How to manage the talent risk in transformation

1. Create a vision and culture where people want to perform at their best, even during times of uncertainty

CROs will want to work with their chief human resources officer (CHRO) to steer their organization toward transformation success. They should recognize critical talent as strategic assets rather than surplus operating costs that inevitably translate into headcount cuts at the first sign of a downturn.

In our survey, half of employees who experienced an underperforming transformation agreed that transformation was just another word for layoffs. Going into a transformation with a negative mindset creates a greater risk of underperformance and passive resistance right from the outset.To counteract this perception, CROs will want to help to create and communicate a compelling vision where everyone can see their role and how it will benefit them. The right story can engage, excite and motivate people to go the extra mile, even during the darkest days.

Key action for CROs:

Work with transformation leaders to craft a compelling and authentic story that describes a shared purpose and aspiration that benefits a wide set of stakeholders. An extended purpose has to address a number of conflicting priorities. CROs can help sort out which priorities are critical to achieving the desired outcomes for the transformation and provide the motivation for people to engage rather than check out.

2. Close the future skills gap

To understand the future skills gap, CROs will need to work with CHROs to understand what skill gaps their people currently have. From there, they can jointly develop innovative learning programs to upskill and reskill.

Through a combination of hiring, upskilling or reskilling, collaboration and outsourcing, CROs can help their organizations cultivate the right digital mindsets and skillsets to turn the potential value of transformation into reality. Forty-nine percent of respondents in high-performing transformations said their organizations had the digital skills and mindset needed for transformation versus 35% of respondents from low-performing transformations.

Key action for CROs:

Work with the CHRO to foster the proper learning environment, training and space to upskill or reskill in ways that give people confidence to move forward.

3. Show people you care and mean it

There can be no psychological safety among employees when they see that they are the first to go when times get tough. CROs must support the development and wellbeing of their people to succeed.

One way to achieve this could be with a servant leadership model coupled with authenticity and an openness to listening and acting on the opinions of people across all levels of the organization. By doing so, leaders can help people feel supported as they navigate the ups and downs inherent in a transformation journey. 

CROs will need to work with the C-suite to manage transformation risks by championing a servant leadership model and creating environment that puts people at the center of transformation.

Key action for CROs:

Persuade the C-suite to adopt a servant leadership model that puts the workforce first at the heart of the transformation. Consider layoffs the last cost-cutting option rather than the first. Reskilling and redeployment actions go a long way to demonstrating psychological safety. Practice active listening, be open to the opinions from all parts of the organization and respond to them to demonstrate that their voice has been heard.

4. Create a culture of experimentation and collaboration

In many organizations, roles are often designed to integrate command and control structures. Leaders who limit risks through excessive control erode opportunities for autonomy, innovation, and empowerment.

Risk management starts with hiring the right people with the right values that align with those of the organization. If leaders trust their people, they should empower them to take risks that create value for the organization. Investing in intelligent risk-taking encourages rather than inhibits creativity, experimentation and innovation.

In addition to encouraging an entrepreneurial culture, CROs should also support a culture of positive collaboration. Collaboration enables transformations to thrive. Yet many organizations continue to project manage transformations down into tasks and goals that can dehumanise the change management process required to build new skills and capabilities for transformation and continuous improvement. CROs can help transformation leaders see that measuring on outcomes and new capabilities rather than tasks will improve future capabilities and decision-making.

Key action for CROs:

Work with transformation leaders to give employees the disciplined freedom to build new skills, experiment and fail fast, and to be creative problem solvers in ways that optimally manage risks for reward. Encourage a culture of collaboration and a diversity of perspectives and measure performance on outcomes rather than specific tasks or goals.

Managing talent risk as organizations transform is less about process and tools, and more about having the right mindset to cultivate people to go the extra mile for a vision they believe in and who feel properly supported throughout the journey. CROs will want to encourage them to think like entrepreneurs who have their own capital at stake.

Entrepreneurs deal with risk all the time. It’s a skill many organizations lose as they grow. In the right culture and environment, people involved in transformation can experiment, innovate and produce creative solutions even as they manage or even take advantage of the associated risks.

The result is a resilient, sustainable organization that can navigate any challenge and accelerate growth once the storms and crises pass.

Summary

By identifying talent risks early, CROs can make their organization’s people the linchpin of transformation. They should work across the organization to align key stakeholders with a shared risk mindset.