Initiating Innovation: Furthering The Role Of HR In Change Management
You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
This article was co-written with Kristofer Kumfert, Human Resources Manager, Ford Middle East and Africa.
A lot has changed in the space of human resources over the past several decades. Gone, in large part, are the personnel departments whose focus was solely processing of employee pay and benefits. The hard-fought battles for HR to have the coveted “seat at the table” have persuaded organizations to realize the benefits of enhanced talent selection, employee engagement, and staffing to appropriate demand levels to facilitate lean operations. But the more pressing question for HR professionals is no longer how to get a seat at the table, it is how best to use that seat at the table to be a competitive advantage for the organization beyond the traditions of staffing and talent management. To achieve this, HR needs to embrace innovative thinking that takes the skill team outside of traditional areas of “expertise,” and into areas of the business where their skills can be stretched, challenged, and impactful to the bottom line.
Creating change facilitators
In 2009, Ford Motor Company made a critical decision to invest in the direction of its HR professionals. The investment was part of the company’s organizational development model, a system of tools and processes to achieve an effective culture through individual, team, and organizational effectiveness. An internal change process was created to guide the company’s change management practices. It was about more than just helping people through change. It was about being driven by a clear business opportunity and facilitating change through to improved and sustained business results. It was anything but soft and fluffy.
Ford’s HR leadership, under the direction of Group Vice President Felicia Fields, developed a specific program for HR professionals to facilitate change management throughout the organization. With over 100 years of history, the company had experienced change initiatives with varying degrees of success, and this led to the decision that HR’s role in managing change and facilitating the company’s leadership through such initiatives would lead to a competitive advantage for the organization.
The Ford change model was designed to be simple, practical, and effective.
• The first step is facilitating the organization to identify the issue in its entirety- the issue we’re trying to solve, the business opportunity, the burning platform. This first phase involves identifying a sponsor for the change –a leader to be the owner of the initiative– and identifying critical elements like the desired state, as well as key enablers and roadblocks.
• Once the project is well defined, the next phase is to conduct data collection. Too often, change initiatives are commenced when everyone thinks they know what to do. This phase is intended to inform the team’s actions, rather than affirm them. The data drives the team to get to the root of the issues and uncover all relevant considerations before designing any solutions.
• Once the data is on the table, the next step is to make an informed series of solution alternative decisions on the way forward.
• With a solid solution design based on data and rooted in the originating business case, the team is well positioned for the final phase to implement the change.
Throughout the entire process, the process is governed by common principles that include ensuring sponsorship, communication, surfacing and overcoming resistance, and attending to the culture. It is a disciplined, purposeful, and effective process to manage change from a clear business opportunity through to effective and sustainable business results.
The mantra of problem resolution training at Ford was “go slow to go fast,” and HR professionals get a quick lesson on why that’s so important and so challenging. While the model is usually well received among operating partners with nodding heads when it is presented, the data-gathering phase often tests a team’s commitment to the process. Leaders like solutions. Solutions fix problems, so any step in between identifying a problem and implementing a solution is often uncomfortable. Strong HR professionals play a consultative role and bring their operational leaders back from “solutions” mode, and make sure that appropriate due diligence is exercised before any solutions are activated.
The results have been impactful. Staffing, development, and organizational change initiatives have all been executed with demonstrably effective and sustained results. Training programs were expanded, funded, and supported globally to increase the number of HR professionals with a core competency in change management, demonstrating a proficiency in supporting change projects throughout the organization.
An opportunity to be innovative
In early 2016, Ford’s newly formed Middle East and Africa business unit began to experience significant market headwinds. Currency devaluations, falling oil prices, import quotas, and regional instability were causing major markets to make forecast adjustments that were bleak. There was a clear need to do something and deal with the market realities upfront and aggressively. The initial response by the leadership was to come together with a list of action recommendations, and then decide on next steps. The discomfort of the problem was there, and everyone wanted to feel at ease with a series of solutions.
The theme quickly moved to an all-too familiar place surrounded by questions regarding the best possible cost-effective practices. All were well intentioned, and all were tried and done before.
The HR department in Middle East and Africa was at the table with the leadership team, and identified an opportunity to provide a different approach. Amongst themselves, the local HR group discussed the key message that Ford’s CEO Mark Fields delivers about being innovative, questioning traditional actions, and taking thoughtful risks. That is, when we see an area that is in need of help, we need to find ways to come together and provide whatever support we can to resolve the issue; we shouldn’t just settle for actions we’ve traditionally done because that’s a comfortable space. The opportunity of mounting market pressures was calling on the team to be innovative in the role they played to contribute to the business’ ability to navigate through tough conditions.
Scarcity leads to creativity
When organizations face challenging business environments, HR has some frequent levers to pull– like staffing, benefits, and training and development. These are traditional approaches most organizations look at in a tough business environment. The challenge in Middle East and Africa was that the lean organization structure left little room for the usual solutions to be activated. The scarcity of opportunity to take actions on staffing and cut costs meant HR had to embrace a spirit of innovation in order to help drive the business forward. As the HR Director for Middle East and Africa, Anton Van Der Walt was the HR person at the table, and was determined to push his HR team to think different. “I remember telling my team that our budget was nowhere near being significant enough to trim and cut and make a sizeable difference, so we had to do something else.” said Van Der Walt.
“I kept reminding them about our need to be innovative, and work outside our usual comfortable areas. The business needs us, and we have to find a way to use our skills in new and creative ways.” The local HR team in Dubai, together with operational leadership throughout Middle East and Africa, met and discussed using the change process to purposefully guide the team through identifying, understanding, and researching the issues that could be considered to contribute to improving the company’s performance in light of the business environment challenges. This was a departure from the usual change management projects HR undertook that always had a main theme about a peoplebased issue to be solved. This was different. The team embraced the innovative mindset to challenge custom and question tradition.
After a thorough definition of the business opportunity, the HR team facilitated brainstorming sessions with the broader leadership team to uncover revenue and cost opportunities, as well as new business actions to leverage untapped business streams. The team originally came into the sessions expecting the same focus on cost-efficiency with which they had become accustomed over the years, but this was different. Because the business opportunity was so well defined as being overall performance and not just cost-focused, the scope was broadened to include revenue and new business. With the brainstorming resulting in over 150 ideas, a core team met and plotted the ideas against ease of implementation and expected impact to the business unit’s performance.
The result was staggering. Through HR-facilitated sessions in Dubai and South Africa, the leadership team was able to identify, action, and deliver significant cost enhancements that positively impacted the business unit’s performance by millions of dollars. Moreover, everyone could feel the excitement. Taking a systematic approach to the business environment empowered people to feel that they were taking control of their destiny. According to Middle East and Africa CFO Mike Agosta: “Without HR, we never would have met as a team and followed such a process. We would have spent our time on the usual cost-related ideas with the usual results.” The team walked away stronger, smarter, and closer in large part, because they were guided by their HR partners through the change with a solid change framework.
Further evidence of the impact of the HR change activities was seen in the demand it created. Business leaders did not know that HR change management could be applied to the business in such a manner, and demand for HR’s involvement in business initiatives to facilitate and guide operational groups has grown significantly.
It was a perfect example of creating demand by showing the customer something they didn’t even know they wanted from HR.
The toughest mindset change for the HR team in Middle East and Africa was to challenge their limitations on what kind of change their framework could address. Were they limited to changes of people processes? Were they limited to changes of the financial impact of people? Were they limited at all? The team decided that this was their opportunity to embrace the innovative mindset to sustain the business. After all, facilitating a room full of business leaders and bringing them back from jumping to solutions and guiding them through brainstorming and data diagnosis is not where HR professionals spend a lot of their time. But the need was evident, and the team seized upon the opportunity to expand the idea of change to include any aspect of the business in need of facilitated and purposeful improvement activity.
The human resources profession has come a long way over the years. Countless professionals have tirelessly worked to earn a seat at the table. Now that they’re there, the next evolution for HR leaders is to best make use of that seat, and leverage HR as a competitive advantage. As the change management process at Ford, and its expanded usage as a tool to improve the business demonstrate, there are ways for HR teams to engage with and facilitate leadership throughout the organization in ways beyond traditional people processes. Human resources professionals engage with every department and skill team, and are uniquely qualified to have among the most broadened viewpoints. Traditionally, matters outside of staffing, benefits, and other people-related issues were considered the responsibility of “operations,” and HR people were free to disengage. Those days are over.
HR’s seat at the table brings more than the right to a voice at the debate. It brings the duty to be part of the solution. It brings the obligation to apply tools and competencies in innovative ways. It brings the responsibility to embrace the innovation mindset and challenge the custom and tradition. In doing so, being innovative delivers a fantastic rewarding feeling, and incredible results.