Finding opportunity in the knocks

by 03 Feb 2009

There will be challenges as well as opportunities for HR in 2009, writes Roger Collins

Few managers and leaders have faced challenges of the scale that currently confront Australian organisations. Clearly, experience, wisdom and skill will play a part in the outcomes, but so too will our mindset. The Chinese symbol for change is made up of two hieroglyphs: threat and opportunity. The mindset of business leaders in 2009 will be very important.

Obviously, there is already a strong trend towards threat, danger, prudence and caution. But there will also be oppor tunities for business over the next one or two years; it’s just that we will have to look under different rocks to find them. The winners will be those who balance caution with the search for new oppor tunities and the foresight to build capa bility for the inevitable economic upturn.

Opportunities for business

One consideration is to review the via bility of your goals, strategy and budg ets. Change of the magnitude that we are currently experiencing is likely to place pressure on even a well-crafted 2008 strategy. This challenge presents oppor tunities for development assignment that we can use to grow the next generation of corporate leaders and to engage suppliers and clients to strengthen these important relationships.

Another opportunity is to signal to our clients and customers that we know their circumstances have changed, and we are willing to change our contribution in ways that will meet their emerging needs and sustain the relationship and their longer-term success. There’s good evidence to show that after a downturn, client rela tionships are vulnerable because people look back to see how they were treated during the downturn, so strengthening rela tionships during hard times is important.

Initially this may involve identifying ways in which we can assist to reduce their costs and risks. At the same time, it is expedient to look at how we can add more value to get the depth of relationship that will hold existing clients in the future.

Opportunities for HR

HR also has an opportunity to make a unique and sustainable contribution over the coming year. Putting the business case for retaining talent is one obvious example. While some cost reduction initiatives are essential for survival, too often short-term decisions are made without identifying sec ond order costs, such as rehiring, retraining and damage to your employment brand.

Retention of key talent is critical for positioning organisations to capitalise on the inevitable upturn in the economy. In the interim period, think of the next 12 months as a workout in the gym to become stronger and ready for the turnaround.

A critical and constructive contribu tion that HR can make is to help man agers build resilience, both on an organisational and personal level. Organ isational resilience is the ability to with stand and absorb shocks without becoming distracted from goals, strategy and priorities. Personal resilience is about enabling people to cope psy chologically with increased pressures, more demanding work or the economic consequences with which many are con fronted.

HR can help build resilience by work ing with managers to set up programs that focus on the needs of others, those in more difficult economic or social circumstances. Pursuing higher order goals and the well being of others, can be a high impact and lasting source of fulfilment for people.

Steps for HR

The first response of many organisations to the economic downturn will be to downsize, and a number of organisations have already experienced this. However, there is ample evidence to suggest that that the second order consequences of down sizing can outweigh the benefits in many industries. While for some organisations this course of action will be inevitable. How it is enacted and how the survivors are managed will be critical determinants of the ultimate costs and benefits.

HR has the opportunity to take a lot more initiative than it has in the past. Fail ure to respond effectively and visibly may carry a high cost for the reputation of HR managers and occupational groups. In peri ods of major disruption, senior managers will be more demanding, more critical and more willing to look for qualitative new solutions to the threats posed by the cur rent economic circumstances. However, adversity is potentially a great catalyst for reinvention and renewal, so the next 12 months and beyond offer us great oppor tunities to evolve our role and contribu tion. Are you up to the challenge?

Roger Collins is Professor Emeritus of the University of NSW, Chairman of national accounting firm Grant Thornton and a member of Human Resources Leader’s editorial board