Consulting to Change and Sharing in Success: Lessons from the IES HR Directors' Retreat
15 May 2015
'Stability, unity, decency.'
Which organisation has that as its motto? No, not the Institute for Employment Studies, even though we have been around now for almost 50 years. It's the Liberal Democrats, with origins dating back to the Liberal Party's foundation in 1859, but now almost obliterated as a parliamentary force by last Friday’s remarkable General Election results which saw them lose 85 per cent of their seats. Talk about a retreat.
A bit of radical change and indecency might have done them good, the cynics will smirk, as the Lib Dems bore the brunt of the electorate's anger at five years of Coalition-imposed austerity and cuts. In fact, nominations for gracious-in-defeat Nick Clegg's replacement as leader now need just 0.8 of an MP to achieve the required minimum level of support of at least 10 per cent of the parliamentary party.
And yet I always thought that if I was a little bit more entrepreneurial I might have had great success establishing an HR consultancy specialising in stability management, if only to differentiate myself from the myriad of change management advisers out there. Certainly it would be popular with employees, if not their change-addicted leaders. Engagement survey after survey that I conduct or read reveals employees feeling buffeted by too much, too fast change, which they haven't been involved in, and serves simply to increase their workload and stress.
Take the first ever UK Judicial Attitude Survey I have been reading this week, which found that 72 per cent of our 2,000 judges believe that too much change has been imposed on them by the government in recent years. Reductions in support staff and fiscal constraints experienced by more than three-quarters mean that 85 per cent have experienced worsened working conditions and feel worse off, and an equally remarkable 97 per cent don't feel valued by the government.
Behavioural Change at Work was the theme of IES's annual HR Directors' Retreat held at Hendon Hall late last month. We heard some fantastic examples of HR successfully facilitating major organisational changes, notably Change Manager Hendrika Santer Bream describing the impressive values-driven mass participation exercise at Guys & St Thomas's NHS Foundation Trust; and Ruth Owen, now Director General at HM Revenue and Customs, describing how under her leadership Jobcentre Plus achieved a remarkably swift increase in service capacity as unemployment shot up in the wake of the financial crash in 2008.
Yet the overwhelming impression you came away from the Retreat with was how hard change is to achieve and deal with, not at the organisational level of redrawing lines on structure charts, or reducing the financial numbers on a budget spreadsheet, or even the tsunami-like shift in the makeup of the House of Commons last Thursday/Friday. No, I mean at the level of the individual, you and me, understanding, accepting and supporting the changes our organisations are making, what director of Petros, Jo Clarke, called 'the pain of behavioural change' at Hendon Hall. Go on, admit it, even you felt sorry for Nick Clegg as he announced his resignation.
But without that personal change in mindset and behaviour by everyone affected, that buy-in, then our organisational changes are doomed to failure. Or as the Senior Salaries Review Body noted of the judicial survey, the resulting low morale risks defeating the service improvements and cost savings that the changes were designed to deliver in the first place.
And unfortunately that's still happening to too many of our major organisational restructurings across public and private sectors. Professor Richard Whittington's research for the CIPD found that the rate of change in organisations had more than doubled over the last decade, and yet even on self-report assessments, the majority failed to deliver the desired results, were late and ran over-budget. It is a hamster-wheel pattern in which a small number of managers impose changes, which are rapidly perceived to have failed, and so another change follows in response, with an equally or perhaps even lower chance of success.
Whittington nicely captured what a century of research on restructuring has taught is in his 'seven C's' of successful change: requirements for crafting a change plan and pathway; choosing and skilling a capable leadership team, co-ordinating changes across the organisation and capturing learning from your experiences; supporting and training staff to cope with the changes; and most importantly, and most often neglected in the research, genuine two-way consultation and communications with the people affected by the changes. As one HR manager put it, all too often the experience is that 'the deadlines were very tight … decisions were pushed through without time to consult and fine tune'.
Both Hendrika and Ruth told how they devolved authority substantially and heavily involved local managers and staff in the design and delivery of their changes, making their success much more of a self-fulfilling prophecy. Last week we heard of another radical example of this, as Accountancy Age reported incoming Grant Thornton CEO, Sacha Romanovich, outlining changes to the firm's ownership structure designed to produce a more agile, empowered and higher performing firm. Its 185 partners have voted overwhelmingly (99 per cent) to start a consultation on changes to give all staff a stake in the business, helping with decision-making and sharing in profits – 'the John Lewis model, effectively.'
According to Romanovich:
'The only way we can fully harness the potential of all 4,500 of our people is through shared enterprise - a sense that we are all in this together sharing our thinking and ideas, sharing the responsibility to drive the business forward and sharing in the resulting rewards.'
She points to the evidence as to stronger financial performance of employee-owned firms.
Ironically, Accountancy Age frets that Romanovich's changes are being introduced too quickly. At least BDO partners, like the Lib Dems MPs, now all will get a strong say in who leads them and the changes that they introduce, massively increasing the chances of them actually leading to the desired service improvements. Can you say the same for your organisation?
The overwhelming lesson from our HR Retreat was that if we are truly serious about successfully landing major, performance-transforming changes then we need far more leaders with the courage to 'let go' and empower and reward their people like Romanovich and Ruth Owen, ably supported by their HR and change management colleagues.