrategy for change.
In Chemco. DEI, and Metaco, a more gradualapproach was planned, starting with the defmitionof a new mission and vision. In all tliree, educationand extensive involvement of diagonally-slicedteams of staff members in benchmarking andvision-setting were utilized. Two of these threeprojects bogged down on multiple occasions asinternal obstacles to change were patiently con-fronted or massaged by the leadership teams. Themomentum of these more gradual approaches, twoor three years later, was more difficult to maintain.In the case of Metaco. a planned, major corporaterestructuring led to urgency for the function to takecharge of its destiny.
After the overall tracks are arranged in asequence, the specific change tactics (activityaccounting, survey assessments, job modeling,executive contracting, etc.) are planned in phases,often within a two-year time frame. Next, thephases are broken down in greater detail in aGANTT chart or similar time-bound format,mapped out over an 18-month period of time.
Summary and ConclusionTlie experiences of these companies illustrate thechallenges facing HR organizations that seek toremake themselves. The paper argues for theneed to utilize change strategies that overcomethe "vagueness of vision" by utilizing:
Sequencing the Change Tactics at MetacoContracting New Mission
• Education
• Benchmarking
• Mission drafts & GM contract
Upgrading Competencies
• New job models
• Assessment & feedback
• Learning tactics
Reengineerinf HRWork Processes
• Activity diagnosis
• Priority setting
• Design teams
36 HUMAN RESOURCE PLANNING
a. an added-value proposition(built on business performance needs);
b. tangible changes through four tracks (mis-sion, processes, structure, and competencies);
c. a road map for sustained implementation.
These change strategies are not unlikethose aimed at transforming an entire businessor enterprise; vision is critical but not sufficient.Among the specific learnings from these fivecompanies are the following:
a. Incremental change produces littleprogress; changes in mission, structure,process, and competencies are requiredto overcome inertia and other obstacles.
b. Fast resuhs are needed to build momentum.
c. A different HR generalist role is needed,in which fulfillment aiid partnering workare segregated.
d. Ongoing involvement of line partners iscritical in the long term.
e. A contract with the top-level businessleaders is very desirable; sometimes a newcontract is not possible without first seeingdemonstrated improvements in results.
f. Momentum requires risk taking and tangibleimprovements in processes and work design;HR change strategies should be plannedaccordingly.
g. Design teams are effective means ofinvolvement and should include line
managers whenever possible.
h. Service centers provide numerous optionsfor consolidating transactional work. Bothshort-term and long-term solutions needto be planned and acted upon.
i. Information systems are a persistent obsta-cle, but should not be used as a reason fornot moving forward aggressively. In anycase, the data system is not an effectiveplace to begin.
j . Competency modeling will not producechanges in skills and talent. Aggressiveaction is required, usually involving bothintemal development and external acquisi-tion of talent.
k. The HR grid is an effective framework forlinking together an overall HR change strate-gy and for contracting new roles with linebusiness partners.
1. Ultimately, changing HR means returningsome so-called ''HR work" to the line orga-nization; this is consistent with the overallredesign of work and organizations in manycompanies, and these initiatives should belinked together.
HR executives would do well to understandthese issues, as they apply to all business change,to a great extent. Leadership, of course, is thegreat moderating variable, once again. As humanresource executives are called upon to help leadbusiness change, they will ftnd plenty of oppor-tunities within their own organizations.
A High-level View of the Change Road Map with Tactics at Net-TechPhase I
Plannini, Situation Analysis,Structure Alignment
1. Staff olT-site planning meeting
2. Communicate new vision withsenior executives
3. Communicate with "all HR" staff
4. Task I draft of new roles
5. Task 2 draft of resouire allocation
6. Senior staff assume new roles
7. Use competency menus to furtherdefine new position models
8. Begin to move HR staff membersinto new roles
Phase II
Design Teams CompetencyAssessment
1. Launch design teams(including line managers):
a. Job modeling team
• design 4-5 key roles in neworganization per the vision
• tailor ihe competency modelfor each role
b. Process redesign team.schartered, based on activityaccounting
c. Competency survey assessment
2. Make further smicture adjustments
Phase
Process Improvement& Staff Development
1. Curriculum planning based onconsolidated data; begin training pro-gram delivery
2. Create strategic staffing processfor HR talent pool
3. Implement recommendationsof process redesign teams
4, Complete automated systems strategy
5. Plan post-audit phase to measureimpact of change, includingindividual assessment re-survey
6. Plan renewal
HUMAN RESOURCE PLANNING 37
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