Delivering Business Change in a New World

Delivering Business Change
in a New World
Published by Henley Business School
In association with Green Park | April 2012

Published by Henley Business School
in a New World
Executive Summary
from Raj Tulsiani,
Green Park Interim & Executive Search
In an economic sense, it really is a ‘new world’; the
pressures and challenges of a floundering global
economy have forced organisations and individuals
to change. Looking back to the years and decades
before the recession, it seems clear that the vast
majority of the organisational problems we are
experiencing now were always there, but hidden
by the strength of consumer demand and the
ready availability of finance. When that came to a
sharp halt in 2008, organisational and individual
failings became simultaneously more obvious and
more pernicious. The impact on the economy was
unexpected, devastating and wide reaching.
So, where to next?
Our new world demands a new set of skills, a
new way of approaching challenges, and a new
appreciation of the so called ‘big picture’. But while
we’re thinking of the big picture, we’ll increasingly be
under the microscope. All functions are expected to
contribute to the recovery, and HR has the challenge
– and opportunity – of leading the way. The HR
‘renaissance’ of the last 20-30 years has, to a large
extent, been model-driven. Best practice has been
defined by well-publicised ways of doing things and
the widespread application of accepted functional
norms that span sectors and industries. Now, there
is the potential that over-reliance on those popular
models will impair our ability to show the flexibility,
adaptability and entrepreneurialism required in a
more exacting environment.
Together, the HR profession needs to re-examine
practices and models in the new economic context.
There is a clear need for pragmatism, and a move
away from ‘straight line’ ways of thinking and working
that are often ingrained in the way we do things.
The function needs to ascend to the strategic engine
room, offering ‘organisation-level’ solutions, rather
than piecemeal strategies. However, at the same
time as broadening our focus, we need to narrow
and refine our measurement paradigm to ensure
that we are more regularly and effectively analysing
– and promoting – the impact and effectiveness of
everything we do. Of course, many principles remain
valid and applicable: getting the vital basics right
is the crucial foundation to HR effectiveness, and
will set the platform for the function to move away
from a process focus, concentrating on outcome-
driven thinking.
Our world changed so fast, and moved so far, that
it’s hard to plan for the future. In the coming weeks,
months and years, the new skills we’ll need to
acquire and deploy will have a ‘macro’ focus. We’ll
need to demonstrate judgement, guiding our own
activities with no one telling us what to do. We’ll
need to tolerate – and even embrace – ambiguity
and constant change, since the economy is no
longer running in a straight line. We’ll need to be
flexible and adaptable to internal and external
drivers alike, as they manifest themselves with
increased frequency. Finally, we will need to build
our functions, and their everyday actions, around
‘pragmatic commercialism’, where best practice is an
ever-shifting, ever-evolving ambition.
It’s not just our greatest challenge, but also our most
compelling opportunity to proactively engage and
deliver at a strategic level.
2 Published by Henley Business School

in a New World
in a New World
Nick Kemsley, Co-Director of the Henley Business School
Centre for HR Excellence
The new economic climate is exposing fundamental
gaps in the capability of individuals and functions,
in both skillsets and approach, and also in structure
and process. This is especially true for functions like
HR, but also increasingly relevant to other divisions
such as Finance, Change Management, and Risk &
Compliance. These capability gaps are by no means
‘new to science’. However, with the change in the
global economic landscape, they are suddenly centre-
stage, ultimately critical to converting value. That
new pressure means that individuals – and functions
– are finding it difficult to bend the resources and
capabilities they have to meet this need in the
exacting timescales required. As well as offering a
view on what these ‘leverage capabilities’ might be,
this paper will also suggest that, where there is an
over-industrialisation of popular models relating to
‘functional value delivery’, our ability to develop and
apply these skills can be hindered. Finding a way
of ‘flexing to fit’, without losing what we have built
along the way will challenge us to fundamentally re-
examine some established practices.
Some of the comments in the opening paragraph
are strong statements, and require both context and
justification. Some of that justification comes from
my own background and experiences, having spent
much of the last two decades working to develop
the capability of organisations and the individuals
within them. Over my career I have worked across six
distinct sectors and have direct experience working
with and within supply, demand and business
support functions along the way. To add to that,
I have spent the last ten years running Organisational
Development, Effectiveness or Capability functions
within large global businesses. Having left corporate
life proper in 2010, I have spent the time since
working alongside a large number of businesses
as they try to come to terms with what they need
to do organisationally to put the wheels on the
strategy, whilst staying productive and profitable at
the same time.
My second lens comes through my work at Henley
Business School, where my friend and fellow director
Nick Holley and I run the Centre for HR Excellence.
This platform allows me a research and evidence-
based assessment of the economic environment
in relation to HR, in addition to the opportunity to
work with HR functions and individuals in scores of
organisations all over the world.
Lastly, my experience talking to and collaborating
with ‘on the ground’ executive search and services
business such as Green Park has helped bring to
light intelligence from a wide network of businesses
and senior leaders within HR and the wider
leadership group.
Through these three channels, I found that there
were several very strongly recurring themes that were
not limited by sector or geography. The more we
explored it, the more this view was reinforced through
research, through the work we were asked to do, and
through on-going engagement with the people who
were dealing with the evolving situation on a day to
day basis. Although this view first felt relevant to
the HR space, it has developed relevance over time
to other functions and to development and career-
pathing as we have explored it further.

in a New World
So, what changed to suddenly
create this need?
The answer to this lies in the extreme forces that
came to bear on the world’s economy in 2008. It’s
fair to say that nobody expected things to happen
so fast, or be quite so drastic. I recall talking to
the European General Manager of a well-known car
manufacturer at the time. Over a period of just six
weeks in early 2009, their dealerships went from
selling forty cars a month to having completely empty
showrooms where no one was even visiting, let alone
buying. When businesses are faced with a situation
that changes as quickly and as dangerously as this,
they naturally turn to their front line and support
functions with some pretty steep requests relating
more to survival than incremental improvement.
These pressures and challenges, although they were
extreme, were not new in themselves. What was
new was the way in which they were presented to
functions like HR. They were not presented as nice
clean questions which had nice, neat, black and
white answers. Due to their sudden urgency, they
were presented as a series of paradoxes or dilemmas,
issues for which there was no luxury of time and
space to think them through in detail or implement
them carefully and deliberately. Grey had become the
new black. Almost overnight, businesses were facing
enterprise-level organisational dilemmas such as:
• ‘We must massively cut costs to survive in the
present, but also develop ourselves for the future.’
• ‘We must implement big changes to our organisation,
but we need benefits in 3 months, not 2 years.’
• ‘We need people to quickly adapt to work in leaner,
more flexible and more matrixed structures when
they have been brought up to work very differently
through their careers and in our cultures.’
• ‘We need to find a better way for the centre and
outside of our organisations to work together around
more flexible governance models, recognising that
too much of one or the other won’t work.’
So, there we all sat in our functions, having spent
the last few years getting to the position where we
felt we were adding value. Suddenly, the meaning of
‘value’ changed. Now it felt much more urgent, more
financially-driven, more knee-jerk, more unforgiving of
failure, and less tolerant of anything which looked like
it was around the corner rather than lying at our feet.
What does this mean and why does
it give us a problem?
To understand this, you need to look at some of
the things which were driving the structure and
capability of functions like HR up to this point. Here
was a function moving from ‘Personnel’ to ‘Strategic
Partner’ spurred on by the Ulrich Model, from a ‘one
size fits all’ structure to a ‘3 Box’ structure through a
distinct separation of business-facing HR, Centres of
Expertise and Shared Services Administration etc.
Now don’t get me wrong, these role/structure/
approach models were not wrong in themselves:
in fact they have been pivotal in getting support
functions like HR to find effective ways to work with
business, and in creating credibility and driving
value. Without their provocation, functions like HR
would have found it close to impossible to survive
wholesale outsourcing and to do what it needed to do
with the resources it had. However, the way in which
we have implemented these models, and the way
in which we have ‘concreted them in’ subsequently
has, when presented with the need for a sudden shift
in how we operate, presented us with some issues
which we couldn’t really have planned for. We are
now faced with dealing with them.
Business
Partners
Centres of
Expertise
Shared
Services

in a New World
For instance, Henley’s research shows that one of
the issues being experienced in the current climate
is that the lines between Business Partner, Centre
of Expertise and Shared Service have blurred in
the way in which business expects to interact with
HR. In ever-leaner structures, Business Partners
are expected to be local points of contact for talent,
performance and recruitment processes designed
in the centre but locally-activated; and Shared
Service solutions are sometimes finding it hard to
embed since managers are clinging to their trusted
local HR Partner/Manager relationship as their only
face-to-face HR contact. At the same time, a move
to more ‘federated’ business operating models is
requiring a new kind of principle-based relationship
between Centres of Expertise and local business unit
HR where market needs must be traded off against
enterprise needs in a flexible way, which can’t be
reflected in job descriptions. Business is asking more
and more for support in the area of productivity and
efficiency improvement in addition to the current
offer of short-term operational and longer-term
developmental solutions. Along with this is coming
an impatience with anything which is not instantly
recognisable as commercially-relevant and with
any imperfections in what business would call the
basics of HR – the hire, fire, pay, train and keep legal
elements.
For functions like HR, Henley’s research and
experience has found that this sudden shift in the
wind has translated into four generic capability
challenges which we have gone on to validate
through further research and work with HR functions
around the world:
1. A need to offer organisational-level solutions –
managing horizontally and in an integrated way
across the vertical process areas such as talent,
resourcing, reward, LD, as examples, to create
the ‘Organisational Strategies’ which will put the
wheels on the wider business strategy.
2. More relevant activity with shorter, more
measureable ROIs – needing to demonstrate the
connection with that month’s Board agenda in the
context of what’s needed for the future. Trading
short-term need against longer-term desires,
being much more prioritised and commercial in a
strategic context, and moving into the productivity
and data insight space.
3. Getting the ‘Vital Basics’ right – mending holes
below the waterline on the engine-room processes
before talking about strategic partnership and
future investment in capability, making what
we have work rather than continually asking for
more money to ‘embed’ things like talent and
performance management, which the business
considers a staple that should have been working
properly years ago.
4. A much more pragmatic approach – an end to
‘process-polishing’ and engaging more with being
‘good enough at the fewest, most important
things’, from ‘gold-plating’ to ‘80/20 percentage
plays’ and ‘quick and acceptably dirty’.
Flexibility with process and policy design and
implementation and the ability to work better with
ambiguity and shades of grey. Better balancing
the complexity of solutions to the risk or outcome
they are trying to manage and a move to outcome
rather than process measures.
Future / Strategic
Day to day / Operational
Process People
Strategic
Partner
Admin
Expert
Change
Agent
Employee
Champion
The Ulrich HR Model

in a New World
When you look at these four challenges, there are
some implied capabilities to progressing in this
environment. At Henley, we have boiled these down
to the following four core capabilities, surrounded
by some other important ones. The wake-up call is
that they are not necessarily technical, and they are
not things which can be fixed by sending people on a
one-day course. The four are:
1. Judgement – to manage paradox we have to work
out what to do when nobody is telling us what to
do. Having a more system-thinking perspective
to drive our context. We need to make decisions
when we do not have all the data we would like to
have, trade off conflicting needs and do it as close
to source as possible.
2. Tolerance of ambiguity – we need to be
comfortable working with shades of grey and an
absence of certainty, to engage with macro data
and to act when needed, not when convenient.
3. Flexibility – we need to balance governance with
necessary uniqueness, consider exceptions in a
more directional way and understand and resolve
conflicting points of view from the standpoint of
the business rather than our own role.
4. Pragmatic commercialism – being less
perfectionistic, always using an impact-versus-
effort mindset, managing risk where risk needs
to be managed most, and being comfortable that
achieving and evidencing a reasonable result
quickly may be better than driving for a perfect
result that never happens.
And this is where some of the flip side of the work we
have done up to this point kicks in. The way in which
we have sometimes implemented the structural
models referred to earlier has meant that these
capabilities are often in short supply and hard to
find quickly, and that we can find it hard to react to
some of the challenges outlined above. Even the use
of external contingent leadership cannot always deal
with the internal adaptation required.
How might this cause problems in
an organisation?
Take the Ulrich Model, for example. Despite the
model implying that contribution in the strategy and
change space must sit upon a foundation of the
basics of administrative excellence and good old-
fashioned employee-centric HR, the fact is that in
many HR functions (and other enabling functions),
this headlong rush to what they perceive as higher
value offerings has resulted in some cases in us
taking our eye of the basics, or in extreme examples,
letting them fall into disrepair. In the career market,
these basic offers are often seen as un-sexy and
there is a trend for everyone to see themselves as a
‘partner’ working at the very core of ‘strategic value
creation’. The fact is that not much of the work
in HR is truly strategic – the function comprises a
number of operational processes, policies, pieces of
paper, meetings and conversations. However, these
need to be strategically-aligned. Now that we need
to re-focus on these areas we can find it hard to
find people who have the expertise and aspiration to
do so. In the current climate, it is only when these
hygiene factors are working consistently well that
business is willing to open up to a more proactive
partnership for the future.
Ironically, where we have roles which are truly
working in the strategic space, either facilitating
business strategy creation or translating this to
organisational strategies, we often find it hard to
match the role with an individual with the capability
to carry it off for the money we want to spend to
get them. Ask any recruitment agency, and they
will happily tell you how hard it is to attract top HR
people who meet these high level criteria for the
pay-points proposed. Equally, we are not developing
them easily from within our own organisation, since
this requires a level of perspective, judgement,
pragmatism and genuine commerciality which is
not being well-supported by an approach to career
development which is often siloed and inward-facing.
This creates an imbalance between company and
individual. In a recent piece of research Henley
found that business’ number one development

in a New World
‘want’ for HR people was a broad career base which
included experience outside of HR. And yet, the
same research showed that of all the development
options available, bringing people in from outside HR
or sending them on assignments outside of HR was
the least used of all of them. Sure, there are some
reasons why this might be hard to do currently (such
as needing to keep what functional expertise we
have where it is in the current climate) but we didn’t
do it when we could have done it, therefore giving
ourselves an issue now since those people we are
asking to manage the paradoxes which the past 3 or
4 years have dished up are struggling to bring to bear
the right skills to drive value in this climate.
Take the productivity challenge. Through the
implementation of Ulrich and the 3 Box Model,
we have often created ‘camps’ in HR, notably an
‘operational’ one working on a 0-3 month time
horizon, and a ‘developmental’ one operating on a
18-36 month timeline. We have developed people
behind these camps to the point where we refer to
them as ‘specialists’ or ‘generalists’. Productivity
falls neatly between these two chairs since it requires
elements of both, and a blended skillset to be able to
trade them off in the middle. It requires strong data
skills, but at the same time a capability to work at
‘system’ level with cause and effect. It asks people to
be ‘tact-egic’, balancing what needs to be achieved
to support quarter-end EBITDA with the capability
needs of the organisation two years out. Many
organisations are struggling to bend their structural
and skills model to address the business needs in
this space.
Resource planning is another victim. Our businesses
want us to be more on the front foot in terms of
creating a ready supply of the skills we need to be
successful into the future at an affordable cost, yet
we find it really difficult to do this well. Our love of
certainty can see us waiting for our business to tell
us exactly how many of which people it needs, and
when and where it needs them, rather than working
with the ambiguity and macro level data and making
judgements about where to place our bets in time
to do something about it. Not doing this means that
we are forced to use more training and last-minute
external recruitment. External recruitment will always
be an important part of the game, but the more we
are able to be in control of it and steer it to deliver
the right things for our business, the better the return
on our money will be.
Talent and performance management is another
area where we see issues. As our businesses move
away from being either global or local, to a more
balanced operating model which requires more
pragmatic governance and working with freedom
within multiple frameworks, this throws a curve ball
into the relationship between local HR and Centres
of Expertise/Group functions and ultimately customer
relationships. No longer can we say ‘that’s your
responsibility’ or ‘you have to do it like this’. Now
there is the realisation that they have to work with
shades of grey in interpreting global and local needs,
creating flexible approaches where benefit flows
both ways, and applying pragmatic implementation
approaches which maximise revenues and
efficiencies. Yet our people have often been
brought up in a world of black and white, or have a
transactional comfort zone, meaning that working in
this way is unnatural.
I could go on, but if you think about it, these
four capabilities are at the heart (in one way or
another) of so many of the things we talk about as
being current or future issues in HR. In fact they
can potentially relate to other business support or
partnership roles. I have found myself dealing with
similar issues in Finance, in Risk functions and in
Programme Management Offices.

in a New World
How does this inform
capability models?
But it isn’t all about these things. These ‘big four’
sit on a foundation of needs which we will already
recognise – commercial, political and technical skills,
and capabilities specific to sector or industry context
– like the cap on a pyramid. I like to call these
‘Leverage Capabilities’ – ones which determine the
degree to which other key capabilities are translated
into value in the context of an organisation.
For HR, for example, Henley has worked with Green
Park to translate the cap of the pyramid capabilities
into a ‘checklist’ for functions and individuals which
creates a framework to assess any gaps and their
importance to that HR function’s role and ability to
influence in their specific organisation. These are
represented in the two tables below which, along with
other tools and approaches, help support functions
such as HR engage with their ability to adapt to the
challenges being thrown at them.
Industry-specific
capabilities
Functional - Technical
capabilities
Leverage
capabilities
HR Capability - functional
Structure makes sense to business
The basics work and are cost-effective
Processes are minimum to get the job done
Operating a pragmatic governance model –
flexible, balancing central local needs
Working with data earlier and better to create
intelligence for the business
Measuring impact more than process
Piloting or implementing in key benefit areas
Looking at the organisation in an holistic ‘system’
not vertical process way
Immediate and visible connection to long and
short term needs of business – being tactical in a
strategic context
Providing opportunities for people to develop
commerciality and perspective
HR Capability – individuals
Can work with uncertainty
Can use judgement, not wait for answer
Can create flexible solutions of minimum
complexity to get the job done
Can work co-operatively in areas of grey
Can balance local and global needs to come up
with balanced solutions
Are confident with data analysis and presenting
statistically valid evidence
Have a level of perspective across business
Have commercial acumen - understands the
business and sector economic models
Can navigate the politics and create the
credibility to be listened to
Can communicate effectively powerfully
Know their staff and can interpret expertise to
the context of a given situation

in a New World
So what?
What is being proposed here is not a re-invention
of the capability frameworks organisations are
currently using to develop people in HR and other
enabling functions, nor is it proposing a wholesale
re-structuring of functions. What it is saying is the
following:
1. Consider these ‘Leverage Capabilities’ alongside
what you currently do and think about whether
they might represent ‘the difference that makes
the difference’ in translating the systems,
processes and skills which you already have
into the value that business is looking for in the
current climate. Where are the gaps and how
important do you think they are in the context of
your business?
2. Explore how these translate to the structure,
systems, processes, skills and behaviours which
currently exist and understand how they might
need to be tweaked or better exploited to close
these gaps. This might mean some work on
process simplification, ways of working between
different functional groups, changes to career
development or recruitment approaches, evolving
the approach to data insight and measurement,
structural tweaks or combinations of some or all of
these things.
3. Apply the philosophy of the four challenges listed
to what you find. How can you close 80% of the
gap with 20% of the effort? How can you make
changes only where they matter most instead of
everywhere? How can you design solutions which
are simple, pragmatic and flexible - using internal
and external resources to maximise sustainable
benefits?
4. Consider the degree to which these leverage
capabilities are relevant across different functions,
so as to allow economies of scale and a common
language around providing value in a new
economic landscape.
If would like to find out more about any of the points raised in this paper or would like to join the Green Park HR
Leadership Community or explore and utilise this framework of assessment in your business, please contact:
Raj Tulsiani, CEO
E. businesschange@green-park.co.uk
T. 0207 399 4300
Jo Sweetland, Partner - Head of HR Practice
E. businesschange@green-park.co.uk
www.green-park.co.uk
If you would like to find out more about the work of the Centre for HR Excellence at Henley,
please contact nick.kemsley@henley.com

Delivering Business Change in a New World

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