CIPD Podcast 31 - Making change work: part 2

Date: 01/06/09 Duration: 00:24:07

This podcast takes a more in-depth look at how CIPD case study organisations implemented a change process and the measures they took to achieve change. Victoria Woodison, HR Director, UK & Ireland for Gate Gourmet, Mandy Coalter, Director of HR & OD, Heart of England NHS Foundation Trust, Valerie Raven-Hill, HR Director, Look Ahead Housing & Care, and Louise Fisher, European Human Direct, Xerox Global Services, describe their experiences of making change happen and Vanessa Robinson talks about whether the HR profession has taken on board the message about change as a continuum.


Philippa Lamb: Welcome to the second part of our short series on making change work. Here’s a reminder of what you hear in part one.

Victoria Woodison: Basically Gate Gourmet was totally at crisis point, so we were losing millions of pounds. We were losing £27m year on year, things were just getting worse and worse and worse and I guess the culmination of it was we did have the administrators in the business, we did end up with a thousand employees striking illegally in the summer of 2005. We literally had no choice. We had to do something about the situation. We wouldn’t be here today if we’d allowed it to carry on.

PL: The big challenge for you was that Heart of England was a very successful outfit indeed and Good Hope had its problems didn’t it.

Mandy Coalter: Eh yes it did.

PL: You must have known at the outset you were going to have people problems, marrying up two organisations like that.

MC: Absolutely. Absolutely. One of the things that really attracted me to join the Heart of England was the fact that they really recognised that. Some of the messages had to be very different for those different stakeholders.

Valerie Raven-Hill: Practically overnight, customer relationship management became key. Accounting systems had to change. New infrastructures had to be developed, it was a massive change. A contracting market emerged and it has grown and become fiercer and fiercer and fiercer. We became financially accountable on a contract specific basis. It was a massive change. It was a massive behavioural change.

PL: In part one, we looked at the various drivers for change. In this podcast we’ll be taking a more in-depth look at our case study organisations have and are continuing to make change work for them. We’ll be looking at the types of measures they took and the huge role of communication the change process. We’ll hearing more from Vickie Woodison at Gate Gourmet, Mandy Coalter at Heart of England NHS Trust and Valerie Raven-Hill at Look Ahead later. 
But first, a look at Xerox, a global organisation founded in 1906, traditionally known as makers of hardware like printers and photocopiers. In 2004 they created a new department called Xerox Global Services. Louise Fisher is the European Human Resources Director and she was brought in to drive the changes that were necessary to launch the newly formed division.

Louise Fisher: That required a different organisation structure, different skills, different roles so I was brought in, in 2006, to create really an HR function for this new part of the business to help create HR strategies that were different from the traditional part of the business, looking at all kinds of things right from how do we pay people in this part of the business, how do we do it differently to the traditional part to what are we actually looking for? What roles do we need in this organisation? So, the whole gamut of HR practices we looked at.

PL: Tell me, how did you approach this very big and very complex project?

LR: I recognised that we needed different roles, different people. Probably about 50% of our head office in Europe is new recruits so we have brought fresh blood into the organisation, with (like I had) IT outsourcing or other outsourcing experience so that those people could hit the ground running and help shape what has now become Global Services globally.

PL: But Louise’s new department was very different from the main organisation, with the need for a different set of skills as well as working to different time scales.

LR: I have to say I think that’s one of the challenges we face now is that the traditional Xerox person may not suit what Global Services needs for the future. We deal with much more complex opportunities. For example a bid that we won with the DWP two years ago was the largest bid that the organisation had ever won, so we’re doing things that traditional organisation hasn’t done before and doing it in a different way. The traditional organisation was selling hardware, you book the revenue immediately, you book the profit immediately. Our contracts can last five, seven or ten years and you’re not seeing the profit, potentially, for five, seven or ten years in those contracts so we were definitely doing things differently and the people who moved into that business, I think, could think longer term, could think differently to start with.

PL: Heart of England NHS Foundation Trust took over a poorly performing neighbouring hospital in Sutton Coldfield near Birmingham in 2007. The acquisition of Good Hope Hospital was one of the largest of its kind, combining to make a workforce of 10,000 and a budget of nearly £0.5bn. Mandy Coalter, Director of HR and OD, was the one trying to bring together the people across two sites. It was a hearts and minds mission, as well as a case of major restructuring.

MC: I think there was a real nervousness at Good Hope about being taken over and a real nervousness that there would be an assumption that everything at Heart of England is great and everything at Good Hope is poor and the one thing we quickly realised is that there were very talented people in there doing some very great things and they needed to be released and have opportunity, and we did that pretty quickly and I think that sent out a good message. There were a lot of people at Heart of England who did really question why we were doing it, particularly when we got into restructuring some key areas – some of the support functions, the management roles. That was tough for people because clearly they were feeling the change pretty significantly then, so we had to do some fairly intense stuff around those groups, that’s why we also put our Jobs Unit support in place because those were the people that really needed a lot of one to one support to try and understand why it was happening but also obviously to help them through it.

PL: Tell me a bit more about your Jobs Unit because it was remarkably successful wasn’t it, both in doing it’s job and saving you money on redundancy.

MC: Yes it was and it was a very small team of three people, so it wasn’t a grand fancy set up; those people do work with us now and are very very good people. It was just a simple concept around people going through restructuring or having to apply for jobs. We knew we would have some redundancies. What can we do to make sure that those people are cared for and looked after and cherished (which is one of our values)? We wanted to have dedicated people who would be part of the HR team and work with HR but would have a slight (I guess) arm’s length approach. That left HR really free to focus on supporting the managers, who were having to implement the change, and meant that the Jobs Unit had some real credibility with staff. I think the fact that 600 people utilised that service said a lot about how credible they were actually and as you’ve quite rightly said, they saved the Trust a lot of money and also helped us reduce the actual number of redundancies that we had to make.

PL: Indeed, only six people out of 10,000 were made redundant.

MC: We were helped by the fact that we were in Good Hope early because it meant that we could start managing vacancies in those areas pretty rapidly and we were doing that more than six months before the acquisition date so that made a big difference, but also the Jobs Unit were very active in seeking alternative employment for those people who were potentially redundant and we did have a fair bit of redeployment around the organisation when other vacancies came up.

PL: Last month we heard briefly from Valerie Raven-Hill about the transformative change at Look Ahead, a charitable housing and care organisation. Despite being a voluntary organisation they’ve had to adopt a more commercial approach towards their work, a bit attitudinal change for a workforce driven there to do good and not in the habit of having to think commercially.

Valerie Raven-Hill: Previously in the sector the focus had been very much on support and care, which is what we do and we do really well, but the balance of moving towards sound professional business practices that are now needed in this changing market, so that was the need for the change.

PL: Valerie, remind me, what were the key challenges facing you when you took this job on?
V R-H: We had in our organisation very very capable managers but their drive, their passion they identified with supporting and caring for people. They would say to me, “I didn’t join this organisation to be concerned about the commercial realities of running a business”. So the challenge for me and my colleagues and the management population was how we could drive through the change without destroying the social ethos and I think at that time there was a view that the two aren’t a happy marriage, you can’t have the one without the other. I think what we’ve been able to achieve over the last four years is a demonstration that actually yes you can. 

PL: You were faced with these really exceptional challenges. You had people working within the organisation who didn’t want to do it, resented having to do it; how did you start?

V R-H: It’s always difficult with the start of a big change programme like this but I mean my vision for it was that we would achieve it within maybe a three year time span and the focus was going to be on leadership capability within the organisation to support driving the change through so we invested a lot of time in attempting to win the hearts and minds of our managers. We set up management programmes that had a heavy emphasis on culture change and we worked with them to enable them to gain the confidence to actually start to talk about behaviour and how it needed to change in this new world if we were to survive. There was the softer behavioural side to the development and the investment in our management population but also the hardcore financial awareness, commercial skills, customer relationship management.

PL: Yeah, how did you tackle that, because these are areas of expertise that were completely beyond their experience when these people do a job which does not involve any of that sort of budgeting and customer service that you’re talking about? What did you actually teach them to do? How did you do it?

V R-H: Well we worked with external consultants and we bought in people that already had quite a strongly developed corporate social responsibility agenda of their own, so I think we wanted to work with people that could identify with our organisation and our social conscience, but at the same time had the business skills. I think a key success for us in terms of the programmes and what people get out of them but also in driving the change forward is that we do involve our senior management in facilitating delivery alongside the external deliverers.

PL: How did your managers take to all this?

V R-H: I think I’d be lying if they all jumped onboard saying “Oh yeah, that’s great” and one of the things that I always say to people through a change process is that negative feedback can be a positive indicator that shift is happening because I really think that people don’t get outside their comfort zones unless they feel a little bit uncomfortable, a little bit afraid so don’t be scared of negative feedback. Stick with it; just because people don’t like something doesn’t mean it isn’t right. I constantly fed that message back and I think constant communication. We developed a communication strategy to support the management development programmes and to make sure that people were fed the right information in terms of why we needed to make these changes and what the milestones were along the way of the change.

PL: Did you lose people? Did some people just think ‘This is not for me, I’m going elsewhere’?

V R-H: I don’t believe that we lost people as a direct result of the changes that we were making. I mean we still have turnover, we do have turnover. We still are, in my view, although we’ve achieved a lot of success on the way working towards being a fully excellent organisation (and we’re just about to launch an apprenticeship scheme), we’re constantly looking for ways to keep ahead of the game in the sector.

PL: Setting an internal communication system like Valerie did might not be rocket science but it is a crucial step. This was also true at the Heart of England NHS Trust where they mere merging two big hospitals. I put this to Mandy Coalter. 
It was all about communication wasn’t it and I think the thing we need to draw out of this particular case, Mandy, is the many ways in which you created good comms.

MC: I think that’s absolutely right. You can never communicate enough, and for us it was about trying to find ways of communicating with different people in different ways but not just sending out newsletters or emails. Those things we did do, but very much do the face to face work with people. That’s why we set up leadership groups and training, which executives like myself were very much involved in and sponsored and were present at, but it’s also why we ran sessions for several thousand people that the Chief Executive himself was at every single one, so that again we could just engage really closely with people on a one to one, a group level and just talk to them about what’s worrying you, what are your concerns, what are your questions?

PL: And you did a very brave thing, you did this thing of publicising the change curve and telling them that a lot of them weren’t actually going to like this and where that process would take them. Tell me a bit about that.

MC: I don’t think I thought it was brave at the time actually, it just seemed like the right thing to do in a sense.

PL: Well it’s telling people they’re not going to be happy though isn’t it?

MC: I guess it is actually, yeah, when you think about it like that it is, but they’re not are they and that was the reality. No matter where they were coming from – Good Hope, Heart of England – they were all going to go through it so it seemed to me to a bit of a no brainer really to be upfront about that and clear.

PL: So obviously you were trying to get a lot of people through this change curve as quickly but as sensitively as possible and you recruited change champions didn’t you? Not all of them from the most obvious places. 

MC: I think we just felt we needed people who would be out there selling the right message, we then backed that up with some of our other programmes like our leadership programmes, our inspirers programmes. People say to me, “What was the role of your inspirers?” They didn’t have a job description or a task to do. We thought about that and then we thought no, we just want to get these people together, give them a bit of an insight into why this is happening, give them some new skills, some new ways of thinking and just let them go back out where they work and be inspirational and that’s enough.

PL: How did you tackle the really entrenched resisters because there always are some aren’t there?

MC: Yes there always are. Various different ways I think. To a certain extent you have to accept that they’re there but not put too much time and energy into it. Quite often those people will eventually vote with their feet. It is important though not to write off every resister to change. There are some people who’ve been genuinely quite badly hurt in the past and you can understand why they’re cynical. Good Hope had had turnaround teams coming in, they’d not made a different, you could understand why the clinicians would be very sceptical (I would be too in their shoes) so we had to work with that and recognise that everyone wasn’t going to jump for joy on day one, it was going to take time.

PL: On stage at the CIPD HRD Conference Mandy told a story about a lesson she learnt about winning people over.

MC: I remember a guy that came to one our session, a frontline guy, worked in our estates department and he was the grumpiest person you’ve ever seen. Walked in, sat down, arms folded and said, “Well I’ve come here to see what this Chief Executive’s got to say but frankly I’m sure he hasn’t got much to say to me”. I kind of thought at first ‘Oh well, what can we do with him?’ but actually we decided to spend a bit of time with him to find out why he was in the place that he was in and it turned out it was nothing to do with this change process, it was something to do with something that had happened to him several months before and actually because we started to listen to him, try and help him and support him it did actually turn him around and we ended up putting him on one of our inspirers programmes, which was a bit of a tricky choice because he could have been quite disruptive but he came out of it a completely different person. About six months later we ran another session for our change champions and he was sat there at a table with doctors, with other senior people, he was being constructive, he was engaged, he was involved, he was great. It just taught me a lesson that you shouldn’t write everybody off.

PL: As Vicky Woodison said earlier, if Gate Gourmet hadn’t done something and fast they’d have probably gone under. They had a thousand employees striking illegally, the decision was taken to sack them, they were losing millions of pounds a year, they were on their knees. There was complete disconnect between managers and employees. Communication hadn’t been happening at all but it had to start happening and fast.

Victoria Woodison: It was really around setting up the communication structures, it was around understanding what the employees actually felt about the situation. At the end of the day they work on the shop floor, they know exactly what goes on. They’re probably the best people to go to for ideas and change so there was a lot about communicating. 

PL: As you say, there was a complete disconnect between the management and the staff, just no communication whatsoever, it had always gone via the union and had got rather mangled up in the process. How did you tackle that, because it needed to happen didn’t it because you had absenteeism running at 20% in some areas, productivity was appalling so there needed to be that conversation, how did you actually start that in an organisation where it just hadn’t happened at all?

VW: I think it was really about the realisation of managers that they had to talk to the employees and actually that they had a right to talk to the employees as well and didn’t have to go via the union to do it but equally that the employees had to understand that their managers had a right to talk to them as well and to manage the departments.

PL: But you still had those big productivity issues didn’t you but you involved the workforce in how things were going to change on that front didn’t you?

VW: I think probably the first thing was actually some of the managers going down onto the shop floor, which in some cases was the first time that they might have actually done that and actually setting up some working parties with the employees who were actually working that particular area. Initially there was still resistance. There was still distrust about why would we want to do it, surely it can’t be any better. So, it was about demonstrating to them the benefit that actually changing would provide to them, getting them involved and coming up with the ideas and suggestions and in some cases we would actually trial several different ways of doing things for a period of time to give them the opportunity to see which one actually worked best. 

PL: We’re talking about a very short time frame here. Gate Gourmet went from losing £27m a year to breaking even I think the next year and into profit the year after, which is an extraordinary achievement while you were in parallel bringing about these mindset changes throughout the workforce from management right down to the bottom. It is an astonishing thing to do in the time, what remains to be done for you there do you think?

VW: I think if I was to explain the culture of the organisation I think we’ve moved from a very antagonistic industrial relations culture through a more employee relations culture and for us, now, we trying to move towards an employee engagement culture so it really is about genuinely being able to say that our employees are truly engaged, not just that they understand the need for change, not just that they understand where the business is going but that actually they feel proud and passionate to work for our organisation and I truly believe we’re getting there but we’re not there yet and that’s really what anything that we’re doing now contributes towards that. So, new reward and recognition schemes, the training that we’re carrying out being fully inclusive of all our employees. We have made acquisitions within the group so it’s really about integrating them into the organisation and, as I say, really actually becoming a real employer of choice that people say ‘I’m proud to work for the business’. 
Gate Gourmet is a global organisation but the UK and Ireland is truly intrinsic to the whole group and we’ve gone under the whole thing really would have gone under so I think that’s why it’s so important that we had to make these changes and then to actually enable the group to make ten acquisitions and then to become so much stronger and much more diversified, it is something to be proud of.

PL: Meanwhile, at Look Ahead business is going well. 
It seems to me that what you did in a nutshell – you obviously did a lot of things and achieved a lot of objectives – but what you really did primarily was you took managers and you taught them to manage.

Valerie Raven-Hill: I think we taught them business. We taught them to feel okay about saying that Look Ahead is a business as well as a charity that’s supporting and caring for people. We are also a business and the business side of what we do is as important as the support and the care side and you can see from where we are today with the awards that we’re winning and the new business growth that we’re achieving that we are now in a situation where they do feel comfortable and they do trust that actually there is that happy marriage.

PL: So how many years are we into this now?

VR-H: At the end of 2003/2004 was the change, so four years into the change and we’re winning awards, we’re a Sunday Times Top 100 Company. That, for me, is a success indicator that our staff still believe that Look Ahead makes a difference in the world, so we have not lost that true passion which is at the heart of what we all do.

PL: Finally, I talk to Vanessa Robinson about whether HR as a whole is coming to terms with the need to be ready for change. 
Do you think that the HR profession has really taken the message about the need to change as a continuum, not just as a project specific target? Do you think that really as a profession we’ve taken that onboard?

Vanessa Robinson: Well it’s interesting, we’ve just completed a mini poll at the CIPD about the skills that people in HR think are essential for them to have, particularly in these times, and the top skill that they recognise was the need to effectively manage change. Now okay a number of organisations have been doing that so I think we don’t want to sort of think this is something totally new but I guess the place that we’re getting to is the fact that this isn’t just an add-on at particular times, this is something integral if you like to the role that HR plays and it can’t be something that people sort of pick up and drop off. It’s not a static state if you like and then suddenly we need to change and then we can forget about it for another period.

PL: And, indeed, not just something to talk about as a theoretical possibility because I know that the CIPD itself is very much taking this onboard.

VR: That’s right. I mean I think we’re taking it onboard probably in two ways. Firstly, we’ve recently done a big review of our whole profession map, which is very much around the roots into membership and the qualifications and I think if you look at those, they very much are recognising that the skills sets and the behaviours and the actions that people need to take to actually be effective in HR are much wider than they used to be and the ability to be agile, to be ready for change are absolutely core in some of those both behaviours and also areas of competency and I don’t think you’d have probably seen those, certainly in the CIPD set of qualifications if you look back at the previous ones. 

PL: That raises interesting questions about what ‘being in HR’ will mean in the future doesn’t it?

VR: I think it does and following on from that what we are actually doing is we’ve just embarked upon a new piece of research which tentatively we’re calling next generation HR, which is looking exactly at that. I think we’re recognising the skills set, the mind sets; everything about what HR will look like in the future could be quite different and I think change is definitely one of those.

PL: Big challenges.

VR: Yes, I think so.

PL: This brings this two part programme to a close and we hope both these podcasts have given you an insight into some of the different reasons for change and some of the challenges you might face in making change work. If you’re interesting in finding out more about organisational change you’ll find further information in the show notes accompanying this podcast.

I hope you’ll join me next month when I’ll be closing our change season with a chat to Gary Hamel who The Wall Street Journal recently ranked as the world’s most influential thinking and Fortune Magazine has called the world’s leading expert on business strategy: don’t miss it. Until then, goodbye.