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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.
This of course is not something that is new – strong leadership has always been a key requirement for all successful companies. However, the directions from which pressures arise regarding either retention or replacement are today often different.
For example, 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. Business leaders must be ready to act in complex, rapidly changing environments.
In a different way, research shows that most companies have not instituted a succession process that covers critical roles and many still lack formal executive succession planning – this was an issue that was often talked about but it was rare that agreed processes were put in place to ensure that it actually happened. However now, due to the imminent retirement of baby boomers and the general increased mobility of people in all positions of an organisation, companies may suddenly realize that their current management teams will no longer be available, sometimes at quite short notice. 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. In many M&A scenarios, the top management and, thus the leadership, of one of organisation is often removed at the stroke of a pen. While there are often many good reasons for this to happen, it can also often result in the real underlying strength of the acquired organisation being destroyed and with it can go the original drivers and raison d’être behind the acquisition.
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.
Changes in the company require 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.
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