HR in practice: the change gang

The business

The Housing Corporation is the public body that funds and regulates the provision of affordable homes in England. This sector has grown by 100% in the past 10 years, and it now encompasses two million households.

The challenge

At the beginning of 2005, the Housing Corporation responded to the Gershon public sector efficiency drive with a programme to reduce its running costs by £2m. This meant it needed to make about 70 posts out of a total of 570 redundant – or about 13% of the workforce. In addition, thanks to the Lyons report on public sector relocation, significant numbers of staff would need to move out of central London to offices in Leicester, Cambridge and Croydon.

Finally, the organisation was desperate to reduce regulation and red tape, and there was a sense that it was operating in silos that rarely communicated with each other.

An inspection by Investors in People (IIP) gave the organisation a year to turn things around, or risk losing its IIP status.

The solution

The Housing Corporation had already brought in a new chief executive in April 2004, and recruited Peter Marsh as its director of resources at the start of the efficiency programme. With all of these competing challenges, it was less of a case of drawing up an HR response, and more about simply addressing the survival of the organisation.

“In my first week, I was coming to terms with the Gershon plans and signing letters to staff who had been identified as potentials in a call for redundancies,” says Marsh.

“We didn’t know or share enough about what was going on in the various parts of our business. Internal communications were weak, and management was inconsistent,” he adds.

One of the first changes the organisation introduced was a mechanism to cascade information down from the executive management team, so that the maximum time between a decision being taken and staff hearing the news was reduced to a few days.

“We needed to work very closely with trade unions, so we held fortnightly meetings from which we made minutes, and published them on the website. There was also a heavy consultation process around Gershon and Lyons,” says Marsh.

Other initiatives included a monthly letter to all staff from the chief executive, drafted by HR, and regular meetings with the affected teams. “We wanted to be as up-front, open and honest as we could about what was happening before it happened,” says Marsh. HR also introduced a mechanism for providing feedback on the changes.

However, HR didn’t work alone on bringing in the changes. It approached outplacement consultancy Hudson to provide support for people affected by the change process.

At a wider level, the Housing Corporation developed a new corporate plan, focused on building a more ‘can-do’ culture. It drew up 12 questions that were designed to focus people on improving inter-team working.

The aim was to create flatter, more efficient structures, make the transfer of knowledge and skills a normal part of the business process, and break down barriers between silos.

Marsh also oversaw a significant reshaping of the 17-strong HR function, which had itself been cut by 20% as part of the efficiency drive. It moved from being a centralised team to a flatter structure consisting of pay, reward and internal HR recruitment; corporate development (including learning and development, risk management and internal communications); and a strategic consultancy arm.

The outcome

The emphasis on constant communication has meant that staff satisfaction levels have increased on a year ago, according to Marsh.

Staff surveys show the percentage who understand how their work contributes to the success of the business rose from 80% in December 2004 to 91% in 2006.

Those who believed their views were taken seriously rose from 18% to 42% of staff, and those who were proud to work at the corporation rose from 57% to 70%. Just as importantly, the corporation has regained its IIP status.

“I was surprised how people simply preferred to know what was going on, even if it was bad news, says Marsh. “Hope can sometimes be the worst thing.” e_SRit

Guide to… effective change management

… in 10 steps

  1. Create a clear context for change. People need to understand the ‘why’ and then the ‘how’.
  2. Focus on ending old behaviours and systems as well as starting new ones.
  3. Be realistic about what challenges are ahead. Recognise you don’t need to have all the answers yet.
  4. Look at what will get lost in the change – work closely to understand what matters to workers and why.
  5. Communicate, communicate, communicate.
  6. Change the rituals and symbols. If you’re really changing, how come the Monday morning meeting is still the same?
  7. Insist that senior people change their behaviours early and visibly.
  8. Recognise that change is an emotional thing. Don’t expect to convince people just through rational argument and business cases. Demands simply to”be customer-focused” are meaningless and confusing.
  9. Recruit ‘change champions’ at all levels. Support and coach them.
  10. Change your own way of working. You won’t change behaviours by doing what you’ve done before.

Source: Tony Quinlan, Narrate Consulting

If I could do it again…

In hindsight, blaming so much of the need for change on Gershon and Lyons, rather than because it would actually make for a better organisation, may have been a mistake, argues Peter Marsh, director of resources at the Housing Corporation.

“It is much harder if people feel something is being done to them, rather than when they feel they own the solution,” he explains.

“We also recognised that there is only so much structural change that can be sustained in an organisation. So we called an embargo on it at the end of this year,” he adds.

If given a second chance, Marsh says he would have reordered the timescale too, holding off on the reorganisation of HR until after Gershon and Lyons had been accomplished.

Employee perspective

Former Housing Corporation union representative Mark Tracey is now on the other side of the fence, helping to implement the change agenda. He is head of operations and financial appraisal, based in Leeds, managing a team of 30 people, having previously managed 35.

One of the biggest changes, he argues, has been the emphasis on more cross-functional working.

“There is a lot more sharing of information, and line management is much flatter,” he explains. “There is more access to learning and development and more sharing of experiences.”

But it has not all been plain sailing. “At the start there was a lot of command and control from London and not enough feedback,” he says. “It has come good, but if I was giving it marks out of 10, I’d say seven.”

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