HR's Role in Business Turnarounds

5. Overcome obstacles: A European
producer of machine tools, laser technology,
and electronics was facing a 40
percent drop in sales during the 2008
recession. Company leaders were
firm that no associates should be laid
off. But how else could this company
make it through this economic hardship?
The HR function managed a plan
to reduce work hours for all associates.
Associates responded very positively
to the company preserving their
jobs when so many others in their
region were being laid off. “Tightening
our belts is a much better alternative
than losing our jobs,” one associate said.
The silver lining in this dark cloud was
revealed when the recession ended and
the company could immediately go back
to full production. Other companies,
who had laid off experienced workers,
now had to hire new employees
and wait for them to get up to speed.
This company’s sales increased 50 percent
in the first year of its recovery
6. Celebrate success and inspire continuous
improvement: A leading pharmaceutical
company, led jointly by its president
and HR leaders, invested heavily in
changing the mindset of its top leadership
echelons from being “good managers”
to being “effective leaders.” Twelve
months later under the new leadership
focus, a record sales year was celebrated.
The next year, the company went even
further, implementing a process in which
each of its top 250 managers aligned
their key priorities with specific points
in the company mission and with priorities
of their functional colleagues and
their cross-functional team colleagues,
and with their boss. This tight alignment
with the mission delivered yet another
record sales year and a growth rate
four times as fast as the global market.
Essential HR Competencies That
Drive Turnarounds
Drawn from these case examples, here
are four essential competencies for HR
professionals who coach and consult with
business leaders who seek a turnaround:
• The Competency to Diagnose: the
ability to see what others may miss in
how the organization is really operating
and to identify the multiple cause and effect
streams that affect the bottom line.
• The Competency to Apply Organization
Theory: an understanding
of the theories, research findings, and
practical experience that can predict
how people will work together in a
variety of situations and the ability to
apply this understanding in a practical
way that delivers improved results.
• The Competency to Design High
Performance Organizations: knowing
the results of past experiments with
organizational form in motivating and
regulating work interactions so that
reshaping strategy, processes, systems,
and structures produces better results.
• The Competency to Coach Business
Leaders in the Dynamics of a Turnaround:
knowing the organizational
dynamics around change, the emotions
that change brings out in people, and
business leaders’ personalities so that
your advice, coaching, and feedback will
help make the turnaround a success.
Review the following table to glean a few
more ideas of how you might add value
to your leaders’ turnaround attempts.
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