Implementing a change management programme: No butts

No butts: Gallaher underwent a major change programmeThe company

Global tobacco manufacturer Gallaher is the world’s fifth largest tobacco business, with a turnover of £8.2bn last year. It operates in 80 countries, and employs around 12,000 people, of which 1,700 are located in the UK and Ireland. The HR team consists of a small central group of 11, supported by a network of HR units, either working at country or regional level, or at specific manufacturing institutions.

Gallaher has transferred much of the transactional HR work to shared-services teams – an initiative piloted in the UK and set to be rolled out across the business, complemented by HR business partners in specific locations.

The challenge

In the recent past, much of Gallaher’s global growth has been generated through acquisition. Its most recent purchases include Austrian state tobacco monopoly Austria Tabac and Russian business Liggett-Ducat. In 2006, it also acquired CITA Tabacos de Canarias, a Spanish group of companies.

Gallaher’s challenge is to complete the successful integration of these companies – and continue to deliver strong organic growth and good returns to shareholders, according to Neil Hayward, group HR director.

At the same time, the industry faces increasing regulation and declining sales volumes in some markets, for a mix of health and cultural reasons. Gallaher also faces another constraint that most sectors do not: attracting people to join the tobacco industry.

“We know we are in a controversial sector,” says Hayward. “Not everyone wants to work in tobacco. It is therefore very important that we hang on to our very best people, and that we give both them and potential recruits a clear message about the sort of company we are, and how we see our future.”

The solution

Taking into account these growing challenges, Gallaher decided to embark on a company-wide change programme, called ‘Committed to Excellence’.

The programme began in September 2005, but was only formally launched in March this year. It was built by involving Gallaher staff “bottom-up, as well as top-down”, explains Hayward, and was put in place by Hayward’s central HR team as well as the wider network of HR professionals across the business. The programme gained sponsorship and input from the highest levels: the Gallaher executive team, led by chief executive Nigel Northridge.

First, Gallaher held a series of focus groups with staff across the organisation, asking what their priorities were, how they would like to see the business changed, whether the top team was accessible, whether its message and strategy was understood, and so on.

This was followed up with a series of one-day workshops in the UK, Northern Ireland, Russia, Vienna and beyond, involving several hundred people in total.

Gallaher then held a three-day launch meeting with the global senior executive and management team, briefing them on how best to manage the communication of the initiative.

“We ran a co-ordinated briefing and communications process across the whole business, in all markets, after the conference,” explains Hayward. “This included visits by senior executives and board directors. Plus, we gave local managers the freedom to add different ways of communicating that were appropriate to their local circumstances.”

Hayward wanted to ensure that everyone understood that the programme was more than just a concept on a piece of paper.

“The values have all been linked to clear behaviours that shape specific performance improvements. We know we benefit from conducting our business in a certain way,” explains Hayward.

The company is now rolling out a global performance appraisal process, linked to the behaviours and performance requirements identified in the Committed to Excellence programme, and is re-shaping its reward and recognition for all managers globally.

Gallaher has also revamped what it offers in terms of learning and development to better reflect the messages behind the initiative.

The benefits

It is still early days, but there is already a greater understanding of what the business is trying to achieve and how managers and workers can align their values to the wider Gallaher vision, according to Hayward.

Gallaher has followed up on this with specific, values-based surveys in its key markets. The HR team has already surveyed 6,000 people to gauge their response to the initiative and, so far, the feedback received has been positive.

“We are seeing some links between the alignment of our values, and an understanding of what we are trying to achieve, in parts of the business that are performing strongly,” Hayward concludes.

Employee perspective

With a team of 16 people reporting directly to him, Gallaher deputy company secretary Robin Miller believes he has already seen a real difference from Committed to Excellence, both in terms of how he manages his people and their response.

“It has given everyone a real clarity and understanding about what they are working together to achieve, and has enabled the team to work against a framework,” says Miller, who has been deputy company secretary since May 2005 and joined the company in 2001.

“I think it is important that organisations such as ours, which have bought other organisations, come together as one. Committed to Excellence has, in my view, helped us to embody that vision and is creating a new organisation from our constituent parts,” he adds.

“There is a much greater clarity about what people are expected to do and how they are expected to behave, and the sorts of values they should be adopting,” Miller says.

If I could do it again…

“On reflection, I would say we probably have tried to do too much at once,” says group HR director Neil Hayward.

“I would probably have slowed the initial process down so that, for instance, we had completed some of the redesign of our core HR systems and processes ahead of communications post-conference,” he adds. “That would probably have made it easier to tie it all together better.”

The key lesson for HR, suggests Hayward, is not to take change programmes too lightly, as they can fundamentally change the outlook and nature of the business.

Getting it right is an uphill struggle. “The workload has been phenomenal, and it has stretched the whole HR team, but they have risen to the challenge excellently,” he says.

Guide to communicating a change management programme in 10 steps

1 Recognise that a vision can come easily making it happen is the hard part.

2 Realise that altering behaviours will not happen overnight.

3 Know beforehand what you want to achieve and where you want to get to.

4 Recognise that your workforce is not one homogenous mass – messages need to be tailored to individuals and groups.

5 Encourage two-way dialogue and interaction to promote buy-in and engagement.

6 Involve your audience right fromthe start.

7 Remember to communicate ‘why’ aswell as ‘how’.

8 Show how the change is going to improve people’s day-to-day lives, try to avoid jargon and management speak, and keep it real.

9 Use line managers to promote the message, and identify credible ‘change champions’.

10 Senior management must be seen to embrace the change and lead by example.

Source: The Loop Agency

Tell us about your project

If you have an HR project you want to tell us about, go to

Comments are closed.