Navigating transformational change

Orla Gallagher, Emma Press and Ateli Tovio, from PwC’s Workforce Consulting Practice, outline three areas of focus for HR professionals to support their organisations through transformation.

As we journey through 2024, the workforce is going through significant changes. These are driven by factors like AI, the aftermath of the global COVID-19 pandemic, the dynamics of a multigenerational workforce, the focus on ESG (environmental, social and governance) and NetZero, in addition to broader global megatrends and local waves of change in Aotearoa.

PwC’s latest CEO survey explores how organisations can thrive in this era of continuous reinvention. The survey found that 95 per cent of CEOs in Aotearoa (and 97 per cent globally) have taken steps to reshape their business operations in response to global megatrends. Around 70 per cent of CEOs in Aotearoa (76 per cent globally) have made significant changes to their business models. While this presents opportunities for organisations in Aotearoa, it also brings unprecedented levels of uncertainty and challenge.

In this landscape of change, HR professionals have three crucial areas of focus to support their organisations throughout the reinvention journey.

1. Never underestimate the importance of culture.

2. Invest in enhancing change capability.

3. Adapt to the needs of the multi-generational workforce. By prioritising these areas, HR professionals can guide their organisations through the challenges and opportunities of continuous reinvention.

1 NEVER UNDERESTIMATE THE IMPORTANCE OF CULTURE

Organisations often underestimate the profound impact of workforce culture on driving or hindering change. At PwC, we define culture as the self-sustaining patterns of behaviour, thoughts and beliefs that shape how things are done within an organisation. Achieving an equal balance between strategy, operating model and culture is crucial for success.

PwC’s research reveals that organisations with distinctive cultures drive remarkable business results. They are 48 per cent more likely to experience revenue growth, 80 per cent more likely to have higher employee satisfaction, and 89 per cent more likely to achieve higher customer satisfaction. With 88 per cent of business leaders agreeing that culture enables successful internal change initiatives, harnessing your culture can accelerate your journey to success.

Achieving an equal balance between strategy, operating model and culture is crucial for success.

To activate and evolve culture, organisations can leverage key enablers, such as leadership, communication, employee engagement, performance management, learning and development and organisational structure. By leveraging these enablers, organisations can align their culture with their strategic goals and drive positive change. HR professionals are in a unique position to help organisations to do this.

However, culture can sometimes hinder transformation when behaviours do not align with the organisation’s direction. In such cases, HR professionals need to consider how to transform the culture to support the organisation’s objectives.

Start with behaviour

Culture is a formidable and enduring force that requires significant effort and time to transform. HR leaders can support culture change by focusing on the behaviours within the organisation. Behaviours are the enduring ways of acting that are considered regular or expected, and link values to everyday actions: it’s the ‘how we do things around here’. By targeting behavioural change, HR professionals can achieve change more quickly.

Culture is a formidable and enduring force that requires significant effort and time to transform.

Identifying and prioritising strategic goals is crucial to effectively navigate challenges and achieve success. Conducting a ‘Culture Assessment’ helps organisations understand the traits and behaviours that already align with their goals. PwC offers the Culture Thumbprint, a digital tool that provides a baseline of the current culture and its alignment with the desired future state. Once organisations can see where they are, it’s much easier to identify the change they need to make.

HR professionals can use the Culture Assessment to pinpoint a small number of key behaviours (no more than five) and focus efforts on specific areas of improvement. By using the culture enablers they already have access to, they can align learning and development initiatives with targeted behaviours, and design training programmes that reinforce and promote the behaviours that will support a more effective and manageable transformation process. Leadership plays a crucial role in driving cultural change, and HR professionals can identify and support candidates for leadership coaching to model and promote the desired behaviours. They can also review organisational values to ensure they align with and underpin the behaviours that will ultimately drive cultural change.

Evolving culture is not a one-time event but an ongoing effort.

Measuring adoption and progress

Measuring the adoption of these behaviours is the next step. Establishing leading indicators, such as business key performance indicators, first-hand observations, and assessing participation levels in behaviour change initiatives, allows organisations to monitor progress and make necessary adjustments. Consistent monitoring, learning and the celebration of results are crucial for achieving sustained behaviour change and transforming culture.

Evolving culture is not a onetime event but an ongoing effort. Organisations must continuously assess and adapt their culture to ensure alignment with strategic goals and overall success.

2 INVEST IN ENHANCING CHANGE CAPABILITY

Gone are the days when change management was seen as a skill set reserved for a select few in a project or change team.

According to our recent survey, 64 per cent of CEOs in Aotearoa are planning to upskill and reskill their people in the coming year. For HR professionals, it is crucial to seize this opportunity to effectively support the workforce through transformational change, while investing in their own transformation journey. To do so, they must demonstrate and instil sophisticated change capabilities across the organisation.

Gone are the days when change management was seen as a skill set reserved for a select few in a project or change team. It is now essential to embed transformation as a mindset, supported by a set of core behaviours that enable everyone to adapt rapidly and regularly without hindering business operations. HR professionals have a unique opportunity to upskill the workforce on change and lead them through the transformation journey.

To achieve this, HR professionals need to shift their thinking and educate the organisation about change by:

• shifting mindsets to see change as continuous not ad hoc

• changing the approach from prolonged and static, to rapid and responsive (to external and internal factors)

• shifting the perception of change as being a discrete set of skills to a core capability that is essential for every professional in today’s workplace.

Resilience is a crucial aspect of change capability.

Leading change

HR professionals should see themselves as change leaders at all levels and focus not only on upskilling themselves but also on supporting the workforce to do the same. This involves providing them with the knowledge, frameworks, tools and support to change their mindsets and behaviours. It is essential for HR professionals to demonstrate their own adaptability, as they engage with the workforce to understand what support is needed to involve them in organisational change without causing change fatigue.

Resilience is a crucial aspect of change capability. Constant change can lead to uncertainty, which can significantly impact on the workforce. HR professionals must recognise this and have a range of tools and support mechanisms in place, such as coaching and learning and development programmes, to ensure the wellbeing and resilience of both the workforce and themselves. This will help prevent burnout often associated with high levels and frequency of change.

3 ADAPT TO THE NEEDS OF THE MULTIGENERATIONAL WORKFORCE

Today’s workforce comprises multiple generations, each with their own unique perspectives and experiences. Understanding how to effectively prepare and support a multi-generational workforce through change is crucial for embedding change capability within your organisation. It’s important to recognise that a one-size-fitsall approach does not work when it comes to people.

To effectively assess how change will affect your workforce, it’s essential to understand the different generational cultures, thinking, approaches, values, expectations and life experiences that exist within your organisation. Each generation responds differently to change, and while digital natives may be more comfortable with technological advancements, older generations may be more accustomed to evolving roles and careers.

Each generation responds differently to change..

Thrive in an era of continuous reinvention

Creating alignment across your workforce is essential. Building alignment between leaders and employees around the organisation’s priorities for change fosters a culture of trust and transparency. Adopting a citizen-led innovation approach empowers your people to build and embed change capability and skills that can be immediately put into action.

HR professionals play a vital role in guiding organisations through transformational change. The challenges and opportunities brought by continuous reinvention demand a strategic and proactive approach. By recognising the impact of culture, investing in upskilling for change capability, and adapting to the needs of the multi-generational workforce, HR professionals can ensure that organisations not only survive but thrive in an era of continuous reinvention.

Orla Gallagher is a Director in the PwC Workforce Consulting Practice. She specialises in helping organisations analyse and harness their unique culture to help them achieve their strategic aspirations.

Emma Press is an Associate Director in the PwC Workforce Consulting Practice. She specialises in taking a people-centred, relationshipbased approach to change, finding solutions to challenges while keeping people at the heart.

Ateli Tovio is a Manager in the PwC Workforce Consulting Practice. She specialises in working collaboratively with organisations to manage successful transformation with a holistic view that incorporates both cultural competency and long-term strategic goals to ensure sustained outcomes.