2009 Trend 5: Developing the Organization and Leadership of Tomorrow

The borders of the traditional company are fading: depending on the contract, another company can be either a competitor or a partner, or sometimes even both at the same time. The result of this is that companies work together in various combinations: sometimes assignments are fulfilled in-house, and sometimes an assignment is carried out by a team consisting of various partners and/or other external parties. To further develop an enterprise, it is essential to create a network. This is above all a business responsibility.

Leadership

If the borders of the company are becoming less strict, there is a strong need for leaders with a vision, who can tie employees to the company by keeping them aligned to a common goal. The role of HR in this is clear: they must ensure that there are sufficient leaders, and that leadership is enabled to take charge of the changes. Leading a virtual team spread out over several time-zones and cultures in a complex network-environment is completely different from managing an office in one location or within a national context. New business leaders must be ready to act in complex, rapidly changing environments. Research shows that most companies have not instituted a succession process that covers critical roles, and many still lack formal executive succession planning. Due to the imminent retirement of baby boomers, companies may suddenly realize that their current management teams will no longer be available. This poses a direct threat to the future of a company, and puts a lot of pressure on HR to identify the leaders of tomorrow, and to fill this gap with strategies for succession planning and leadership development.

Not only are the borders with the external world fading: the internal side of the business is also undergoing great changes. Due to the financial crisis many companies are involved in major restructuring and cost cutting operations. Because of the influence of private equity and sourcing strategies, mergers and acquisitions are more common these days, leading to a constant need for both integration and separation of business units.

Changes in the company force HR to ensure that employees are treated well during any takeovers or separations. Changes not only have to be implemented, but must be incorporated into the behavior of the employees. Stubbornly doing things as before leads to a company becoming stuck in a rut, and does not bring the desired agility and flexibility. The ability of HR to show leadership during company changes is therefore becoming a crucial asset. If HR has introduced changes within its own department and has shown leadership in adapting to them, this can significantly contribute to how they support changes related to the business environment.