The human factor

While the people management issues of developing an e-business are critical,
many companies neglect them. Claire McCartney examines how leading companies
have tackled…

We are living in a business world that is characterised by constant change.
We have witnessed the advance of mergers and acquisitions activity,
globalisation, strategic alliances and, currently, a shift towards organisational
restructuring and downsizing.

Change has been accompanied and facilitated by a new technological age, in
which organisations are increasingly reliant upon IT and the internet to
advance their business processes. Established organisations are realising the
potential that e-business offers them despite the dotcom downturn. Indeed, many
companies are urgently implementing e-business initiatives so they may compete
in their markets and improve organisational performance and productivity.

A new report by Roffey Park, exclusively released to Personnel Today, shows
that organisations entering the world of e-business have to contend with a
whole array of new practices, ways of working and challenges. The human
implications of buying into this change conversely seems to be the area that is
most often neglected by organisations. Organisations need to tackle the human
issues directly in order to create successful e-businesses. The role of HR is
critical within organisations adopting e-business, as change relies heavily on
human transformation.

E-business success is dependent upon effective recruitment and retention,
implementation of wide-scale training and support, consistent and frequent
inter-communication and by initiating culture change.

There is no single, universally accepted definition of the term e-business
because it represents a newly emerging and constantly evolving area of
business. However, throughout Roffey Park’s research, the term e-business is
used in its broadest sense, referring to the integration of systems, processes,
organisations, value chains and entire markets using internet-based and related

The report, E-Business: What are the Human Implications of Transformation?
features six case studies of companies that have developed varying approaches
to integrating e-business into their organisation. It shows how the Employment
Service, Sainsbury’s and an anonymous financial organisation have created
separate e-business initiatives, and how BT, Cable & Wireless and IBM transformed
their entire organisations through its use.

They faced HR challenges in five key areas:

1. Recruitment and retention

For many of the organisations, the effective recruitment of new skills
required for changing business needs was a real issue that needed to be tackled
during the hype surrounding dotcom start-ups. One of the key challenges was the
need to entice people from attractive, smaller, innovative web companies.
Although the subsequent loss of confidence and eventual demise of the dotcoms did
much to enhance the attractiveness of traditional, secure organisations, firms
still have to address a number of issues in this area, and need to think about
other ways of winning the war for talent.

Many of the featured organisations are seeking employees with relevant
experience and, equally importantly, with the right attitude and mindset to fit
in with the emerging e-business culture. Employees have to be able to adapt to
working in a constantly changing environment, an uncertain market, and for companies
where work roles often have blurred boundaries.

The financial organisation’s e-business initiative not only offers a number
of different terms and conditions to its parent organisation in an attempt to
attract the type of talent the business requires, but also to cater
specifically to the e-business environment. In particular, the e-business
initiative offers employees with these skills benefits such as a £3,000
development allowance and a company performance-related bonus if they remain
with the organisation for a specified period of time.

Recruitment and performance measurement within the financial e-business
initiative, is conducted against a defined set of behaviours linked to the
business environment. The recruitment team is looking for potential employees
with appropriate experience and an attitude that fits with the company’s
culture. Many of these behaviours interlink with the traditional side of the
business such as driving performance and building pride and passion, but the
evolved organisation particularly emphasises the need for innovation and fun in
addition to hard work.

Sainsbury’s to You, the chain’s home delivery grocery service, purposely
formed a team blending people with web and marketing skills with others who had
worked for Sainsbury’s in retail and in the supply chain, and understood the
logistics of the business. It recognised where the skill gaps were within the
company and recruited externally. Sainsbury’s, for example, highlights the
importance of building a strong team with a combination of different skills and
experience to move the business forward. It also reinforces the necessity of
getting the right ’employee mix’ for e-business.

Succession planning is also important for e-business organisations –
particularly for those that have a flatter structure where there is less room
for individuals to progress within the business. This is particularly the case
within the financial organisation where the step up to the executive tier is
quite substantial. Staff retention and recruitment needs to be monitored
closely and resource planning needs to be implemented. Instead of thinking two
weeks ahead, organisations need to focus upon what they will be needing in six
months time.

BT was acutely aware that it needed to offer employees attractive and
innovative packages to win the war for talent. The organisation therefore
focused upon using technology to develop flexible working solutions and to
ensure a greater work-life balance for its employees.

2. Employee buy-in

Employees have to buy into the concept, values and key objectives of the new
business to make it a success. The e-business organisation can only thrive with
a motivated and loyal workforce who believe in the company and the quality of
its output and/or products. Once on board, employees are potentially the most
effective champions of new products, services and technology across the

At Cable & Wireless, employees are bought into the project and motivated
by the promise of what e-business will mean to the company in the future. They
are also motivated by being part of something new and exciting with great
potential. Employees benefit by adding to their skills, gaining experience and
working in a setting where change is constant.

Similarly at BT, employee buy-in is achieved by emphasising the benefits
e-business provides for individuals as well as the business. Staff buy-in to
new ideas is gained by involving employees fully. Employees are involved in the
adoption of new packages and services, or are introduced to them via the
testing of products on specific populations and then by word-of-mouth.

Finally, at IBM, e-business information is distributed via frequent
communication and buy-in is sought from ‘champion users’ or cross-representation
from the user community.

3. Redundancy and boosting morale

Transition to e-business and the unpredictable nature of the business means
redundancies are more common. This can be an extremely difficult period for
many organisations that often have to lose effective and highly committed
workers. Constant change and the threat of redundancies in an e-business
environment can undermine staff confidence and make boosting staff morale a
priority. HR plays an important role in confidence building throughout such

The key to boosting morale at Sainsbury’s to You centres around sharing
information and celebrating successes. In such a busy business environment such
things are quite easily overlooked, so the company seeks to ensure that managers
reinforce these practices.

Through periods of uncertainty and redundancy, HR, in conjunction with
managers, should give the remaining employees incentives for the future.

When the e-business initiative of the financial organisation went through a
similar situation, they tried to give employees what they termed as ‘good
stuff’ at the end of the process so those who stayed had something to look
forward to. Some of this ‘good stuff’ has actually been put in place, such as
making Christmas Eve a day’s holiday for everyone and giving National Lottery
tickets in Christmas cards – little things to make people feel better.

4. Communication

Strong communication is another vital element for creating a successful
e-business organisation. In a business environment that is characterised by
uncertainty and constant change, effective communication has to be a constant.
Organisational changes, whether large or small, have to be supported by
consistent and frequent communications.

The HR team within the financial e-business initiative assesses the
effectiveness of internal communication to employees through an annual staff
survey and feedback is gained on how it can be improved.

At BT communication levels have also been developed – press announcements
are published simultaneously for everyone to see and the online news channel
for BT staff, BT Today News desk, is continuously updated. This effective
communication system enables the leadership team to get clear messages across
to its audience.

Cable & Wireless has learnt that communication is vital when an
organisation is undergoing so much change. In the past, it had been accused of
having ‘fuzzy communications’ and it has learned from that. The company now has
a communications department that has a good feel for what the business needs.
The head of internal communications sits within the HR department, so the HR
group is able to work with him through all the initiatives that are running.

5. Training and support

HR must develop a comprehensive training and development programme to
support all employees through the technological and cultural changes that
accompany the shift to e-business.

Several of the case study organisations have provided employees with
technological support to help them adapt to new working practices and acquire
the necessary skills to work in the new environment. BT ensured that employees
were provided with booklets to guide employees through all new online

This was particularly useful for staff who lacked either the confidence or experience
to use the new system immediately. A development and training portal, the BT
Academy, was also launched to improve transition employee skills.

Additionally, at IBM the collaborative computing team run a series of
non-traditional events in an attempt to illustrate how people can make the best
use of technology in the business environment. The events are designed to
improve ways of working and increase productivity and efficiency. Seminars and
workshops encompass technology, knowledge management, creativity and

HR must also develop an effective cultural change programme to encourage
such transformation. Cable & Wireless is engaged in development and
training around cultural differences, culture change, managing change and
managing cross-global boundaries. It has developed a comprehensive series of
internal and external seminars and programmes to tackle such issues. It is
encouraging for the organisation to note that this has been successful and that
these types of behaviours and ‘global mindsets’ are starting to filter
throughout the entire organisation.

Also at Cable & Wireless, but specifically within the HR department, a
series of programmes have been run this year around themes such as ‘the way we
work’, and ‘the way we’re going to work’. Internal seminars have also been
developed on ‘what we want to see’ and ‘what we don’t want to see’ to reinforce
the key aspects of the new culture.

Awareness sessions – lunch-and-learn, webcasts, and executive conference
calls, for example – are available to all employees and are taken up by a
significant number of them. E-learning materials are also widely available on
various topics.

Sainsbury’s to You transitioned the skills of current employees by
conducting training around working in teams and learning cross-functionally to
educate people on e-business and to bring them up to speed.

The way ahead

The research indicates there are a number of challenges involved in working
within an e-business environment. A recurring theme throughout all of the case
studies is the challenge of getting the ‘people bit right’. Human issues
permeate all of the key issues.

The role of HR is crucially important within e-business organisations where
transformation is so strongly dependant upon people skill transition. Effective
recruitment and retention schemes need to be developed to secure talent and
keep staff motivated and loyal. HR needs to develop the right ’employee mix’
for their businesses – blending employees with the right combination of skills
and experience.

HR must also develop comprehensive training and development programmes to
support employees through the technological and cultural changes that accompany
the shift to e-business and create strong communication channels throughout the
organisation. In particular, HR should follow the 10-point guide of working
within an e-business environment.

E-Business: What are the Human Implications of Transformation? by Claire
McCartney is available from Roffey Park priced £30.00. Contact Pauline Hinds on
01293 851644 or by e-mail:
Claire McCartney is a researcher at Roffey Park. Roffey Park is running a free
e-business seminar on 25 September. For details contact Pauline Hinds as above.

HR’s 10-point guide to sucessful e-business

1. Create an attractive set of
benefits and terms and conditions to secure talent with appropriate e-business

2. Create the right ’employee mix’ – a blend of people with the
new skills required and those with solid experience of the business

3. Make sure both sets of people feel equally valued

4. Monitor staff retention and recruitment closely – instead of
thinking two weeks ahead, focus upon what you will need in six months time

5. Gain employee buy-in to the new business by fully involving
staff – once on board, employees will be your most effective champion of new
products and services

6. Celebrate successes no matter how small

7. Boost employee morale in periods of uncertainty and downturn

8. Communicate all changes whether large or small, good or bad

9. Provide comprehensive training and support to help employees
adapt to the new business environment, including

– Technological support

– Culture change training

10. Provide constant support to business leaders, managers and
employees working in  an environment of
constant and rapid change

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