The People Factor in Transformational Change

Aston Business School’s upcoming Professional Managers’ Award programme includes People Management as one of its key topic areas – a discipline attaining ever-increasing importance as Professor Pawan Budhwar, one of the programme’s expert trainers, explains…

PawanThe stellar growth of India’s economy over the last two decades or so is largely an outcome of the liberalisation of its economic policies.  This resulted in sudden and increased levels of competition from international companies, putting severe pressure on Human Resources (HR) departments in Indian businesses, who have been required to bring about large-scale structural changes to cope with these new challenges.

During this period of upheaval, the topic of transformational change has attracted a great deal of attention – it involves simultaneous alterations in the strategy, architecture and culture of an organisation.  However, successful transformational change management must be driven by effective leadership from the very highest level.

We conducted research in an Indian power generating company that was undergoing such radical change.  Our findings gave us a significant insight into how successful transformational change might be managed in a critical infrastructure organisation and the critical role HR plays in its success.

The power sector in India has been passing through major transformation.  Our research focused on change management during the acquisition of a public utility company by a public-private partnership.  We found that efficiencies were attained through the introduction of basic functional structures and formal performance and change management processes.

Organisation structure at the time of takeover was chaotic.  The personality of the new CEO was crucial – he led from the front and his entire team respected him for his charismatic and visionary leadership qualities.  His belief that corporate performance is determined not just by customer care, but also by focusing on care for employees and their involvement in decision-making, had a positive effect on employee commitment and legitimised his change agenda.

The competence, experience and proactive mind-set of the head of HR were important factors in facilitating, articulating and implementing the organisation’s people management strategy.  Setting the right tone reduced fear and increased trust.  His leadership was marked by a concern for acclimatising the employees to the core values of the company.

Another aim of the planned change was to focus on functional requirements and align them with performance demands and customer needs. The leadership made clear from the outset what the expected standards of performance were.  The entire change effort demonstrated a seriousness of purpose that sent a clear message to all that old habits and inefficient ways of working would no longer be tolerated.

Skilful attention to the people factor helped HR play three strategic roles.  It introduced a forward-thinking culture, in which employees saw that a progressive organisation had brought about many changes in a very short span of time.  It became a strategic partner, a role which had not previously been clearly visible to all within Indian organisations.  It presented the key agents of change with a coherent and holistic approach to follow.

As in most successful organisational transformations, this case once more reiterates the need to ensure that HR is elevated from a merely functional to a central and strategic role in managing change, and it resulted in enhancing both the efficiency and effectiveness of the process.

Aston Business School’s Professional Managers’ Award career development programme gets underway this autumn. To find out more and to discover how the award could help you and your organisation, please or call 0121 204 3160.