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Human Resources

People Strategies in the Age of Disruption and Transformation

  • October 2019

In today’s world of unprecedented change and complexity, traditional human resources (HR) management models have become obsolete and need to be refreshed. HR leaders must step out of their comfort zones and think differently about their approach to talent. To drive true change, HR executives must work in partnership with the full management team, and go beyond simply carrying out strategies to being part of strategy setting.

In March 2019, Egon Zehnder’s Hong Kong Office held a thoughtful and provocative roundtable discussion with CHROs, centering on “People Strategies in the Age of Disruption and Transformation.”  Attendees brought diverse perspectives and varied and impressive experiences. A summary of the trends, insights and implications we heard follows.

What’s “keeping HR leaders up at night” when it comes to digital disruption, innovation, and talent in your organizations? 

  • Leadership, capability and culture are three key areas where an HR leader’s challenges always lie.
  • Organizations need to stay competitive and develop data and insights to keep up with the quickening pace of change. Think about how to live up to the potential of the HR leader role by really helping to lead change, not just implementing policies when requests come.
  • One participant from the retail sector shared that as individual consumers, their employees are often more advanced in the use of digital technologies than the company itself. As a company leader, this CHRO “stays up” to think through how to leverage “the consumer within the employee” to drive the company to keep up and get ahead.

What role does the CHRO think the management team should play in making companies more innovative?

  • Communication is key. The management team needs to articulate the threats and opportunities ahead, and create drivers for individuals in the organization to make positive change driven by dreams (and sometimes fear).
  • Making the workforce more innovative starts at the top, and it is a team activity. The CEO and top leadership need to be bought in and aligned on the end goal. Innovating the workforce cannot be delegated and compartmentalized with the CHRO alone.
  • Management can help create a culture of innovation by making changes
  • in hardware, such as changing the layout and feel of an office setting, implementing a flexible dress code, and hiring people with different skillsets, and software, including shifting behaviors through employing policies and practices that imbue a sense of experimentation, learning and improvement.

What are best practices HR leaders are using to make companies more innovative?

  • There’s no need to shift the whole organization at once in cases where business is still doing well. To move forward smoothly in those cases, HR leaders must articulate the need for change, and form an organizational structure that will  break down silos and leverage people in a matrix. Build a system that exposes people to both old and new practices so they can see what is best and incrementally adapt.
  • Within the HR function, select the right timing and speed for change. It may not be necessary to always be the first mover; it is better to be more strategic in adopting new ideas and practices. Take the time to test, experience, implement and then learn quickly from the pros and cons.
  • Push to initiate programs that can create a real sense of ownership, as employees with an ownership mindset are likelier to tap into their creativity and be more willing to participate and make positive transformation happen. One of our participants gave the example of an optional equity buy-in program pioneered by their company which resulted in a self-selection process which helps to better identify and retain the most committed employees, as well as provide an incentive for them to innovate.

Egon Zehnder’s Take

Working in the business world with accelerating changes, HR professionals in this age have to step outside of their comfort zones and see what is evolving around them, both systematically and technologically. For example, Chinese Internet companies have caught the attention of many “traditional companies,” as they now become predecessors to adopting modern HR tools, such as AI recruitment and smart mobile office.  

However, standing at the center of transformation, HR leaders should not be alone. It is also the senior management team’s responsibilities to engage, work and collaborate with the HR leaders to upgrade the organization when it comes to culture and talent management. The goal of the changes should be well articulated and communicated so that both the senior leadership team and the workforce can together keep pace in the same direction. Open and transparent discussions can help build understanding and foster sense of ownership during the change. 

It is never too late to learn, reflect and react.

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