Date: 04/12/07 Duration: 00:17:01
In this podcast, HR professionals who have lead a major restructuring of the HR function within their organisation discuss the challenges they faced and the lessons they learned along the way. The participants are Vanessa Robinson, CIPD’s Research Manager, Organisation and Resourcing, Kevin White, HR Director at the Home Office, Maureen Robson, Principal Consultant in Fujitsu’s Business Consulting HR Practice, Sharon Ellerker, Nortel’s HR Leader for Europe, Middle East and Africa and Stephen Smith, HR Director, Wholesale & International Banking at Lloyds TSB group.
Philippa Lamb: Hello and welcome to our podcast looking at the changing face of the HR function. In our last programme, we looked at the HR challenges associated with globalisation. However, as we'll hear in this programme, there are many more factors driving significant changes in the ways HR organises itself to deliver objectives for the organisation.
Our latest CIPD research report, "The changing HR function", looked at these drivers for change, the structural outcomes and the way the roles and career paths of HR professionals are changing as a result.
In this podcast we'll be hearing from a number of HR directors who have delivered big changes in their organisations' HR function. But first we spoke to CIPD organisation and resourcing adviser, Vanessa Robinson. She led the CIPD research and we asked her to set the scene.
Vanessa Robinson: Recent research at the CIPD looking at the way HR functions are changing has actually highlighted that over 50 per cent have reorganised in the last year, and something like 80 per cent of organisations have gone through some sort of change restructuring in the last five years. So, yes, there's a phenomenal amount of change that seems to be going on.
PL: What's prompting this?
VR: Well, I think one of the main drivers is HR functions really trying to operate more strategically and one way they think they can do this is to look at their own internal structures. A lot of them have introduced the so-called Ulrich model, which includes business partners, centres of expertise and some form of shared service. And I think through that combination what they're hoping to do is the business partners give them the strategic element, the shared services can drive out efficiencies and make them operate more cost-effectively and in that way they think they can do more for less money.
PL: Interesting, but does this type of change apply to organisations of all sizes?
VR: I think there is a lot of change in all organisations, but I think the move to introduce this Ulrich type of change is possibly something that is much more focused or geared towards large organisations, which makes sense just because of the scale and the size of the HR function. Smaller organisations I think are changing their HR functions, but not necessarily towards this Ulrich model.
PL: You can find out more about the CIPD research in the notes that accompany this programme at cipd.co.uk/podcasts.
One organisation that has experienced a lot of change is the Department for Work and Pensions. They don’t come much larger than the DWP, employer of over 100,000 people. I caught up with Kevin White, now director general of human resources at the Home Office, but previously HR director at the DWP. I asked him about the big changes he made to the HR function there.
KW: We started in the organisation as a whole in setting out a clear vision for how we wanted to develop, to talk about the new direction of the department, to talk about the creation of new agencies, to talk about our aspirations for improved customer service and for improving the underpinning services that support and enable that.
Inside the HR function, actually following Jim Collins' advice, I started by getting some good people around me, which is always more reassuring than thinking you have to make it up yourself. And we set a very clear vision for how we wanted HR to be. We got change partners in to support us to drive that forward. We put in place a huge programme of restructuring and service improvement, but it started with having the right people.
PL: For Kevin, recruitment clearly played an important part in the delivering the changes he wanted to see. Our research into the changing HR function found skills gaps are a particular challenge for many HR functions as they strive to play a more strategic role. I asked Kevin how this affected him.
I wanted to ask whether you encounter skills gaps in implementing this strategy. It sounds as if you did if you had to recruit as you went.
KW: What we suffered from was kind of an attitude gap almost. The people we had in the function were often very clever, very talented, very committed, worked hard, a lot of them CIPD qualified. They weren't dummies, if you like, by any stretch of imagination. But what they hadn't done was to work in a context where HR is a slave cylinder to the business, if you like, and is actually so engaged in the act of changing the way you go about and deliver your services, supporting line management, rather than a slightly more old fashioned culture of owning the rule book. They hadn't done that and we found it much easier to bring in people who had worked like that in an environment we wanted to create because our people learnt much better by seeing what they could do rather than being told what they could do.
So we had skills, we had HR skills, we had qualifications. What we didn't really have was an HR function that saw itself as the right kind of business partner top to bottom.
PL: So far, we've heard about the influences that are driving HR to be more strategic, and we've had a taste of how it's responding to that challenge. Now we're going to look in more detail at others' approach to the changing HR function.
Maureen Robson oversaw a major change in the HR function at Fujitsu. She shared her reflections with us.
MR: Certainly, the lessons learnt that I picked up when I undertook the review were that the reduction in headcount was realised too quickly and there was a lot of loss of knowledge from the business and also in terms of actually building skill sets and training people and getting them trained up in the customer services environment. We had a lot of challenges around that, I believe, and it did take us about six to 12 months to iron those out.
PL: Nortel faced some similar challenges when they undertook a global project with a huge impact on HR. Their HR leader for Europe, Middle East and Africa, Sharon Ellerker, talked us through the lessons learnt to-date and how those lessons are shaping the next steps.
SE: From the business case perspectives - and I actually led the project globally and it was my job to make sure we delivered on the business case and we kept those in mind as we progressed across the project. We have achieved those. I think where we still find that we perhaps have some challenges is more around a cultural acceptance of a new way of working. I see that more in certain parts of my regions. It seems to be that the further east you go, there is, perhaps, a demand and an expectation for more high-touch, face-to-face, personal HR contact and we're not organised or structured to support that anymore. I think just getting people over time to become accustomed to a new way of working has perhaps taken longer than we anticipated in certain geographies.
PL: So, the big question: What would you do differently? Tell us about your mistakes.
SE: Oh, that multimillion dollar question. Hindsight is a wonderful thing. Our project was global in nature. Our timelines were very aggressive – we did everything from beginning to end in 16 months and because of the degree of the technology-side of the project that was an aggressive timeline. If we were to do things differently? I think within the context of the project, it would have been nice to have had more time to do some user acceptance testing of the solutions we were deploying, particularly the self-service tools. And then, I guess, post-deployment, it would have been nice as well for us to have had the luxury of a little bit more time to transition the HR organisation to be able to help embed the change within the business. As we deployed new processes and new technology, we also radically re-shaped and re-organised the way that we were structured within HR and also saw a near 20 per cent global reduction in headcount and I think, in hindsight, we would have probably embedded the change more quickly if we hadn't been so aggressive in our own transformation organisationally, and it probably meant that the overall transition took longer than it would have done than if we had had everyone in place to support the change.
PL: We've already heard from Kevin White about the challenges he faced plugging skills gaps when he was restructuring at the DWP, but what other obstacles did he face?
KW: Our work force had to reduce by 30,000 from 130,000 to 100,000 so we had to manage the psychology of that. We had a working partnership with our trade unions; we had very powerful public sector trade unions so there were all sorts of significant issues of that kind to address.
We also had to, I think, work in an environment where, to characterise it, line managers didn't really want to do HR and HR didn't really want line managers to do HR because they thought it was their job, so you've got a kind of vicious circle and we had to create a positive circle where line managers understood that the role of HR was to be at their shoulder, supporting them, advising them, providing expertise in all sorts of ways, not doing that part of their role for them, and that's a huge cultural change which still needs to be made across many parts of the public sector, and probably other sectors as well.
PL: Our research into the changing HR function picked up on this balance of responsibility between HR and line managers. I asked CIPD adviser Vanessa to tell us more about the impact this is having on HR.
We seem to be hearing more and more about HR departments polarising into these two activities. On one end you've got strategic people thinking about the business, the core business objectives of the organisation as a whole, and at the other end there's the day-to-day managing of people and administrative matters. Are you seeing that more widely now, rather than the whole thing being in one melting pot together?
VR: I think we are seeing some interesting polarisations. That's one example where you've got the people being more strategic and then the more general people management. We're also seeing the people management activities as well more and more being done by the line and not necessarily being within the remit of people working in the HR function. That gives some interesting new challenges and I think that's why people are reorganising, or rather, they're struggling when they're reorganising is because, actually, it requires possibly new skills and capabilities for people in HR and also people in the line who are maybe having to take on people management activities that they previously didn't have responsibility for.
PL: It's an interesting question where you draw that line, isn't it? Where does the responsibility for actually managing real people working in the organisation lie? Is it in the HR team or is it the line manager?
VR: Different organisations really do address this differently because in some organisations they don't think that they're line managers have the capabilities and are happy to have more people within HR. That model works for them, whereas in other organisations they do believe very strongly that people management is what every manager should be doing; it's part of their management responsibility. But I think as long as both HR and the line understand what each of their respective roles are, then they should be able to work effectively toward the ultimate goal of getting better business performance, but it's when tensions start to exist between the line and HR, or there are misunderstandings, that possibly you don't start to get the best people management results effectively.
PL: Getting line managers to take on responsibility for managing people well is one side of the equation, but for Lloyds TSB HR director,Stephen Smith, HR's direct role in delivering wider business objectives is at least as important.
You obviously do have very strong views about how HR should fit in to your business. Don't see it as an add-on, don't see it as a support service, but see it very much as a part of the business. How are you making that happen?
SS: For me the really critical thing is that HR isn't actually a partner to something, it's a partner in something and that something is a business. So it's really, really, really important, I think, that people understand that thinking commercially and demonstrating commercial competence is actually what gets them that desire to seat at the table, it's not being an HR practitioners. That's a kind of given that people in the business expect you to have.
PL: So how are you giving them that understanding of the business?
SS: Well, I think they key thing is actually to show people that there's nothing that difficult about it so what I've been doing is spending my training budget on things which have nothing to do with HR at all. I've been teaching people how to sell, how to prospect for leads, how to network and network commercially. I've been teaching them how to become creative and innovative and how to prospect for new business. And guess what – HR people can do it perfectly well.
PL: And do they do it?
SS: They do do it. There are loads of great examples. I have HR people now who are bringing in new business for Lloyds TSB – not instead of doing their day jobs, but just as part of doing their day jobs and it earns them a different kind of respect and a different kind of value in the business that they're a partner in.
PL: Just going back to the way you've been training your HR people into the business. It just occurred to me – obviously traditionally we've seen people coming out of businesses and into the HR function. Are you expecting some of your people to perhaps go the other way now? You might lose some of your HR people into core banking roles.
SS: I really hope that happens. To me, HR as part of the overall executive career path is a really important statement of success. At the moment, to say to HR people "acquire commercial skills and it will stand you in good stead" is one thing, but if I can't show them that people from other parts of the organisation see working in HR as a valuable piece of development and a valuable step on their career path, then I haven't done the whole job. I actually have people moving into HR from other parts of the business. What I've got to do now is to show them that, in time, I can successfully help them to move out. And I've already demonstrated that HR people can do the selling bit. I've got the proof!
PL: And how will you measure success when you've done it?
SS: I think some of the key measures for me will be some of the great ideas and some of the great innovations around a big organisation like this one will actually become evident and more widely used across the whole business and that for me will be the tick in the box, that will be the sea change.
PL: An interesting perspective from Stephen there and there's clearly a lot of change taking place in the shapes and roles of HR functions. We've heard from HR professionals who have been through such change processes and touched on some of the lessons they've learnt, but what does the future hold? I asked Vanessa to summarise the pointers in the CIPD research.
VR: Well, I think certainly, the level of change, my guess is anyway, will stay pretty much at this high level for the coming years. Mainly because these changes aren't actually quick fixes and so just by the level of activity going on this year or in the last year, I don't think those are all complete. I should think most of them are work in progress. Beyond that, my guess is the level of change, restructuring, is going to stay at quite high levels. As organisations change themselves, HR will continue to need to respond to change as well as to lead it itself. So I don't see much fall-off.
PL: Whether it's responding to it or leading it, it seems fairly clear that change is going to play a continuing role in the lives of HR professionals, not least in shaping the structures and roles of the HR function itself. If you're grappling with any of the issues covered, then you can find out more in the notes that accompany this programme at cipd.co.uk/podcasts, including more details of the research Vanessahas been talking about.
In our next programme, we'll be giving you a new year look at the trends and challenges likely to be having an impact in 2008, based on interviews with some of the biggest names in HR. Until then, goodbye.