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Change managementHR strategy

How to make change happen

by Personnel Today 26 Jul 2005
by Personnel Today 26 Jul 2005

Co-operative Insurance Services

Change is something everyone working in the financial services sector has had to get used to in recent years. And in a highly competitive market, many established names that did not adapt disappeared.

Co-operative Insurance Services (CIS), part of Co-operative Financial Services, was founded in 1867, and serves more than five million customers. But poor trading results and a lack of modernisation over the past 20 years meant it was desperately in need of change if it was to remain a key player in the sector.

“At best, its model was more like something from the 1980s, if not the 1970s, and there we were in 2004,” says Stephan Pater, chief executive of general insurance business, new operating model change programme and field sales force at CIS.

Pater was well placed to spearhead what became known as the ‘Building a new CIS’ change programme. Before retiring, he had spent 10 years at Royal & SunAlliance, where he was involved in a major turnaround of the life insurance company. The CIS project was enough to coax him out of retirement. “I’ve never seen change as a negative,” he says. “Instead, it can be hugely exciting.”

For CIS, the change was on a scale the company had never experienced before. It had to shed 2,500 staff, create a new field management structure with 18 regional sales offices, reposition the field sales team as financial advisers, establish a UK-based centralised customer contact centre, create 500 new customer-facing positions and embrace new technology. The change programme also had to create a more competitive cost base from which to grow the business, and have a sharper focus on monitoring performance.

All of this had to be achieved while maintaining the Co-operative values of honesty, caring for others, openness and social responsibility.
In Pater’s view, there are two approaches to implementing change: embedding specific projects within a business-as-usual approach, or pulling all the elements of change together within a separate change programme. “I strongly believe that the latter brings better results,” he says.

Central to the project, which began in July 2004, was a team drawn from HR and communications, which led much of the programme. It included 20 HR staff out of a total of 150 HR people working at the company. Team members worked alongside workstreams, which were basically project groups within the bigger project, dedicated to particular areas of change.

HR’s involvement ran far deeper than dealing with the practical issues, such as negotiating with five trade unions, arranging redeployment and administering severance packages. It also had a vital emotional role to play, says Pater.

“To be successful in a change programme, you’ve got to be able to engage people’s hearts and minds, and HR is hugely important in this,” he explains. “It was vital in the major communications process that took place.”

As part of the communications exercise, a video was sent to all employees to provide an understanding of why the programme was necessary, a weekly programme update newsletter was published, update forums were held and a ‘frequently asked questions’ section was put on the intranet. There were also regular updates from the programme director as well as the opportunity to ask him questions – he has fielded 1,000 to date. Management was also regularly seen walking the floor.

For those being made redundant, an outplacement and resource centre, telephone helpline, face-to-face counselling facilities and training initiatives were made available. These were also designed to help people find new internal or external positions. Currently, around 2,100 people are on notice of redundancy.

Just over a year since the change programme began, Pater says the company is well on the way to proving the viability of the business in the competitive UK market, and on target to bring an annual benefit of more than £100m to the bottom line. It is now looking towards other areas, including investing strongly in people and bringing more innovation in terms of business processes.

As well as benefits for customers, staff and the business, Pater says change programmes also enhance CVs. “Working on a programme can sometimes give you the equivalent of 10 years’ experience because of what it exposes you to,” he says.

Learning points for HR

– HR has a role to play in engaging people’s hearts and minds

– Update staff on a regular basis

– Enable change, while retaining the organisation’s values

– Ensure you do not lose customer focus

Colt Telecommunications

Peter Walmsley, HR director for strategy and business transformation at Colt Telecommunications, was in no doubt from the outset that HR needed to be a key player when it came to driving change at the company.

Colt is a major provider of business communication services, operating high bandwidth local networks in 32 European cities across 14 countries. The turbulence in the telecoms market from 2002 onwards meant the company had to become more efficient and achieve a greater consistency of service to its pan-European customers. It had to harmonise management practices across its European operations, shift from an individual country to a functional structure, and create a single culture across the group.

“We had to drive operating efficiencies through restructuring the business, reducing triplication [of processes] and focusing on economies of scale,” says Walmsley.

“HR had to be a business partner in the whole process. The pace of change was so phenomenal, HR had to be there to offer guidance. And with the complexity of information, it had to help ensure the consistency of the message.”

Measures included developing a single operating model and reducing headcount by more than 700 people in 12 months. Previous experience of change at the company, which employs 4,200 staff, had affected morale and loyalty, and caused it to lose quality people. While it had sporadic examples of successful implementation, there was no structure to the change and no clear leader or manager of it. Colt turned to Kaisen Consulting to help it develop the right leadership at local level and foster a more engaging and consultative communication process between employees and management.

Elements of the approach included setting up a steering group and team of sponsors made up of senior management and Walmsley himself, carrying out a ‘climate review’ of employee opinion, holding regular briefing sessions for all employees, establishing workstreams to implement areas of change and identifying change agents within the company. To facilitate the latter, Kaisen ran a series of workshops which focused on leading and managing change.

“We wanted to adopt a more inclusive approach and learn the lessons of past failings,” says Walmsley. “We set out a far more structured model than before to enable us to identify change agents within the business that could help translate this change in line with the bigger picture. So we used Kaisen to help design and run change agent workshops.”

Kaisen Consulting was set up in 1991 and claims to be a leader in the field of business psychology. Kaisen director Roger Coveney explains change as a three-legged stool, comprising change design, where you decide on the change that is required; change delivery, which is how you implement it, which largely comes down to logistics and can often be IT-led; and change psychology, which is often the most overlooked area. “You have got to make sure you are in the right place psychologically for the change,” says Coveney. “Some companies fail to do this and rush into implementation. It’s the role of HR to take the lead in such matters.”

Colt and Kaisen staged a number of workshops, mainly across France, Germany and the UK, which were aimed at systems operation change agents, sales operation and systems operations staff and senior management. HR had a presence at all of them (there are 75 HR staff across the organisation). Each workshop included a case study which allowed participants to practise using tools for managing target groups through the change process.

The workshops helped people to become emotionally engaged and understand the psychological impact of the change.
Walmsley and his team carried out a review every six months to find out how staff felt about the change.

“We were pleased with the extent to which people felt involved,” says Walmsley. “They had a much greater sense of how the strategy impacted on them.”

The programme has evolved over the six to eight months it has been running and has entered its next phase with the arrival of a new chief executive, who is redefining the operating model. Walmsley expects the company to be in a state of change for the next 12 to 24 months, and says that HR will remain at the forefront.

“We now have a model for HR staff as business partners,” he says. “HR has a place at the top table and it will continue to help transform the business.”

Learning points for HR

– Ensure staff feel involved

– Ensure consistency of message

– Learn lessons from the past

– Establish the right structure to enable change

– Regularly review employee feedback

Weblinks

HR needs to take supporting role in change management www.personneltoday.com/30536.article

Getting a grip on change management www.personneltoday.com/30134.article

‘Friendly data’ key to successful change projects www.personneltoday.com/30030.article




 

Personnel Today
Personnel Today

Personnel Today articles are written by an expert team of award-winning journalists who have been covering HR and L&D for many years. Some of our content is attributed to "Personnel Today" for a number of reasons, including: when numerous authors are associated with writing or editing a piece; or when the author is unknown (particularly for older articles).

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