“The majority of Transformation Processes in HR fail to meet the expectations”: What’s next?

In research done by the Corporate Executive Board Company (2012), it came out that more than 80 % of the HR functions is attempting to improve both the effectiveness and the efficiency by undergoing or planning a HR transformation process. The basic idea is that “HR must create and deliver value in real business terms”. However, only 19 % of the transformations seem to be effective in terms of supporting revenue growth ambitions. So there is clearly something missing in the transformation projects. The persistence of these findings calls for change that is not ‘more of the same’ or variants of standardized recipes. It requires deep change in thinking where new ideas and new repertoire are actively sought and change processes are made to measure for each unique case.

Tough issues

As a change agent I have become interested in complex issues that seem resistant to change efforts. I have observed that the complexity and persistence of such issues creates a longing for ‘best practice’ to be discovered somewhere and to be rolled out everywhere else. I have come to realize that such preset plans are part of the problem as they do little justice to the unique complexity of each case. The complexity, especially in HR is multifaceted: not only is their content ambiguous and multidimensional, but requiring the involvement of many actors with different interests, viewpoints and affiliations. This realization is at odds with the popular literature on HR that is willing to supply standardized models that promise universal success. Employee engagement is such a popular theme that has been given a lot of attention in the last five years. The basic credo is “a satisfied employee and client is the best business strategy of all”. Most books and cases on this issue provide a blue-print that comes out of an engineering mindset: a stepwise plan created by a few affecting the many. The reduction of complexity already begins with the plan that isolates the meaningful categories to consider: engagement enablers and engagement levels (such as engaged, not engaged, and actively disengaged). We seem to forget that the employee experience might be much broader than what we consider, and e.g. include the emotional experience of employees (which we do not measure). Action plans typically follow a linear, episodic and goal oriented logic. Typically, a few experts design the change after which others – lower in the organization – take care of the implementation. A good plan is one that can be copied throughout the organization. For this the plan needs to be uniform and refrain from too much complexity in its design. Although we know that such typical plans do little good when dealing with complex issues where outcomes cannot be predefined, we keep on inventing them, even when we know that implementation needs to be an ongoing iterative process to figure out things along the way.

Deep change and deep thinking

One of the common characteristics in facilitating change is that the classic linear approach requires a clear and agreed upon definition of the change issues and change outcomes beforehand. Such definitions invariably give rise to heated debates that stall any action to be taken. A pragmatic solution to limit such debates is to restrict access to those people who are in a position of considerable power. However, once these key players have agreed on a definition they are reticent to revisit it. This brings with it the risk of reductionism where arbitrary aspects of a tough issue are singled out at the expense of others. It is a way to simplify complex issues by splitting then up in neat packages that can be fixed individually. This process obscures the multifaceted and systemic nature of tough issues and stands in a way of exploring new understanding and new interventions that such issues require. People who are excluded in defining the issue are bound to point out what has been mistakenly overlooked. And sometimes studies are commissioned to assist a better and broader understanding of the issue, but it runs into problems as further study reduces possible definitions.

I can go on with further descriptions of how change processes fail. Although numerous books have been written on Human Resources, the things that appear to be deeply frozen and unchanged are our collective ways of thought and the actions that they produce and reproduce in our organizations.

Otto Scharmer (2013) argues in his latest book that we need to shift the inner place from which we operate. By this he means two things. The first one is that we need to shift from an ego-system awareness that cares about the well-being of oneself to an eco-system awareness that cares about the well-being of all, including oneself. When operating with ego-system awareness, we are driven by the concerns and intentions of our small ego self. When operating with eco-system awareness, we are driven by the concerns and intentions of the whole. The latter requires a level of systemic thinking that is not thought in our current educational system. Otto Laske (2009) makes a similar distinction and argues that at the one side we need to shift to a higher level of social-emotional awareness, and at the other side we need to shift from linear thinking to dialectical thinking. The latter is deep thinking from multiple contexts, multiple emerging changes, multiple relationships and multiple possibilities of constructing the world in different ways.

Otto Scharmer’s second message, when he talks about shifting the inner place from which we operate, is that we can reconsider the process by which we respond to issues. He developed a process that helps us to suspend our judgments, redirect our attention, let go of the past, lean into the future that wants to emerge through us, and let it come. This is about ‘slow thinking’, because taking the time to get it right on issues that matter will be much more rewarding than jumping quickly into action without meaning. Unfortunately, this feels contrary to what we are used to do: solving issues by acting quickly.

The ability to shift from reacting against the past to learning into and presencing an emerging future is probably the single most important leadership capacity today. It is a capacity that is critical in reinventing our future and creating real deep change. Unfortunately, developing deep thinking capabilities is absent in most leadership development initiatives.

What’s next in HR? Mastering complexity and designing complexity.

Over the last two months, I had many talks with HR directors. I shared some research findings that top executives in ‘sustainable growth companies’ mastered complexity from a higher level of whole systems thinking, compared with ‘low growth companies’. It seems as if, rephrasing Einstein, that sustainable companies do not solve problems with the same kind of thinking that others take for granted. Thinking creates the world. If we want to have a significant impact on business, HR has a choice to start updating the thinking that underlies the business thinking. This can be done by reconsidering leadership development, collaboration and culture building processes. But it can also update the essence of HR logic and thought.

Essentially, HR will need to revisit the competency logic and toolset which dominates their practice. We have a choice to redesign these systems and integrate insights from complexity practice into their approaches. HR will also need to revisit the performance logic with a focus on SMART objectives and find out ways through which the relationship between indicators of different roles can reinforce one another. HR will reinvent the ‘employee satisfaction’ logic and start to focus on the whole ‘employee experience’. HR has a choice to reconsider how it facilitates change processes, taking into account the fundamental shift necessary from an ego-systems to an eco-systems approach. The common ground in all what HR will do in the next years, in order to remain relevant, is shifting from perfecting what is already there, using rules and procedures to deal with well-understood issues without questioning mental frames. The future lies in exploring unknown terrain, gathering new insights and broadening one’s repertoire, driven by alertness to development/creation, dealing with intrinsic contradictions and dealing with contrasting rationalities.

Connect & Transform has developed a “Thinking Differently to Create Breakthroughs” workshop based on the above insights. More information is available on request (jan@connecttransform.be).