All corporate functions receive shocks and change drivers – from the market, the economy, the pandemic, or from leadership. Why do some functions weather these shocks better than others? Why is it that many recruitment and other HR functions, when confronted with these shocks, falter and fail to perform effectively?
If we think about change as a multilevel process with some levels changing faster than others, we can begin to understand why this happens.
I quote from a recent article by Stewart Brand:
“In recent years a few scientists (such as R. V. O'Neill and C. S. Holling) have been probing in ecological systems: how do they manage change, how do they absorb and incorporate shocks? The answer appears to lie in the relationship between components in a system that have different change-rates and different scales of size. Instead of breaking under stress like something brittle, these systems yield as if they were soft. Some parts respond quickly to the shock, allowing slower parts to ignore the shock and maintain their steady duties of system continuity.”
Think about a function made of separate components or layers that operate differently and have different speeds of change. Each layer is also to a degree independent of the other layers but each layer impacts the other and they all influence each other. For example, demand for talent influences sourcing, sourcing influences the recruiter’s ability to present a candidate, the technology they use can slow or speed up that process. A recruiter’s skills in influence and persuasion and her ability to assess a candidate impact speed and quality.
According to Brand, each layer reacts at a different pace. Fast layers initiate change; slower layers remember the change and absorb the shock. Fast is fleeting but get things moving; slow lasts longer and puts the changes into action. Fast is usually smaller and is moderated by slower and bigger layers beneath it which gives consistency and strength.
We pay attention the most attention to the fast, but the lower and slower layers have the sustaining power. Without the lower layers, there is rapid but unsustainable change. In these cases, the function cannot absorb the shock and falls apart.
Corporate functions, including recruitment, for example, are made up of at least five layers.
Demand for Talent
The first is the demand for talent. It is the direct response to market drivers. The second layer is technology, and, in the case of recruitment, it includes all the tools that aid in finding and hiring talent. The third and fourth layers are the structure and the underlying corporate and talent culture that make up the function. The final layer is the overall resilience and strength of the industry.
Recruitment leaders are influenced greatly by talent demands and the talent market and the promise of technology to provide a quick solution to a competitive challenge. Frequently a disproportionate number of resources are focused on quickly acquiring and implementing technology to service the demand and to compete with competitors. As is also often the case, the technology does not live up to its promise, costs more, and takes longer to implement than planned.
Structure & Culture
However, these layers of demand and technology push the function into new thinking and stimulate change. If unchecked, they can lead to failure, but if the overall structure of the function is solid, it creates stability and absorbs some of the initial euphoria, tempering it and slowly incorporating it into the function where appropriate. This is why having an effective structure, good processes, as well as a stable and well-articulated talent culture, are essential to long-term success.
Structure and culture are the restraining forces, pushing back against the change layers of demand and technology. These layers change slowly and provide stability, absorbing the shocks of change. And underlying all the layers is the overall industry and function maturity and resilience.
Let’s give an example of these layers in action.
A large recruiting function in a global company is facing a demand for increasingly hard-to-fill software engineers. The sourcers are working overtime to locate top talent and attract it to the company. Because of the demand pressure and need for speed, they turn to software and other tools to help them source, assess, and engage top performers. The tools they use are new. Many are barely out of beta testing and may not work as well as advertised. They spend inordinate amounts of time learning to use the software. Sometimes the software may deliver exceptional results, but at other times it may not. There will be bugs and implementation issues that take time to solve and remove the sourcers and recruiters from finding and assessing the candidates they need. In extreme cases, more and more time and effort are expended trying to use the tools and things begin to get out of control. Hiring managers are not happy, time to fill goes up, and candidate engagement goes down.
If the overall structure of the function is stable and is built on the corporate values, if there are good policies and processes in place to compensate for whatever errors or issues arise from using the new software, the function will slowly adapt to the technology, use it better and better, and continue to provide suitable candidates and remain on-track. Structure is like the bones in your body, giving strength and shape. Values and talent philosophy provide guidance on behavior and how to respond.
But if the underlying structure is weak or disorganized, or if the function is moving away from the fundamental values of the company, the entire function may fail. In this case, the culture and structure provide the continuity and integrity to grow with the new software and slowly incorporate it into the way they work.
This model also provides a way to understand why change efforts are often not successful. Revolutions are rarely successful unless they build on existing structures and cultures. When changes are made at the superficial top layers without giving time for the structure to absorb it, the change will be short-lived or lead to failure. It is essential to understand that change takes time to filter into the structure and get incorporated into a modified way of doing things. Evolution is a more successful practice. The changes need to be aligned with the underlying culture of the organization, as well.
The industry itself also provides stability. When the function is in an industry with resilience, it will be more likely to succeed.
The financial crisis a few years ago is an example of an industry that was already in flux with the advent of new trading methods and practices as well as legal changes. We can see that specialized financial software, as well as new employees with quantitative backgrounds, were introduced quickly on top of a traditional structure that could not absorb the changes fast enough. Many actions taken by leadership were contradictory to the culture of these institutions and the entire financial services industry was in the midst of change and lacked overall stability. Failure was virtually a given as the lower layer could not absorb the changes fast enough.
As a leader creates or builds a function, large or small, it is useful to keep this model in mind. When introducing new software or practices, allow time for filtering to take place and allow the structure and other layers to adapt to the new. Rapid change is often touted as necessary for survival, but in reality, rapid change most often leads to collapse. Quick is not always good.