Change management: total turnaround

Turning around the fortunes of telecoms giant Cable & Wireless (C&W) has been no small undertaking. When John Pluthero took the reins of the business following its acquisition of Energis in November 2005 [Pluthero was formerly chief executive of Energis], he said that C&W was a “fundamentally broken business” and that every aspect of it needed to be transformed.

In a now infamous memo to staff, he declared that the company was “underperforming” in a “crappy industry” and urged those not up to the task of transformation to “step off the bus”. Such honesty and candour has characterised the company’s leadership style ever since – and the way it has communicated with staff on its transformation journey.

Now into its third year of a five-year transformation programme, C&W Europe, Asia and US [the UK division the other business unit is International] is once again cash-flow positive. It has restored revenue growth, slashed costs and improved customer service in an industry where poor service had become the norm.

“We had broken processes, disengaged colleagues, and badly performing financials,” says Colm Coffey, HR director at C&W Europe, Asia and US.

“But that broken business is now fixed. We are on the path to growth and are differentiating ourselves by delivering great service.”

C&W has refocused its business by concentrating its efforts on large enterprise customers – around 3,000 corporates, carriers and public institutions worldwide – and building deeper relationships with those customers. It has made service its number-one priority and recognised the importance of developing and engaging its people to deliver that service.

Indeed, people have been at the very heart of the transformation agenda from the outset, says Coffey. “At the time of the Energis acquisition, C&W was a failing business. Colleague morale was low and people were suffering from change fatigue. But the integration of Energis has been a breath of fresh air. In the last two-and-a-half years, C&W’s European CEO, Jim Marsh, and executive chairman, John Pluthero, have talked openly and honestly to colleagues. As an HR director, I couldn’t ask for more in terms of their commitment to the people agenda and to what we need to do to bring our colleagues with us on the change.”

A key part of the transformation strategy is making C&W a great place to work, and HR has played a central role in defining and implementing organisation-wide change. Coffey and his HR team have built commitment among colleagues to the change agenda and improved communication to ensure that people know how they fit into the organisation’s goals.

Employee feedback

Last year, HR ran an internal communications campaign, called ‘A new way everywhere’, which explained how and why everything had to change. “It was about making the transformation relevant to colleagues and making it their business,” says Coffey. “Ultimately, change has to be led by colleagues themselves, and once they own that change, they become truly committed.”

C&W has various mechanisms for employee feedback. An employee consultation forum allows staff and management to have open discussions about problems in the business, while the ‘Just flaming nuts’ forum allows staff to raise the issues that stop them from doing a good job, with a commitment from the leadership team to solve these problems. Some 600 issues have been fixed in just seven months in this way, says Coffey.

Higher up the organisation, HR has changed the way the business engages with managers. Early on in the transformation programme, managers said they felt HR wasn’t helping them to do their jobs well. So Coffey and his team created the ‘new way of management’ programme, which gives managers a detailed view of what is expected of them and the support available to them from the business. “As an organisation goes through multiple changes, it often loses sight of what it wants from managerial capability,” says Coffey. “So we developed a vision of what really great managers do and what their characteristics and behaviours are. This has been a great way to effect cultural change.”

The programme has been supported by new learning and development opportunities and has been integrated into performance reviews. Meanwhile, it has enabled C&W to weed out underperformers and to identify potential leaders, as well as creating managers who are committed to the transformation agenda and act as champions of change in the wider business.

Where do I fit in?

Some staff also complained they didn’t have timely access to information about corporate objectives from the senior management team and that they weren’t able to see how their roles fitted in with the corporate agenda.

HR is addressing this through a goal alignment programme, in which the top 200 managers in the business will receive their objectives four weeks ahead of the start of the financial year, are required to cascade this information to the rest of the business and to outline how people’s roles align to those goals.

“We have given our managers better access to information and skilled them up, so that they feel they can stand up before their teams and really do a good job,” says Coffey.

Initial feedback from the employee consultation forum shows that 60% of colleagues now understand how their role fits into the transformation.

The entire change programme has been dominated by an ‘ask the people’ attitude, which has helped to increase buy-in. For example, C&W runs ‘laser projects’ in which virtual teams of managers and project managers solve individual business problems within 12 weeks.

“We firmly believe that colleagues have the answers,” says Coffey. “If you ask people how to solve problems, it helps them to find links to the corporate agenda and means they feel they ‘own’ the change.”

Another important success factor, according to Coffey, has been the high visibility of the senior management team to staff throughout the transformation journey. Pluthero and Marsh visit sites regularly, as does Coffey, to talk to staff and to test the pulse of the organisation. Each of the 30 members of the senior management team also has a transformation agenda for their part of the business – for example, HR or billing – which is aligned to the overall objectives and helps to maintain the focus on results.

According to Coffey, the result of C&W’s people-centred approach to transformation is that colleagues have become committed to change. “Three years in, I am struck by how much momentum for change has been built up among colleagues,” he says. “They feel they are being listened to, that they can contribute towards the transformation, and that, in turn, C&W is committed to them.”

This has been an uphill struggle, of course, not least because the current transformation came at a time of ailing business fortunes and low morale. “The biggest challenge has been gaining people’s trust,” says Coffey. “When people tell stories about the old regime and how they were treated, you can see why they weren’t engaged. It takes time to build up trust again. But if you hold a firm view that you are doing the right thing and you communicate that openly and honestly, people start to trust you.”

The challenge now is to maintain momentum for change, while continuing to deliver performance improvements and to grow the business.

Coffey likens the journey to climbing Everest. “Each year, the slope gets steeper, as the expectations of our service quality grow and we endeavour to make C&W a great place to work. We are on the upper slopes now and have to keep our focus and our energy.”

Lessons learned

According to Colm Coffey, HR director at C&W Europe, Asia and US, the key lessons HR learned from the change programme were as follows:

  • Keep focused on results. “You need to demonstrate the benefits of change to colleagues and customers quickly. Two years ago, every month counted as it was critical to our financial performance. Now that we are further along the road, we must remain focused on the end game and maintain momentum for change.”
  • Communicate honestly and openly. “This makes a huge difference. A lot of people say this [when embarking on a major change], but we have genuinely practised it.”
  • Understand cause and effect. “If five people leave because they can’t see a career path, I would rather speak to them to find out why they are leaving than come up with something that I think is the perfect solution.”
  • Listen to staff. “Listen to what colleagues need to drive change. I’ve made some amazing assumptions and then realised that I need to take a few steps back and put other things in place first.”
  • Ensure there is strong leadership behind the change. “If you create direction, you empower colleagues to take risks to make the change happen.”
  • Be ready to respond quickly to what people say and, most importantly, deliver on what you promise.

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