One year later: Where HR transformation is really starting 

Individuals and teams adopt new tools and change how they work faster than formal operating models change. In many organizations, leaders are integrating AI into existing structures rather than redesigning those structures wholesale. That does not make operating model transformation less important – it changes where the transformation starts.

In practice, organizations can change how HR serves the business, improve employee experience, and rethink roles and capabilities without first undertaking wholesale structural redesign.

1. Start with the business outcome.
2. Redesign the work before the structure.
3. Prove the value, then shape the operating model around what the work now requires.

When HR leaders rethink or modernize the function, they rarely start by asking for a new organizational architecture. They ask more practical questions, such as:

• What does the business need from HR now? 
• Which outcomes matter most? 
• Where can HR improve productivity or employee experience? 
• Which workflows need to change? 
• Where should AI augment people or take on work? 
• What capabilities does HR need to provide?

Start with what the business needs to accomplish. Then examine the work and workflows that deliver that outcome. Decide where people create the most value, where AI or automation should augment them or take on work, and what technology and capabilities the organization needs. Follow those choices into services, economics, roles, governance, and ultimately, structure. The practical path to changing the operating model starts with redesigning the work.

Several ideas behind Operating by design still feel especially relevant, including the need to deliberately redesign human-machine work and build for adaptability. The task now is to make those ideas operational. 

For each priority workflow, HR leaders need to decide where human judgment creates the most value, where AI or automation should augment people or take on work, what technology and expertise the organization needs, and how the economics change.

Operating by design anticipated much closer integration between HR and IT, with traditional boundaries becoming far less distinct. A year later, that direction still matters, but the practical implication is clearer: closer integration does not require one structural answer. Some AI-enabled work can sit directly within HR, while more complex use cases require deeper technology, data, security, and AI expertise. 

The goal of closer HR-technology integration is not structural integration for its own sake – it is to ensure HR and technology leaders can align priorities, make decisions, fund the right work, and bring the right expertise to the use cases that matter most.

The same discipline applies to value. AI deployment is not the same as value realization.

The question is not simply where AI can be deployed. It is where changing the work creates enough value to justify changing how the work gets done. 

That value can show up in business outcomes, productivity, capacity, service, employee experience, or cost. HR leaders should define the expected value up front, understand where it will show up, account for the new costs the redesign creates, and identify what must change to capture the return.

For some organizations, traditional cost levers such as outsourcing, offshoring, and service-delivery changes remain more tangible than AI-driven efficiency today. AI expands the set of choices, but technology alone does not determine which choice creates the most value.

As human and AI work become more intertwined, HR also needs stronger fluency in the economics of a blended workforce: the total cost of work and where people, automation, and AI each create the greatest value.

If work, technology, roles, and skills keep changing, HR cannot treat transformation as a once-every-few-years exercise. 

HR needs a standing capability to continually reshape work and the workforce.

One way to think about this is as a work and workforce foundry: a capability that identifies where work should change, redesigns workflows and human-AI interaction, tests new tools and ways of working, assesses the workforce and economic implications, and determines what to scale.

Doing this well raises the bar for HR itself. Strategic and business acumen, analytics, AI fluency, work design, and workforce capability building become more important as transactional work changes.

The challenge is to make reinvention part of how HR operates – not something it mobilizes around periodically. Doing that can also give HR the experience and credibility to help the wider enterprise rethink how work gets done.

For CHROs, the question is: Who owns the ongoing redesign of work and workforce as business needs and technology continue to change?

One year later, the path to changing the operating model looks more practical than architectural. Start with the business outcome. Redesign the work. Prove the value. Then shape the operating model around what the work now requires.