April 27, 2006

Strategy:

Four Essentials for Implementing Fundamental Change

n any successful recruiting or HR operation, change is a constant. Practices, policies and processes must continuously evolve to meet new developments in the organization or in the market for talent. Sometimes, however, simply adjusting the current model is not enough. When efforts to evolve a process begin to deliver diminishing returns, a fundamental change in organization or processes will be necessary.

Whether adopting a technology, centralizing distributed processes, or making any comprehensive effort at moving in a new strategic direction, fundamental change is an understandably touchy subject at most companies. It is risky. It can be expensive, and most decision-makers have been involved in failed initiatives at some time in the past.

Despite the risks, two facts are crucial. First, many companies have successfully implemented new processes and technologies to achieve tremendous strategic advantages in finding and retaining the best talent. Second, avoiding needed initiatives or "patching up"  current systems and processes can be more risky than implementing a major initiative. Once lost, a competitive edge in the market for talent is difficult and expensive to recover. 

So, what makes a major initiative succeed? A look at the lessons of past recruiting and HR initiatives reveal four essentials for implementing fundamental change. By focusing on the basics and adhering to their demands, companies can take the mystery out of making a major initiative deliver on its promise.

One: A Thorough Current-State Analysis
The concept of current-state analysis is well known. Decision-makers must understand where their organizations are today before they take them to where they want to be tomorrow.  Yet, many initiatives fail because planners only take their current-state analyses to varying levels of completion.

An effective current-state picture must present more than a collection of data. It must also put that data into context. It must reflect an understanding of what that data means. For example, you may know you have a specific hiring need in a location to support a line of business, but do you know whether that hiring need puts the operation in jeopardy?  Do you understand the risks and consequences of action or inaction. Having the answer to these interpretative questions may require a longer assessment period, but it could mean the difference between a successful effort and one that dies for lack of adoption.

Two: Early Planning for Future Conditions
A strategic look at future challenges goes hand-in-hand with the current-state analysis.  At this stage, it is important to develop a thorough understanding of how all changes – both external (market forces) or internal (changes in roles and processes) – will affect the organization. Now is the time to itemize all dimensions of change, including the way roles will evolve, how individuals are going to utilize technology and how processes will be different.

It is also important at this stage to rise above operational details. To gain executive endorsement for the initiative, a strategic understanding of the fundamentally different model is crucial. Why will the world be different? How will it be different? How can the company mitigate the risk?

These are big questions that can't be answered with a single detail, and they are understandably important. These will be the questions that planners must be able to answer before they embark on a major initiative. If a company is about to risk inflicting the potential chaos of change on its employees, leaders will want to know why and how it is being done, and the answer must have strategic significance.

Three: A Detailed Future-State Vision with Quantifiable Objectives
A thorough understanding of the future-state vision is one of the most critical ingredients to a successful initiative. Without a detailed future state vision, there is literally no reason for the organization to buy into the initiative.

The future-state vision arises directly from initial assessment and planning efforts. The thoroughness of those efforts will directly determine the practicality of that vision and its ability to sustain support over time. To be effective, planners must have a complete grasp of operational processes in the new order, but they also must maintain a high-level understanding of the new strategic implications. Also, as the future-state represents the goals of the initiatives, quantifiable objectives will be essential for measuring success.

Four: A Comprehensive Risk v. Benefits Comparison
Finally, a compelling future-state vision must account for risk. Frequently, as they invest more effort into developing an initiative, planners find themselves actively selling the project to senior management. To maintain credibility in selling the benefits, it is important to understand and communicate the risk. If corporate leadership doesn't hear about the risks of the project, they will not assume that the risk isn't there; rather, they may assume that you didn't take the time to understand it.

Along with the risks, it's just as important to establish the strategic benefits of your initiative. In most cases, if you simply compare a list of tactical benefits to the risks, the risks would outweigh the benefits. Usually, it is the strategic benefit that is driving the change, and a risk benefits comparison needs to account for that.

Moving Forward: Preparing Your Organization For Change
From assessing the current state to identifying risks and benefits, there are no shortcuts to implementing fundamental change. Most failed initiatives can be traced to some shortcoming during this early planning process--a shortcoming that can return to haunt the company during later stages of implementation.

What do each of the four essentials to the planning process have in common? Each requires a thorough understanding of both operational details and the strategic drivers affecting the organization. With the right planning at the outset, the organization can navigate the chaos of change and emerge with the business results it set out to achieve.