A recent survey by Ashridge Management College shows the extent of the process. Most of the 140 European companies that responded to the survey said they were already implementing substantial change initiatives. Their priorities are overwhelmingly concerned with the three 'C's' of business - cost, customers and competitors.
Recession, overcapacity, aggressive international competition and the impact of technology have combined to focus attention on the short and medium term - away from the longer-term, vision-building indulgences of the late 1980s.
Too many European companies find themselves in the unenviable position of being the high-cost player - and not by small margins. Others have learnt from benchmarking exercises that their reputations for product quality and customer service are not keeping pace.
More research by Ashridge in 1992 revealed the disappointing results from many total quality initiatives undertaken by European companies over the previous few years. While companies continued to struggle to improve their quality performance, their best competitors, often from outside Europe, were stealing a march on the increasingly key competitive factor - time.
'Time is money' is a phrase familiar to us all, yet only now are we beginning to realise its full significance. Across all industries response times are declining rapidly - whether in product development, cycle time or customer processing time. Immediacy is the goal.
But the Ashridge research shows that in the drive to improve performance, most companies are placing the development of their staff at the top of their agenda - usually for the first time.
They recognise that radical changes will not be achieved through restructuring alone. About 75 per cent of the companies interviewed have significant people-development initiatives in place, and their priority is to use executive development to bring about organisational and cultural change. Most companies are integrating people-development priorities with the strategic and short- term priorities of the business much more effectively.
This may sound obvious common sense, but experienced human resources practitioners know how difficult this has been to achieve in the past.
However, while the benefits of achieving competitive advantage through the development of a company's human resources are now more widely appreciated by management, other circumstances are creating a profoundly different environment in which development has to flourish.
Long gone are the cosy notions of structured career progression, a job for life, long-term grooming of an elite for more senior positions, extensive in-house training resources and big development budgets.
Emerging to fill their place is a delayered, decentralised and re-engineered corporation, adapting to change with no guarantees for survival.
Paradoxically, human resources professionals often find these circumstances beneficial in the development of employees. Ashridge's findings support this view.
At long last we are seeing people development as a top priority of line managers. We are seeing a decline in traditional expert-led and knowledge-based training, to be replaced by more interactive and experience-based learning. We are seeing far more attention given to helping individuals to improve their skills and performance. And we are seeing a growing insistence on the returns on development investment to be measured more tangibly.
As executives take more responsibility for their own learning, we are seeing the emergence of a new wave of self-managed development projects.
TSB and Guinness are two organisations in the UK pioneering these flexible approaches to development that are designed to empower employees to strive to achieve their full potential.
While British industry lags behind technologically in a number of sectors, its pragmatic and creative approach to executive development is one area where it demonstrates a competitive edge over most other countries.
If Michael Porter had extended his analysis further, he might have identified this as a strength of Britain in his best-seller, The Competitive Advantage of Nations.
Best practice in executive development - as shown by several leading British companies, management development centres and business schools - is now setting the pace for leaner, flatter and faster development.
The author is Dean of Ashridge Management College.Reuse content