Human resources at the centre of organisational transformation

Political, technological and social disruption is redefining the role of Human Resources. In this analysis, Peter Wollmann examines how HR has moved from an administrative function to a central strategic force, shaping leadership, talent and organisational capability as organisations navigate sustained transformation in volatile and hybrid business environments

Political, social, technological and environmental disruptions are forcing companies to undertake fundamental change in order to remain competitive. Business conditions are becoming harder to predict, transformation journeys more frequent and more complex, and established models of success less reliable. In this environment, Human Resources (HR) has moved decisively from a largely administrative function to a central strategic and operational role, responsible for selecting, assembling, developing and sustaining the human capabilities on which organisational resilience increasingly depends. This article explores the facets of the emerging HR profile required to meet these demands.

Companies now operate in a world characterised by volatility, uncertainty, complexity and ambiguity. Transformations are no longer discrete projects with defined endpoints but ongoing processes that often unfold in unfamiliar and uncharted territory. Success depends less on optimising existing systems and more on building organisational capabilities that allow companies to adapt, learn and reposition themselves over time. This places Human Resources at the heart of corporate strategy, particularly in the selection and development of leaders and the formation of high-performing teams capable of navigating sustained change.

Several structural disruptions have intensified the demands placed on HR and reshaped its role within organisations:

• Demographic challenges and the battle for young, well-educated talent
  HR must find solutions to persistent shortages of skilled workers, particularly in innovative and fast-evolving fields, and secure access to talent, often on a global basis. Increasing emphasis is placed on individuals with a strong transformation mindset, curiosity, willingness to learn, flexibility, pragmatism and the ability to collaborate. As the interface between organisations and the labour market, HR plays a decisive role in shaping employer attractiveness through compelling narratives and credible use cases, often embodied by enterprise ambassadors.
• Far-reaching technological disruption, especially in artificial intelligence
  HR must support managers and employees in understanding and applying new technologies, particularly AI, while also recruiting new talent that is confident in digital environments and committed to lifelong learning. This includes building mixed teams that combine deep business experience with emerging AI expertise. In parallel, HR increasingly assumes responsibility for defining ethical frameworks governing the use of new technologies, including their application within HR processes themselves, such as candidate selection.
• Growing sensitivity to societal and environmental purpose
  Employees increasingly expect organisations to demonstrate credible commitments to sustainable and responsible business practices. HR must translate these expectations into internal culture and external positioning, developing narratives that reflect shared values and enhance the organisation’s profile in the labour market.
• Rising demands for expanded and flexible leadership styles
  The growing number and variety of simultaneous transformation initiatives require leaders to operate with a broader repertoire of styles and behaviours. HR is increasingly expected to embed what might be described as a travelling organisation mindset across the business, enabling leaders to apply different leadership approaches in parallel and to develop new skills appropriate to changing contexts.
• Increasing ambivalence and hybridity of future organisations
  HR must develop the organisation’s ability to manage established core business alongside new and often uncertain innovation initiatives. This requires operating across so-called brown and green fields in parallel, where mindset frequently proves more important than formal methodology.

Research into organisations operating in a permanent state of flux emphasises the importance of rapid adaptability and continuous interaction with markets and customers, particularly in environments defined by ongoing change. Taken together, these pressures amount to a multifaceted transformation of the HR function. Organisations are confronted with new customer profiles, new managerial and employee skill sets, new business processes and new forms of collaboration within increasingly fragmented, hybrid structures. As organisational capabilities become the most critical strategic success factor, HR moves decisively into the role of strategic partner after many years in which it was often perceived primarily as an administrative function.

In the specific context of artificial intelligence, HR must adopt several perspectives simultaneously. On the one hand, it must track the broader evolution of technology and the critical public debate surrounding its use. On the other, it must continuously assess the effectiveness and efficiency of AI applications within the organisation, including those deployed in HR systems, and adjust accordingly.

As with previous technological shifts, progress depends on avoiding fundamental resistance as well as exaggerated expectations; measurable outcomes remain the ultimate benchmark. Innovation is not driven by technology alone. Developments in engineering, life sciences, software, robotics and data management, including big data, continue to reshape organisational capability requirements, reinforcing the need for HR to understand the broader impact of innovation beyond any single technology.

The HR journey, which increasingly leads through unfamiliar terrain and, at times, true terra incognita, involves navigating fundamental dilemmas that cannot be resolved through tools, methods and data alone. One concerns the loss of control and the absence of precedent. Business environments no longer develop in linear ways, and organisations must accept that paradigm-shifting events can arise whose consequences cannot initially be managed in detail.

Established recipes offer limited guidance, and historical data often provide insufficient support. A more exploratory mindset is therefore required. New hires should already display such an orientation, while existing leaders and staff must be supported in developing it. For HR, this represents an ongoing exploration undertaken alongside the business itself, demanding flexibility and adaptability.

A second dilemma lies in organisational ambidexterity. Organisations are increasingly required to build viable new businesses while simultaneously sustaining existing operations. This raises questions about balancing cost efficiency and innovation, preserving the core business while investing in future growth, and pursuing contradictory strategies in parallel. Managing hybrid organisations with distinct cultures and performance expectations requires careful composition of teams capable of cooperation across these boundaries. A comparable challenge has existed for decades in the form of ambidexterity between line and project management, which has become even more pronounced during large-scale transformations. Organisations must determine how to allocate limited leadership capacity across core operations, innovation initiatives and time-critical transformation projects. HR plays a central role in mapping existing capabilities to these competing demands and in developing or acquiring the profiles required to sustain them.

A further challenge lies in developing a credible yet flexible vision of the future in a volatile, uncertain, complex and ambiguous environment. As organisational capabilities increasingly determine competitive success, HR assumes a more strategic and operational role and, at times, risks becoming a bottleneck within complex organisational contexts. To address this, HR itself must undergo significant transformation and develop a higher level of HR excellence. It must contribute to developing plausible but adaptable visions of the future, often based on scenario thinking and back-casting approaches that work backwards from potential futures to identify necessary actions and milestones.

Conclusions and take-aways

Human Resources must evolve and internalise several core principles:

• HR as a strategic corporate function
  Human Resources plays an indispensable role in transformation by assembling the teams that shape organisational outcomes in the short, medium and long term. Errors in HR strategy and implementation can have lasting negative effects. As the interface between organisations and labour markets, HR is central to employer attractiveness and the global competition for talent.
• HR as shaper of innovation, engagement and leadership
  HR must shape the integration and operation of innovations such as artificial intelligence, robotics and data management. It must sustain motivation and engagement during demanding transformation journeys through effective internal communication, and play a decisive role in leadership development, culture and practice. Leadership competence represents a particular strategic success factor and must reflect a mindset suited to disruptive conditions.
• HR as contributor to future vision and strategic coherence
  HR must contribute to developing credible visions of the future grounded in organisational realities and informed by scenario thinking. This requires a deep understanding of business models, technologies, customers and processes, positioning HR as a cross-functional partner rather than a purely administrative unit, and ensuring that HR topics remain firmly on the management agenda.
• HR as steward of knowledge and capability in demographic change
  In the context of demographic change, HR must ensure that critical knowledge is retained as large parts of the workforce approach retirement. To fulfil this role, HR itself must continuously develop new skills, capabilities and ways of thinking, including within its own ranks, in order to meet the demands of sustained transformation.

Further information
Produced with support from Peter Wollmann, an independent consultant specialising in strategic transformation and organisational development. With more than 40 years’ experience, he has worked with companies and leadership teams across sectors including financial services, engineering, IT, real estate and academia, supporting large-scale transformation programmes and the development of change and leadership capabilities. He also serves as lead editor and contributing author within a global author community whose work has resulted in eight Springer Nature publications over the past six years, grounded in a meta-level thinking framework referred to as the Three-Pillar Model. For further information, visit www.peterwollmann.com.

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