HR and 'Always-On' Transformation

A new report finds CHROs have a significant role to play in helping CEOs adapt to a new style of leading.

By Julie Cook Ramirez

Transformation has long been viewed as a one-time, crisis-driven initiative of limited duration: Get in. Make things better. Get out.

However, according to a new e-book from The Boston Consulting Group titled Transformation: Delivering and Sustaining Breakthrough Performance, leading organizations are committing to a new kind of transformation that heralds the end of individual transformative initiatives in favor of "always-on" transformation.

A confluence of factors have led to this shift in strategy: unparalleled disruption due to globalization, technology, and a volatile marketplace, along with "an increasing view that transformation is not just for laggards that are in distress, but can actually be a means to achieve superior performance," says Jim Hemerling, senior partner in the San Francisco office of the Boston Consulting Group.

"Companies will have several transformations of various types underway at various stages, each building upon and often interconnected with the others," says Hemerling. "Executed well, these combine to take the company to successively higher levels of performance."

Unlike continuous improvement, which tends to be bottom-up, always-on transformation consists of "large-scale transformation programs that are typically initiated and driven by senior leaders and Boards," says Hemerling. "These are big transformative moves that can come along in parallel with more bottom-up continuous improvement"

Such large-scale transformative efforts require leadership that is not just about being directive, having a vision, communicating clear milestones, and then holding people accountable for meeting them, says Hemerling. Rather than "treating people as a means to an end," leaders must reach out to employees, listen to them, actively engage and inspire them, and then provide opportunities to contribute their creativity and energy to the transformation.

In Lincolnshire, Ill., consultants at Aon Hewitt have not only been "preaching the vision of transformational leadership," they have witnessed it as a best practice in organizations that are "thriving in a world of transformation, uncertainty, and volatility," says Seymour Adler, a partner in the firm's talent and rewards practice.

"It's really important that leaders recognize that they don't possess all the answers, that there is wisdom in crowds and in the rank and file employees throughout the organization and that that wisdom needs to be harnessed, which means they need to listen to and energize people," says Adler. "They need to change their leadership style to be one that is more introverted in the sense that it's more about forging deeper relationships, rather than command-and-control."

As leaders seek to be less focused on giving directives and more on energizing the organization, they're increasingly looking to HR as a strategic transformation partner. This is a significant shift from how transformations have typically been undertaken, with HR often viewed as an afterthought, says Hemerling.  In always-on transformation, there's a recognition that HR not only has a role to play in making sure the organization has engaged in the necessary hiring, downsizing, and restructuring to drive the desired change, but also to help the CEO become emboldened and fluid in his or her leadership style.

The concept of HR as a strategic business partner is nothing new, but some CHROs might be apprehensive about working to embolden the CEO. They're likely to feel more comfortable playing that role in organizations where the CHRO is already considered a trusted advisor at the most senior level, according to Adler.

"There are some CHROs who are absolutely joined at the hip to the CEO and the leadership team and often very close to the Board as well," says Hemerling. "They are right there and they understand the difference between running the business and transforming the business."

As a CHRO seeks to work with the CEO to drive always-on transformation, there will be times when it becomes apparent that the chief executive's existing leadership style is just too deeply engrained. As Adler explains, "We have immunities to change," and an executive whose past successes have rested on a particular leadership style may not have the capacity to adapt to a new style of leading.

"If your style has paid off and you've been lauded as a great leader and now suddenly, you are expected to become adept and flexible and a humble, servant leader, that is a transformation in style and personality and behavior that quite honestly most people can't make effectively," says Adler. "HR needs to supply rigorous, objective, thoughtful tools to come up with a good assessment of where the gaps are in their leaders and either develop ways to close those gaps or find leaders who already have in place what the future requires." 

Ever the contrarian, John Sumser, principal analyst at HRx Analysts and editor-in-chief of HRExaminer in Bodega Bay, Calif, argues that it's not HR's job to insist that their CEOs change. Rather, he says, it's the C-suite that should be holding the CHRO's feet to the fire in this era of always-on transformation.

"Things are changing in very fundamental ways, and it's unlikely that the right way to meet changes in substance is with a change in style," says Sumser. "The problem requires clear thinking and investment, not another bout of CEO shaming done to a Kumbaya soundtrack."

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Jan 19, 2017
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