Cracking the Code of Change: What Every Leader Must Learn from HR

The Leadership and Navigation, Business Acumen, and Consultation competencies can help HR professionals to identify obstacles that are holding the organization back and support the change process. In this case, a chief human resources officer (CHRO) points out the larger implications of a single problem and helps a chief executive officer (CEO) see the need for action.

A firm has implemented a change in its strategic direction, but one divisional head of sales is resisting the shift in focus and is persisting in following the old sales and marketing strategy. The CEO has tolerated this small rebellion.

The CHRO comes to the CEO and points out that this focus of resistance is problematic. The divisional head is hurting the change initiative and damaging the perception that the rest of the firm has of the CEO. As long as he tolerates this behavior, the CEO appears weak and not fully committed to the change. The new strategy will create some emotional turmoil as it changes many people's jobs and relationships, and the employees need to see their leader's commitment to this direction.

The CEO accepts this perspective of the situation and meets with the divisional head to restate expectations and possible consequences for not meeting them.

Managing Change Initiatives

Organizational change can have a broad impact. For example, a reorganization that follows a merger can require new departments with different leaders, revised job titles and functions, new pay structures, and new policies and processes. Organizational change can also be very focused, such as reengineering one process and providing necessary information and training to affected employees.

Large or small, these changes trigger complex responses in the organization and in individual employees. HR's role as consultant requires that HR professionals know about more than just how to design a new solution to an organization's challenges. They must understand and be able to manage responses to change so that these initiatives achieve their intended goals. During a change initiative, stakeholder management becomes a key responsibility of HR. Being a leader amidst change requires clarity of vision, creative problem solving, tactful communication, and courage.

Role of HR in Managing Change

HR should try to be involved early in the planning of change initiatives. HR understands the organization's policies and business requirements, employees' perspectives, and channels of communication. Given their responsibilities and purview within an organization, HR is also well situated to manage interactions between relevant stakeholders-that is, any employee, manager, vendor, or customer whose work or experience might be affected by the change initiative-by coordinating communications and managing the relationships between various stakeholders. Contributing this organizational knowledge and expertise can improve the initiative's chance for success.

Specifically, HR can:

·         Identify programs, practices, and policies that might benefit from change.

·         Identify the impact of the change on people and departments, which may include gaps in skills, lines of communication to be opened, and new policies that may be required.

·         Assess the impact of changes across the organization and also on outside stakeholders-the ripple effect of change.

·         Consult with the organization's leaders on ways to support the change initiative, including changes in organizational culture (for example, different approaches to decision making), new processes (for example, reward systems aligned with the new behaviors), and investment in learning and development to support employees as they develop new competencies to perform their changed roles.

·         Use communication skills and channels to contact all affected stakeholders quickly and uniformly communicate the details of the change initiative, and keep them apprised of developments and progress. Effective communication during periods of change can produce:

                  i.           Identification and mitigation of potential risks.

                 ii.           Increased management and employee buy-in and satisfaction. Increased trust between management and nonmanagerial employees.

               iii.           Identification of needed change-related training initiatives to improve employee skills and proficiency throughout the change process.

                  i.           Increased leadership cohesiveness.

·         Measure the effectiveness of the change initiative                                                                                                

·         Track issues that arise at any point and follow up to deliver superior service to HR's internal customers.

Managing change may require making leaders more aware of how they themselves need to change. For example, if they want more agile decision making that arises from self-directed teams, then they must relinquish some degree of control (manifested, for example, in increased limits for expenditures without management approval). If they want greater workforce stability, then they must be willing to engage in frank discussions with unions and respectful contract negotiations. It often falls to HR to show how what leaders want and what employees need can be aligned.

The Impact of Change on Productivity

Employee productivity and engagement can be affected by both large shifts in culture, structure, and strategic goals and small changes in roles and processes. This effect is often referred to as the "dreaded J curve," shown in Exhibit 46. When change is introduced, there is typically a decline in performance and then a slow return to previous levels, and if the change is effective and if it is managed effectively, a more rapid growth to a new level of performance. A poorly chosen intervention or poor management of the change process can result in a more permanent flattening of the curve at a low plateau, as indicated by the dotted line. It is HR's responsibility to work with stakeholders to help them understand the benefits of a change initiative-not only in broad, organizational strokes but also in how a successful initiative will benefit the individual (for example, by improving the efficiency of their assigned work processes).

Managing the J Curve

To manage the negative effects of change on productivity, HR professionals can use the fact that individual employees react to change differently.

·         Some may resist change, driven perhaps by fear of the unknown or a lack of confidence in their ability to perform new tasks. They may prefer inertia and the comfort of the familiar to the challenge of learning new roles and skills.

·         Some employees will welcome the change because they can immediately see its benefits (for example, improved communication, more individual control).

·         Others may simply be waiting for more information to decide how they feel.

Understanding and being able to manage these individual differences can affect the speed of the organization's recovery to full productivity.

The key to managing change is to recognize these reactions promptly and respond appropriately. Resistant employees, for example, can derail a change initiative quickly if their attitudes are allowed to affect other team members.

·         For employees resisting changes, managers must make a special effort to listen to their fears and doubts, to check in frequently, and to offer additional resources to help them adapt to new processes or structures. Managers can also emphasize the benefits that outweigh the costs of change. If an individual's attitude becomes harmful to the group, the manager may have to emphasize new expectations and the employee's obligation to meet them.

·         Managers can use more receptive employees as champions of the changes, communicating their reasons and their enthusiasm to their peers.

·         For employees who have not committed to or have rejected the change, managers may have to sell the potential benefits-both organizational and personal-of the change. Managers can also assign them tasks or roles to increase the level of their involvement in the process.