Wednesday, 25 January 2012

Ed Lawler on Change (presenting at the HR Directors Business Summit, part 1)


   So I’m back here again. The main highlight today is Ed Lawer on one of his rare trips to the UK.

We start on the need to build changeable rather than simply great, but stable, organisations. This is the difference between new normal and old normal - change and accountability. We’ll never go back to the days of fixed job descriptions.

Companies don’t generate competitive advantage out of the ability to execute but from the ability to change and adapt on an ongoing basis.  They need to be able to adjust to a series of competitive advantages which are always changing.

This, for Lawler, is why 80% of changes fail – it is because they are trying to change an organisation which is built to resist change.  And we’ve moved from an era of episodic change to one of continuous change – we won’t be re-entering an era of stability.  The world is not built this way, and we’re not changing in this way.


Episodic Change

Change capability lacking – rented when needed

Focus on efficiency over innovation

Stability = effectiveness

Change = enemy

Performance reflects change patterns

Decision making centralised

Resource allocation through budgets

Continuous Change

Change capability embedded in organisation design

Focus on ambidexterity

Change = effectiveness

Stability = enemy

Performance reflects change pattern

Decision making shared / decentralised

Resources allocated through accountabilities


Built for stability may provide short periods of good financial results but it won’t last.  This is a major role for the HR function to take responsibility for this adaptability and it needs to impact on the reward systems it designs, the interfaces it has, etc.  We need to put people in touch with their stakeholders: customers, regulators etc – so they can see it, have to deal with it etc.



HR needs to create, not just be at the table.  This isn’t just about taking the business strategy and translating it into HR practices and organisation design.  The strategic piece is entering discussion with human capital and business data showing which additional capabilities can be developed given human capital issues (this is what I call creating value).



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