Business transformation becomes no more than a buzzword if organisations aren’t brave enough to invest in radical change.

No matter how well-intentioned leaders are in developing their roadmap, their efforts will fail unless they are willing to take on a massive and radical change, according to Vineet Nayar, founder and chairman of Sampark Foundation and former CEO of HCL Technologies.

“Does intention turn into transformation?” Nayar asked his audience at the World Human Resource Congress in Singapore. “When you want to transform, the question [you need to ask] is, are you willing to give up the old?”

Genuine transformation: a radical approach to bonuses and appraisals

Nayar provided two real-life examples of transformation – first, giving bonuses to staff and, second, reversing the CEO performance review process. Both cases sparked genuine change in his company at the employee and leadership levels.

“The first decision we took was that 100% of the bonuses of all employees was guaranteed. The moment you guarantee [bonuses], it unlocks energy in the organisation. It’s crazy,” he recounted.

As CEO, Nayar proved to his team he had skin in the game when it came to driving radical change from the top.

“The appraisal system was reversed,” he said. “My appraisal was done by undercover employees in a confidential fashion and the results were made public for all to see.”

Nayar’s case studies exemplify the balance between motivation and accountability as two necessary elements of change – yet both had a profound impact on how team members performed and how they perceived leadership.

But while most leaders are often highly optimistic about their pursuit of transformation, Nayar provided a different baseline for success. “The journey of transformation doesn’t start with what you want to be. It starts with what you don’t want to be,” he said.

Nayar cautioned people against the tendency of many to be overly ambitious with their intentions to change without following through with concrete action. Or, for those who do choose to execute on their strategy, the tendency of playing it safe.

Most execution strategies fail because “most of our ideas are incremental [yet] we call them transformation,” he said.

The role of HR in business transformation: ‘Inspire, don’t manage people’

The call to radical transformation comes down to a company’s people-centricity. Ultimately, HR professionals are key to change management because they work closely with agents of change. That is, the employees.

No matter how much change is introduced – at any level of the organisation – HR will need to bring out the best in their human capital for transformation to succeed, Nayar suggested.

“The world has changed,” he said. “Today, the emphasis is on innovation, ideas, disruption, and the application of those ideas and, for that, you need people.”

If organisations want to build on innovation that makes an impact, they shouldn’t so much as “manage people” as they should “inspire people”.

Similar to Nayar’s example of handing out bonuses to 100% of his employees, HR should find a way to motivate their team members, so much so that they would “jump out of bed” every morning wanting to come to work, he quipped.

“The only people who can do that are the HR folks because we are trained to understand human capital and human behaviour and to get the best out of it,” Nayar said.