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HR’s role in the new economy

HR’s role in the new economy

By Jeff Sacht & Christo Nel

Executive Summary

GIMT incorporating The HILL School for Business conducted two exploratory studies in 2003 to determine the degree to which South African business is making the shift from a business as usual (Old Economy) paradigm to a New Economy style of managing organisational and people performance.

According to the Beehive Model of organisational renewal, developed by GIMT, Incorporating The HILL School for Business, seven critical workplace practices must be implemented and entrenched for companies to have a competitive edge.

Two groups of respondents were surveyed. A group of 249 current and past MBA students drawn from various business schools were surveyed to obtain a Line management perspective, and a sample of 135 Human Resource (HR) professionals represented an HR staff perspective. Respondents were asked to rate the degree to which their companies implemented seven workplace practices: strategy; structures; business disciplines and processes; talent creation; seeking commitment from all stakeholders; pay and incentives; and change leadership.

The bottom line message that emerges from both studies is that South African business is still far from capable of entrenching the critical strategic leadership and workplace practices required to create a high performance and change hardy business culture capable of rapidly transforming itself to compete in the global arena. The 2 key drivers of business transformation as predicted by the Beehive Model are Strategy and Change Leadership. Both respondent groups agree that these two critical dimensions are weak spots in the way South African organisations function.

Line and HR concur that South African businesses seem to be wavering between what are regarded as New Economy practices, such as flat structures and cultivating empowered, participative employees who have access to information, and Old Economy practices, such as mechanistic and bureaucratic workplace practices.

 

1. Introduction

One of the major challenges experienced by companies in both developed and emerging economies is to make companies more flexible and adaptable to changing customer demands and new competitive challenges. The first response to these demands is often for organisations to decentralise decision-making. The idea is to give decision-making authority to those who are closest to both customers and the marketplace. The potential problem arising from decentralised decision making is that at least some of the myriad decisions that are made "in the moment" at the lower levels of the company actually conflict with the business’ core value proposition to its customers.

Each individual decision, while appearing optimal within the narrow context in which it is made, may not be optimal from the perspective of the company as a whole. The risk, therefore, is that the company will lose a consistency of focus and that the business’ value proposition to its customers will become muddled and indistinct. So, the question is how to ensure a consistent focus on (and internal alignment with) the organisations value proposition to its customers-while also providing employees with the flexibility they need to react quickly and effectively in the moment.

As line managers become more distracted by changes in the moment, guardianship of company's value proposition to its customers arguably falls to HR. Internal alignment of all the companies structures, systems, processes, and practices with the company's value proposition to customers provides a basis for differentiation in intensely competitive markets; ensuring alignment requires explicit hardwiring of the customer value proposition into company's business and workforce management systems. HR’s role is to facilitate a set of guiding principles reflecting company's value proposition to customers can help to ensure consistency across the entire organisation while providing individual employees with sufficient autonomy to respond to challenges in the moment

A starting point for building focus and coherence is for organisations to adopt a tried and tested model of organisational functioning. GIMT, Incorporating The HILL School for Business has developed the "Beehive Model" and the related "Beehive Survey" based on the work of Christo Nel and his colleagues at the Stellenbosch Business School in South Africa. This model identifies seven sets of critical workplace practices that need to be integrated to entrench high performance and drive sustainable competitiveness within an organisation.

The Beehive Model and Survey has been found to be a robust and practical model, useful across a number of organisational settings, including a major banking group, a poultry producer, and a multinational brewing company, to name but a few.

The next step would be to measure the organisations internal capacity to deliver the organisations value proposition to customers against established organisational functioning benchmarks. The gap between where the company is now and these benchmarks provides the development ‘agenda’ HR needs to facilitate change in the name of building a set of core internal values, systems, structures and business practices required to deliver the organisation’s promise or value proposition to the market place.

This remainder of this paper will describe the Beehive Model, summarise the research that has been conducted to date using the Beehive Model, and present the findings of 2 recent Beehive Surveys, one with line managers, and one with HR to highlight areas of agreement and differences about a strategic agenda for change to build globally competitive South African organisations.

2. The Beehive Survey of Organisational Functioning

Unlike most surveys, which gather employee opinions and ratings of "climate" issues (management and supervisory practices, communication practices, work-life balance, company values, work relationships, etc.), a Beehive Survey targets specific areas that have been shown by sound management theory and research to have a direct relationship with high organisational performance.

Climate surveys have a place in providing useful data to management, but often that data is not actionable. In other words, either because management is unable or unwilling to take action in response to employee opinion about a given issue, or because the data itself fails to provide clues as to the appropriate action to take, nothing gets changed. The result is that employees’ expectations for change fail to be met, and they become less motivated to pour their hearts and minds into their work.

In a paper delivered at the 2003 Global Conference on Business and Economics, Denton and Bouwer state "the Beehive Model’s structure …and the associated (survey) questionnaire indicators are soundly supported by recent academic theory as well as the limited available empirical research on related topics. It is therefore possible to conclude with a reasonably high level of confidence, as viewed against the backdrop of trends in theoretical literature and empirical research on related topics, that compliance with an holistic application of best practice is likely to result in the entrenchment of change and high performance within an organisation’s culture" (Denton, M, & Bouwer, E, 2003, p 2).

The information obtained from a Beehive Survey provides managers and change agents with a profile of an organisation’s performance that can be compared to current best practices. The Beehive assessment gives an organisation, department or business unit the opportunity the re-think it’s workplace practices that research has shown to be strongly related to superior performance in The New Economy. The survey produces a snapshot of the following seven areas shown in figure 1 below.

Figure 1

The Beehive Model of

Organisational Functioning

 

  • Strategy: The ways in which strategy is formulated and utilised as a primary driver of performance within the organisation
  • Structures: The extent to which structures are designed to reinforce and drive performance by optimising the organisation’s supply chain and the fulfilment of accountability at all levels
  • Talent Creation: Workplace practices and disciplines that ensure the optimum development and utilisation of people and their ability to contribute to performance
  • Business Disciplines: The adoption and widespread use of a set of integrated business disciplines that reinforce and cause high performance
  • Stakeholder Commitment: Developing the alignment of all stakeholders so that they operate as active contributors to the competitiveness of the organisation
  • Pay and Incentives: The alignment of pay and incentive systems that attract, retain, and enhance the commitment of people across all levels
  • Change Leadership: The use of proven leadership and processes for implementing change and turning strategy into operational action that delivers competitive performance.

A Beehive Survey is designed to achieve whole systems improvement. For one organisation, that may simply require a re-alignment or redesign of one or more of its human resource management systems. For another company, there may be a more extensive change programme required that could involve changes to structure, changes in the design of key jobs, changes in management decision practices, or even a re-engineering initiative to improve the efficiency and output of its core processes.

3. Current research about New Economy practices in South Africa

GIMT, incorporating The HILL School for Business initiated two exploratory research projects to determine the degree to which South African business is making the shift from a business as usual (Old Economy) paradigm to a New Economy style of managing organisational and people performance.

The survey results will provide Line managers and HR professionals with important base-line information about where change is urgently required if South Africa is to remain globally competitive, and not be sidelined as a business backwater not worth investing capital in. Over time, industry specific profiles for the 25 industry sectors or SETAS (as defined in The Employment Equity and Skills Development Acts, 1998) will provide context specific road maps for change.

The concurrent surveys were administered in June-July 2003. One study examined the responses of past and present MBA students based on the assumptions that MBA students have a greater exposure to senior management thinking and action, and may have access to information not readily available to people at more operational levels. These respondents represent a line management view of organisational behaviour functioning. The second survey targeted a mixed group of HR professional across the spectrum of HR roles found in business. This sample represents a staff specialist perspective. Arguably the HR role is there to focus directly on the behavioural and people management side of business.

Participants were contacted, and asked to complete either an online questionnaire, or a paper based Beehive Questionnaire. Two hundred and forty nine (249) line surveys and one hundred and two (102) HR surveys were completed and retrieved for analysis.

Respondents were asked to assess their organisation on seven sets of workplace practices corresponding to the seven dimensions of the Beehive Model. Each set contains eight pairs of indicators. The pairs of items describe behaviours or ways in which their organisation may be operating.

The participants were asked to consider the two opposing pairs and decide the extent (on a 4-point scale) to which either the one or the other statement is true for the department or business unit within which they work. Below is an example of the bi-polar questionnaire.

 The answers on the left of the mid point (-4 to -1) are called "Old Economy", and those on the right of the mid point (+1 to +4) are called "New Economy". The "Old Economy" answers are counted for each question, and percentaged out of the total number of possible answers including 0 for each question. The "New Economy" answers are counted for each question and percentaged out of the total number of possible answers including 0 for each question.

A graph is constructed using the percentages of Old Economy / New Economy answers. Because answers that are 0, or on the mid point are not reported, but are included in the totals on which the percentages are calculated, the percentages of Old and New Economy answers will not add up to 100%.

Figure 2

 Bipolar Questionnaire

 

7. Survey highlights

The 2 key drivers of business transformation as predicted by the Beehive Model are Strategy and Change Leadership. Both respondent groups agree that these two critical dimensions are weak spots in the way South African organisations function (see tables 1 and 3).

Line and HR concur that South African businesses seem to be wavering between what are regarded as New Economy practices, such as flat structures and cultivating empowered, participative employees who have access to information, and Old Economy practices, such as mechanistic and bureaucratic workplace practices.

Table 1

 HR SampleHR: New Economy Beehive Scores (%’s) for

South African Companies

 

South Africa Overall

Old Economy

New Economy

 

 

HR

 

HR

  1. Strategy

 

48.77

 

48.65

  • Structures

 

45.47

 

51.23

  • Talent Creation

 

43.75

 

52.21

  • Business Disciplines

 

47.55

 

48.16

  • Stakeholder Commitment

 

36.89

 

58.95

  • Pay & Incentives

 

48.77

 

45.83

  • Change Leadership

 

53.92

 

42.03

Total

 

46.45

 

49.58

 

 The second highlight of the HR study shows that when the findings were split in terms of company size by head count it was found that HR in small organisations see themselves as being relatively further along the road towards New Economy workplace practices compared to medium sized companies (see Table 2). This relative difference can possibly be accounted for by the entrepreneurial organisational style required by small companies to adapt rapidly to signals from a dynamic marketplace that rewards change and high performance with growth and development.

Table 2 HR

 

New Economy Beehive Scores (%’s) for Small, Medium & Large

South African Companies for HR Sample 

Beehive

Dimensions

Small

(Up to 50)

Medium

(51 - 500)

Large

(501+)

 

HR

HR

HR

1. Strategy

48.39

47.22

49.72

2. Structures

63.31

47.69

44.89

3 Talent Creation

58.06

48.61

50.28

4. Business Disciplines

52.02

53.24

42.33

5.Stakeholder Commitment

63.71

63.43

52.84

6. Pay & Incentives

51.21

40.74

45.17

7. Change Leadership

43.95

33.33

46.02

Total

54.38

47.75

47.32

It is worth noting that when the MBA/Line results are compared to the HR/Staff results there is a remarkable similarity in the general direction and pattern of scores for both samples by overall score (table 3) and by company size (table 4). This indicates a great deal of alignment between staff and line points of view. From a change management perspective this makes HR’s role as a champion of change somewhat easier. There is less debate about the ‘agenda’ for change. However, this apparent congruence of viewpoints masks the real differences in perception between Line and HR when it comes to entrenching a competitive and change hardy business culture.

 Table 3

MBA/Line sample vs. HR/staff Sample

New Economy Beehive Scores (%’s) for

South African Companies Overall

 

South Africa Overall

Old Economy

New Economy

 

MBA

HR

MBA

HR

  1. Strategy

46.86

48.77

51.03

48.65

  • Structures

44.65

45.47

52.84

51.23

  • Talent Creation

41.47

43.75

55.87

52.21

  • Business Disciplines

44.98

47.55

51.10

48.16

  • Stakeholder Commitment

35.14

36.89

59.74

58.95

  • Pay & Incentives

45.85

48.77

49.12

45.83

  • Change Leadership

49.30

53.92

47.64

42.03

Total

44.03

46.45

52.48

49.58

 

 Table 4

 MBA/Line sample vs. HR/staff Sample 

New Economy Beehive Scores (%’s) for

Small, Medium & Large South African Companies 

 

Beehive

Dimensions

Small

(Up to 50)

Medium

(51 - 500)

Large

(501+)

 

MBA

HR

MBA

HR

MBA

HR

1. Strategy

57.50

48.39

42.68

47.22

52.04

49.72

2. Structures

64.46

63.31

50.21

47.69

49.26

44.89

3 Talent Creation

59.09

58.06

51.69

48.61

56.39

50.28

4. Business Disciplines

51.14

52.02

44.07

53.24

54.17

42.33

5.Stakeholder Commitment

60.91

63.71

49.36

63.43

63.80

52.84

6. Pay & Incentives

51.14

51.21

41.10

40.74

51.81

45.17

7. Change Leadership

53.64

43.95

38.35

33.33

49.26

46.02

Total

56.64

54.38

45.35

47.75

53.82

47.32

 

By inspection (using a rule of thumb difference of between 6-10% difference in perception/scores between the respondent groups) the major difference appear to relate to company size, and by logical extension the stage of development of the organisations in the two studies.

  • For small companies the largest differences between Line and HR are: Strategy, and Change Leadership;
  • For medium sized companies the largest differences between Line &HR are: Strategy, Structure, Business Disciplines, Stakeholder Commitment, and Change Leadership;
  • For large companies the major differences between Line and HR are: Structures, Talent Creation, Business Disciplines, Stakeholder Commitment, and Pay & Incentives

These seemingly random differences can possibly be explained by the fact that as organisations grow, and become more specialised they require a more differentiated approach to workforce, and organisation management. This alone can account for the relative differences between the respondent groups. Arguably, as business becomes more hectic, and Line management become more preoccupied with dealing with competitive pressures it is up to HR to take up the challenge to facilitate the process of developing organisational coherence and identity to ward off the negative effects on performance of organisational uncertainty.

These differences are more easily recognised by HR who work across boundaries between functions and levels far more than the ‘typical’ line manager is required to. HR may simply be in a better (position compared to Line) to discriminate in finer detail where workforce management and organisational practices are deficient and need to be changed.

8. Develop an agenda for change

If we take a closer look at the ‘New Economy’ scores at an item level (the questions) where there is at least an 8-10% difference in low/pessimistic ratings between the two samples major issues to include in an agenda for changing the way South African organisations are managed are easily identified. These issues are highlighted in bold for each dimension in tables 5-11.

Overall the pattern of scores for all the items highlighted in bold type reveals that HR is even less optimistic than Line about the strength of these New Economy practices in South African companies.

# Strategy: The Strategy dimension of a Beehive Survey examines the way in which strategy is formulated and utilised as a primary driver of performance within an organisation. The survey examined strategy from two perspectives i.e. the process by which strategy is formulated and the way it is used as a primary driver of performance.

Both respondents groups rated this dimension around the 50% mark, which is 30% lower than their South African counterparts. In previous research conducted by the Stellenbosch Business School it was found that globally competitive South African companies scored around 80% for this dimension.

Two key issues that emerge from the recent researchfindings about how strategy formulation is handled by management are:

  • Senior management communication (Agenda item 1)
  • Formal execution processes (Agenda item 2)

 Table 5

 MBA/Line Sample vs. HR/staff sample

Overall New Economy Beehive Scores (%’s) for Strategy

 

Strategy

Old Economy

New Economy

 

MBA

HR

MBA

HR

Influencing strategy

54.44

53.92

45.56

45.10

Senior management congruence

42.57

34.31

55.82

62.75

Cohesive interpretation

51.81

53.92

45.38

42.16

Senior management communication

45.78

51.96

51.81

43.14

Operations comprehension and focus

49.00

53.92

49.40

43.14

Formal execution processes

43.78

53.92

53.41

42.16

Common view of strategic challenges

40.56

38.24

55.82

61.76

Alignment of 7S to strategy

46.99

50.00

51.00

49.02

Total

46.86

48.77

51.03

48.65

 

 # Structures: Companies need to make the most of their supply chains, and make individuals accountable. This is achieved by having flat and easy communication, clarity of roles and empowerment of people. Senior management has to be involved in strategic activities and must make the company strategy operational.

The overall score for both samples indicates that South African structuring practices are in the middle (50%). Business life is not geared to senior management ‘walking the talk’ and facilitating, or helping their management teams to translate strategy into day-to-day tactics.

Two of the fundamental principles of organisational structuring that have a major influence on work motivation and commitment levels are identified as Items for change:

  • Clarity of roles by level of work (Agenda item 3)
  • Role clarity and empowerment of people (Agenda item 4)

Table 6

 MBA/Line Sample vs. HR/staff sample 

Overall New Economy Beehive Scores (%’s) for Structure 

 

Structures

Old Economy

New Economy

 

MBA

HR

MBA

HR

Boundaryless collaboration

47.39

44.12

51.00

52.94

Customer focused design

40.16

34.31

59.04

62.75

Flat and easy communication

33.87

30.39

63.31

65.69

Clarity of roles by level of work

39.76

47.06

57.83

49.02

Role clarity and empowerment of people

44.58

49.02

53.41

45.10

Senior man involvement in strategic activities

52.61

53.92

44.58

43.14

Facilitate relevance and execution of strategy

55.02

56.86

42.57

41.18

Senior man translation to operations

43.78

48.04

51.00

50.00

Total

44.65

45.47

52.84

51.2

 

# Talent creation:Companies need workplace practices that develop employees to their full potential and ensure they contribute the maximum to the company. One of the more positive findings of the survey is the fact that compared to the other dimensions in the survey, talent creation is being actively pursued. Scores in the mid fifties for both samples are still close to 30% lower than those of globally competitive organisations. To become globally competitive South African organisations need to spend far more than the obligatory 1% of payroll they currently do as part of their Skills Development Levy. And it is naïve to believe that a government imposed levy will spur companies on to high levels of learning and talent creation.

In the light of the findings from the strategy and structure dimensions these modestly ‘optimistic’ scores may mask the fact that talent creation may well not be as relevant or as connected to what are already seen as poorly defined, understood and communicated strategic priorities used by management and Human Resources to inform or guide the talent creation process. This coupled with inadequately defined and aligned performance standards and targets may well provide an explanation of why South Africa as a country scores so low on the various competitiveness indexes published annually (as measured by the Global Competitive Survey).

The key issue in need of attention is unfortunately one of the most difficult to change i.e. a mind shift or attitude change about the role individuals play in:

  • Proactive self mastery and development (Agenda item 5)

Table 7

 MBA/Line sample vs. HR/staff Sample 

Overall New Economy Beehive Scores (%’s)

For Talent Creation 

 

Talent creation

Old Economy

New Economy

 

MBA

HR

MBA

HR

Well defined competencies

40.16

44.12

57.83

51.96

Skills transfer by management

45.78

47.06

51.81

50.00

Importance of training budgets

42.17

39.22

55.82

55.88

Self driven training analysis

32.93

33.33

65.06

61.76

Culture of skills transfer

40.96

44.12

55.02

54.90

Depth of skills at all levels

41.77

47.06

54.62

48.04

Efficiency driven by depth of skills

44.18

44.12

53.41

51.96

Proactive self mastery and development

43.78

50.98

53.41

43.14

Total

41.47

43.75

55.87

52.21

 

 # Business disciplines:Line and HR rate their companies moderately low on having a commonly understood strategy process that ensures that the necessary information is delivered to employees in a way that is user-friendly and structured to facilitate the setting of stretch goals, and the solving of problems. These moderately low ratings about business disciplines also serve to reinforce the ratings noted above for strategic practices.

The overall picture that emerges from the ratings for both Strategy and Business Disciplines indicates that the management of performance as a formal business control and motivational process and system is not working for South African companies. This is a clear indication that what individuals and teams do on a daily basis to connect performance to the larger goals, values and cultural practices of the organisation and the needs of its customers is sub-optimised. Again, this may account for the overall low competitive nature of South African companies.

The item that stands out for adding to a strategic agenda for change is:

  • Management (not) skilled in performance (management) practices (Agenda item 6)

 Table 8

 MBA/Line sample vs. HR/staff sample 

Overall New Economy Beehive Scores (%’s)

For Business Disciplines

 

Business disciplines

Old Economy

New Economy

 

MBA

HR

MBA

HR

Commonly understood strategy process

46.59

47.06

47.39

50.00

Formal org-wide performance management system

41.77

48.04

53.82

48.04

Management skilled in performance practices

49.00

55.88

47.79

40.20

Info structured to facilitate problem solving

45.38

49.02

51.41

45.10

User driven design of info, delivery and format

43.37

48.04

52.61

46.08

Info owners operate as service providers

50.60

46.08

48.19

50.98

User friendly provision of info

38.15

36.27

57.03

58.82

Provision of info catalyses problem solving

44.98

50.00

50.60

46.08

Total

44.98

47.55

51.10

48.16

 

# Stakeholder commitment: This requires all stakeholders to work actively towards making the organisation competitive. Both surveys found this to be the highest ranked New Economy practice. Around 60% of respondents believed this principle is actively cultivated by their organisations. This includes a clear process of trying to meet stakeholder interests, the elimination of racial and gender discrimination, and making diverse groups feel valued and respected.

The lowest scoring item with the largest gap between respondent groups is worth noting here as an item that can be considered for inclusion on a value sharing and clarification agenda is:

  • Powerful shared views and values (Agenda item 7)

Table 9

 MBA/Line sample vs. HR/staff sample

Overall New Economy Beehive Scores (%’s)

For Stakeholder Commitment 

 

Stakeholder commitment

Old Economy

New Economy

 

MBA

HR

MBA

HR

Effort to comprehend stakeholder interests

35.74

36.27

59.84

60.78

Balanced approach to meeting stakeholder interests

34.94

33.33

59.04

63.73

Conscious process of meeting stakeholder interests

33.73

36.27

61.85

59.80

Elimination of racial and gender discrimination

25.30

24.51

69.48

72.55

Satisfaction by stakeholders that interests are considered

39.76

45.10

54.22

51.96

Diverse groups feel valued and respected

32.13

31.37

62.65

60.78

Powerful shared views and values

40.16

44.12

57.03

51.96

Commitment to fulfilling rights and accountabilities

39.36

44.12

53.82

50.00

Total

35.14

36.89

59.74

58.95

 

# Pay and incentives: The surveys sought to assess the degree of alignment of pay and incentive systems that attract, retain, and enhance the commitment of people across all levels. Whilst over 60% of the companies recognised that pay is just one way to motivate employees, less than 43% create long-term incentives across all levels, and co-ordinate this with short-term incentives.

Again, the pattern of low scores for 4 out of 8 of the pay and incentive questions paints a gloomy picture of how these performance levers are under-utilised when it comes to the strategic management of individual and/or organisational performance. This coupled with the overall low scores mentioned for Strategy and Business Disciplines above reinforces the fact that South African companies may well be a long way off from adopting the 7 ‘habits’ that account for the long-term success of New Economy organisations. It has been conclusively shown by respected consulting organisations such as Watson Wyatt, Linkage Inc, William Mecer and others that a well articulated pay and benefits philosophy and strategy is required to hang onto scarce talent, boost employee performance.

The 2 items with the least optimistic scores for both respondent groups indicate a need for change in how pay is used to shape and reinforce performance short and long-term.

  • Alignment of short and longer term incentives (Agenda item 8)
  • Long term incentives across all levels (Agenda item 9)

Table 10 

MBA/Line sample vs. HR/staff sample

Overall New Economy Beehive Scores (%’s)

For Pay & Incentives 

 

Pay and Incentives

Old Economy

New Economy

 

MBA

HR

MBA

HR

Pay recognised as one variable in motivation

37.35

36.27

60.64

61.76

Clarity of pay systems and levels across all levels

44.98

53.92

50.60

43.14

Transparency builds comprehension and trust

43.78

47.06

52.61

48.04

Continuous performance feedback & consequence m'ment

47.39

53.92

48.19

43.14

Continuity of performance feedback

47.79

51.96

48.19

46.08

Output based incentive system drives performance

47.39

47.06

50.20

49.02

Alignment of short and longer term incentives

48.79

48.04

42.74

43.14

Long term incentives across all levels

49.39

51.96

39.68

32.35

Total

45.85

48.77

49.12

45.83

 

# Change leadership: Both surveys assessed the degree to which South African companies use proven leadership practices for implementing change, and turning strategy into operational reality that delivers competitive performance. Change leadership involves excelling in the implementation of performance planning processes; communicating the rationale behind changes; adequately developing new skills across all levels of the organisation; a continuous evaluation of any resistance to change; assessing and responding to any problems; and an awareness of the consequences of non-delivery.

The fact that South African companies rate themselves only half as good as their global competitors (see Stellenbosch study) when it comes to embedding a change hardy culture makes for a high risk of business failure in the face of relentless competition from both developed and developing economies. Change leadership fared the lowest among respondents, suggesting a lack of good leaders able to implement change, and translate strategy into action.

The two items critical to a successful management development and change initiative at country and company levels are:

  • Appreciation of and response to human response to change (Agenda item 10)
  • Development of critical mass of line management (Agenda item 11

 

Table 11

MBA/Line sample vs. HR/staff sample

Overall New Economy Beehive Scores (%’s) for

For Change Leadership

 

Change leadership

Old Economy

New Economy

 

MBA

HR

MBA

HR

Excellence of implementation, planning and processes

48.59

50.98

48.59

44.12

Communication of rationale for change incentives

46.18

49.02

51.41

46.08

Appreciation of and response to human response to change

46.99

52.94

51.00

43.14

Development of critical mass of line management

49.00

58.82

47.79

37.25

Adequate development of new skills across all levels

52.21

57.84

44.18

39.22

Ongoing evaluation and response to resistance

47.79

50.98

48.59

45.10

Assessment of problems and responsiveness

53.82

58.82

42.57

39.22

Consequences of non-delivery are in place

49.80

51.96

46.99

42.16

Total

49.30

53.92

47.64

42.03

 

9. Conclusion

The bottom line message that emerges from the current research is that South African business is still far from capable of entrenching the critical strategic leadership and workplace practices required to create a high performance and change hardy business culture capable of rapidly transforming itself to compete in the global arena. The 2 key drivers of business transformation as predicted by the Beehive Model are Strategy and Change Leadership, which are rated the lowest out of the 7 Beehive dimensions.

South African businesses seem to be wavering between what are regarded as New Economy practices, such as flat structures and cultivating empowered, participative employees who have access to information, and Old Economy practices, such as bureaucratic processes.

The added pressure on organisations to accommodate new, unfamiliar challenges and opportunities can be gauged by the degree to which leaders are able and willing to undertake large amounts of transformational change, rather than incremental ‘piece meal’ change. And the jolts will occur more frequently. In the midst of this competitive commotion, there is a growing feeling among leaders that they are simply not able to keep up with the shifting nature of their markets and the ever-evolving requirements for remaining competitive.

The two studies have suggested an 11-point strategic change Aagenda. Line and HR, as partners in change, pretty much have their work cut out for them. The 11-point agenda revolves around the critical few behavioural, people and organisation management practices that are in urgent need of change for South African companies to focus on their journey to becoming globally competitive and change resilient.

References

  • Corporate Leadership Council. 2000. A Higher Calling – Redefining HR’s Priorities in the New Economy. Corporate Executive Board.
  • Craig, Gary. 1999. Improving Organizational Effectiveness Through Systemic Diagnosis. OE Consulting Group.
  • De Smet, Aaron. 1998. Adaptive Models of Organisation for Substance Abuse Treatment. Teachers College, Columbia University, July.
  • Denton, Mario & Bouwer, Ernst. 2003. Entrenching Change and High Performance Through the Beehive Model of Organisational Renewal. University of Stellenbosch.
  • Hagen, Chris & Sivie, John. 2001. The Strategic Alignment Survey. Chris Hagen & Associates.
  • Nel, C, Sacht, J & Lamb, T. 2003. The beehive model: giving CEO’s the right levers to pull to entrench change and high performance. Johannesburg. GIMT, incorporating The HILL School for Business
  • Vaida, Gaenor. 2003. The Seven Pillars of Business Wisdom. Sunday Times, Business Times, September 7.
Gary Watkins

Gary Watkins

Managing Director

BA LLB

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