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Human Resources

“Transformation” Transformed

What CHROs need to know to lead real change

  • April 2019

As companies harness technology and data to transform into more agile organizations, they must also transform their cultures to support this operating shift. It is nearly impossible to engage in any type of corporate transformation without taking culture into account. Much of the heavy lift in this culture shift rests on the shoulders of the Chief Human Resources Officer (CHRO). The CHRO is the custodian of culture and they must embrace the changes happening across industries and prepare for growth and new processes. To find out how today’s CHROs are tackling large scale culture change, Egon Zehnder’s Dubai office gathered a number of Chief Human Resource Officers from major global and regional companies for a candid discussion on the evolving role of the CHRO in a fast-changing world and workplace. What follows are some of the key learnings.

Transforming Transformation

Transformation is the word of the day. Yet many CHROs are fatigued by the term, which is used too liberally, and often carries a negative connotation for employees, causing them to feel uncomfortable and anxious about the changes ahead. Instead, CHROs are embracing the concept of a “growth mindset,” as business today requires operating in a state of constant flux. This necessitates a workforce that is able to adapt and adjust, and to keep employees engaged, requires leaders who can communicate why the change is happening as well as how it will happen and impact the organization and what the process and end result will look like. To enable this growth mindset, the CHRO must find and retain adaptable talent, create a corporate culture that encourages growth and development, and enable an environment for honest feedback.

Increasingly, at Egon Zehnder, we are finding that culture analytics are the key to corporate transformation. CHROs can use culture data to identify the behavioral aspects of the organization’s culture and incentivize and encourage leaders who are aligned with these aspects and who are driving and promoting positive, measureable improvements. These metrics allow organizations to measure how its shared values and beliefs are reflected in company procedures, decisions, and individual and team behaviors.

Building Trust and Transparency

Trust is the key ingredient in building a strong corporate culture. It enables teams to take risks, to innovate, to be agile, and to grow. The CHRO needs to ensure trust is embedded into the core of the organization and resonates in employee behavior internally and externally.

How, then, to foster trust? Several CHROs noted that transparency is the path to trust. Ensuring that employees have insight into the goals, strategy, and decision-making processes in the organization are the building blocks of a transparent organization. It is also essential that there is transparency in how performance is measured and rewarded — especially when leaders achieve the desired business results but their behavior is problematic. This means leaders must shift from simply performance management to leadership management, holding leaders throughout the organization accountable for behavior and looking beyond just the business outcome.

Cracking the Code on Feedback

When you have a culture of transparency and trust, it enhances your ability to give and receive feedback. Feedback is all too often seen as a criticism instead of a means to boost development. Many managers end up sugarcoating feedback or trying to offer explanations for undesired behaviors, or quite often, outsourcing feedback delivery to HR. Feedback is difficult, yet it remains critical to hold leaders accountable to give effective developmental feedback to their team.

One example of how to generate a feedback-centric culture is using inclusive and candid management assessments. We worked with a company where the CEO insisted that he take part and be included in the management assessment of the senior leadership team. He encouraged the team to be candid and open about their feedback on his performance as CEO. This set the tone that every person in the organization was expected to be honest with each other and to find ways to grow together as individuals from suggestions for improvement. It also allowed employees to feel more relaxed about the process of receiving feedback, seeing it as a mechanism to move the organization from where it is today to where the organization wants to be. It helped further when the CEO openly shared his learning from this exercise with his leadership team.

Investing in a Culture of Learning

Trust, transparency, and effective feedback are the major components that define an organization’s culture. CHROs can enable a strong corporate culture by working with the board and CEO to make the shift from performance management to leadership management. The CHRO can lead this type of shift and inspire leaders to focus more on the long-term impact of behaviors on culture and how these behaviors contribute to a growth mind set internally.

In order to inspire the growth mind set within the organization, the CHRO must also invest in his or her own personal transformation through continuous development. CHROs must assess their own ambitions, passions, and purposes — and how others view them and the impact they create – to be able to inspire and incentivize that same behavior in employees across the organizations.
As the CHRO works to drive change and foster a culture of trust and continuous feedback, he or she is transforming the organization into an enterprise that is prepared to work through complexity, harness creativity, and adapt to change.

Special thanks to Dalia Elmogazi, Egon Zehnder’s Consumer Practice Group research analyst in the Middle East and North Africa for her contribution to this article.

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