HR Roundtable: Making HR a true partner to your business

Participants:

Craig Warren, Global Head of HRSS, Rockwell Automation
Penny Munro, Head of People Process, E-On
Siv Oftedal, VP HR Shared Services, StatoilHydro
Keith Jackson, Senior Solution Consultant, Neocase Software Ltd.

SSON: What direction do you see your HR SSC taking in the form of HR Business partnering?

Craig Warren: There are two aspects of that for us: How do we help HR and take work away from them in the form of business partnering and the second is shared services as a delivery organization – how do we partner with the HR community and partner with the business to find out what they need from service level perspective? I think we are pretty much there in defining the service level expectations in terms of ‘what the business strategy is and how we align to support that?’ I think an area of opportunity for us is to look at the HR generalist role and identify ways to pull away some of that transactional and less-consultative work and find a way to allow their role to be more strategic. We have done a lot of work around Shared Services, but it wasn’t paralleled by work on the actual HR role.

Siv Oftedal: At StatoilHydro we have partnered with RBL for the overall HR transformation. A very important part of that co-operation is of course to develop the notion of HR as a true Business Partner. We are working along the same lines as Craig just described in terms of offloading the transactional, administrative tasks from the HR generalists, allowing HR in the business areas to take on a more strategic role.

We have taken a slightly different approach than other companies in the sense that we talk about all members of the HR network - no matter where they currently work – whether it is in corporate HR, in HR in the business areas or in HR Services in Global Business Services (GBS) as business partners, emphasizing the importance of that kind of skill-set for everybody. We fully realize that the competence profiles will be slightly different depending on the strategic portion of the role. This portion is of course less if you work on the transactional side, but we do expect every member of the HR network to understand the strategic direction of the company, where we are heading, the overall globalization ambition right now, and the distinct challenges of every business area.

Therefore we are sending the whole community to the same type of learning programs for that reason also because we think that over time we would like to rotate people from one part of HR to another. We are discussing right now whether or not all new recruitment for HR should go to my area, which is HR Services as part of Global Business Services (GBS) and that everyone should start there because that is where you get the full overview of the business. Much along the same lines as Rockwell, but with a slightly different definition of the HR Business Partner role, I would say.

Penny Munro: The situation at E-On is very similar to what we have heard already. We have the ‘Ulrich model’ in place with the centers of excellence. With the subject matters experts, in place – HR teams embedded in the businesses teams and a large HR SS Delivery team in place and we are now looking at a transformation programme which will look at expanding the Ulrich model to its full extent. In the same way that Craig spoke about delivery and transactional activities not taking place at the business - we are looking to reinforce that further - so I am in a very similar space in terms of what we have already heard.

If I look at the Shared Services center from my own perspective – I think it already has - I think it has a key role to play different functions in terms of moving our relationship from the business from a traditional customer/supplier relationship to one of much more of an equal partnership where we work to that helps us understand much more what the your business requirements are and offer the best solutions using our delivery expertise. Actually what you are asking us to do may not be our best solution. We can bring our expertise and solutions to the table and actually get involved with the business - saying ‘what you do causes us re-work…’ so actually we are pushing back and challenging the business behaviour and processes as well as challenging our own behaviours and processes. And saying we share the same goals and may not always see the same route to those goals and become a much more of an equal partner in the relationship instead of the customer expecting us to do as they say.

SSON: Is business partnering a concept that you can establish from the start when you implement a shared service center or is it a concept to aim for as the center develops more strategic roles? And how long does it take for you to get to the stage where you are now and what are the challenges on that journey?

Keith Jackson: I work with various clients that have not started it from the off. I think it has been an evolution, based on suddenly finding your very expensive HR division failing to get to anything strategic in the business because it is bogged down with requests for transactional information and hands-on-transactional-activity. In some ways it is about redefining the roles and expectations of what you want those people to do, by re-labeling them HR Business Partners or HR advisors and showing to people how easy it is to look at automation which subsequently demonstrates there is a lot of repetitive activity going on that could be easily carried out by people who are perhaps not as expensive and to develop HR people to be more strategic. So I think that is where it has come from, but it has taken two to three years for that concept to be embraced. That’s my observation so far.

Penny Munro: Our journey in terms of developing Shared Services has been about taking out all the transactional stuff and that was a very painful journey – given that it was very much about delivering cost savings in the beginning. I think the business partnering concept only comes with expertise and credibility and from my own perspective – I think we are only getting into that piece from a shared service operation, because we have been on quite a journey to prove that we can manage the transactional piece and start to develop and grow expertise and therefore been recognized for delivering expertise.

I am actually in the same position as Statoil, as we would see people coming into the Shared Services center who are linked into a career path within HR – or a broader Shared service career path. So by the time you get to business partnering – you have had an opportunity to get a great ground in HR transactional work as well as other opportunities such as case management. Some experience and you have got your grounding in terms of the generalists. At other times – I see us developing the shared services community from the base and perhaps then going onto developing a HR case management role into being a business partner and working very closely with the business. And of course you cannot actually go in at that level. And you continue to stretch and articulate this.

Siv Oftedal: I only joined StatoilHydro in the last three years – so basically I arrived to do the role that I am currently in, having a long experience as a HR manager. To me the whole concept of Shared Services was pretty new and I arrived one year after the new corporate SVP of HR had arrived.

During 2005 – 2006 when we both arrived the HR function of Statoil had little focus on the Business Partner role. The two of us have worked closely together to implement the model that we currently have and to drive HR transformation. I would say that we are now at stage two and going towards the next step. We clearly think we have a pretty well organized function right now. However, we believe that there are people in the HR line roles who are still doing administrative and transactional tasks, so we need to do a second clean-up or stage / version of the transformation. And we are using the exact same arguments as you just used to free up their time to really be able to play the role as the strategic business partners to the line managers. That is a good selling point as that is what everyone would like to do – but still some cling onto the old ways of working.

Craig Warren: Within our Shared Services organization transactional services alone will not get you into business partnering. You know what your outcome is and there are some ways of getting to that outcome and that involves a degree of business partnering.

Beyond that, if you move further into strategic roles in a shared services environment – some of these replicate roles of a business partner. We have things like expatriate management, which is very consultative and a very one-on-one model –so we really are advising on the policy, how to set up assignments, and resolve issues. Almost from the get-go once that has been deployed - it is a very business-partnering type of role. So if you have some consultative roles already some elements of your shared services centre could operate the exact same way as business partnering.

Penny Munro: I absolutely agree with Craig. We have been only able to get into those consultative roles through the journey of moving from transactional activities. Our Shared Service center moving away from the transactional – but we have only got here through that journey as opposed to taking them directly from the business and being able to demonstrate these – so that journey has been quite important – but they share the same skills.

Siv Oftedal: We have gone through the same type of development in the centers of excellence as part of the HR Shared Services group, but I agree that wouldn’t have been possible unless we started to build trust and confidence in the transactional and administrative type roles first.

Keith Jackson: I was going to say a lot of organizations struggle to move away from the transactional processes because they are not being delivered in a matter-of-fact, repetitive, accurate way. And a lot of that is due to people changing products with a lot of activity is being focused on how did we deliver these core transactional activities and your HR community get tied up in that and again can’t move over to the more strategic activity. There is still a lot of change management, a lot of heartache going around those things – you need the expertise of your HR professionals to be involved and they get sucked into it. I think what you are saying is great to hear – of that vision that you are moving to in terms of where you want to get to and it is good for us to hear that – but there is still a huge amount of activity going on in those transactional activities which will still encumber you.

Craig Warren: We use RBL as well and it sounds like all of us are using the Ulrich model – and I think the challenge with that is the assumption that is made about the delivery model. People are inclined to think that if you outsource or put transactional activities in Shared Services you will get it done independently and efficiently. This really undermines the business partnering, leadership and other skills required to get some of those transactional activities to a point where center of expertise and business partners can focus.

Keith Jackson: If your transactional activities are not good then you lose the confidence of the business… so when you want to move to the partnering model, people will say well you can’t even deliver on transactional functions on time, so I understand the heartache that goes with all of that.

Penny Munro: I have a question – in terms of your HR delivery – does it sit within your HR function or as part of an integrated Shared Services operation? Or is it on a global - Craig I think you mentioned a kind of Shared Service operation… do you think it matters in terms of partnering with the business?

Siv Oftedal: In our case at StatoilHydro HR Services in the Global Business Services organization (GBS) is hard - wired to GBS and has a dotted line to corporate HR. I’m a member of both leadership teams – so I meet with my colleagues in Corporate HR on a weekly basis and with my colleagues of GBS on a weekly basis at least. I think it is a pre-requisite that Corporate HR and HR Services as the service provider work very closely together to drive the change. If we hadn’t work closely together – it never would have been possible.

Craig Warren: When I started it was part of a multi-functional Global business services organization that included IT, finance and HR. And then about two years ago we actually de-functionalized shared services and re- functionalized by putting each of the shared services functions back within their respective function with hardline reporting to the function. The functions didn’t like having a separate shared services organization which is partly the reason why the decision was made to re-functionalize. I think single function shared services creates challenges in terms of the scalable things that let you articulate value. So if I am just looking at the HR function and supporting a continuous improvement resource –it is kind of hard to justify from a budgetary perspective. Whereas if you are scaling it across a whole load of multi-functional shared services organization– you can leverage that across the whole business and get a whole let of value and return on investment from that.

Penny Munro: I sit as a member of the HR Leadership team and a member of the Shared Services business services Leadership Team. I agree - for us the integrated model delivers some efficiencies and synergies that we can leverage over a shared services business. I think it also offers opportunities in terms of partnering with the business because you can create a kind of get a constructive tension between the functional ‘what’ and the operational ‘how’ - that we believe you get some real value from in terms of organizational - the kind of holistic view that we believe the sitting HR director and the MD of business services together provides value for us as an organization - but we have constant debates about where the value sits.

SSON: One of the things I have heard you speak about is change management and I am sure you have all experienced challenges around this. But as you become more strategic and begin to operate from a Business Partner perspective - is change management still an issue internally and from the Business?

Siv Oftedal: It’s still an issue but it is probably less of an issue now compared to what it used to be as we are able to deal with it better. We know where the resistance is to be found and how to engage better in those kinds of discussions. We have developed a storyline on the change journey - we call it the ‘rocky path from red to green’ - and it has certainly been a rocky path. My colleague Eli Dalsbù, who is the head of the HR processing centre - she and I have worked together since I arrived at StatoilHydro. Eli reminds from time to time when the two of us entered the room with HR colleagues from the business areas, everybody would look around either at their shoes or up to the ceiling during the first couple of months after the establishment of HR Services. We had Accenture as a the service provider helping us with our change project – both to set up the processes, develop the structures that we needed and also the change management part. It is quite different now as we have earned their respect, and demonstrated our ability to deliver and get quality into the processes and deliverance – but it is a constant journey.

Craig Warren: I think it is a constant challenge but it arises from a difference of perception around where we are going. So I think I we have certain things from our delivery perspective that are mature. We’ve been doing it for a while, we have outsourced or insourced – it’s a mature process – people have become accustomed to it, then there are no issues with that. I think that situation creates a change management issue if you are looking to expand. So my fundamental belief is the discussion I should be having with senior HR leadership is around why shouldn’t a HR activity be done in the Shared Service center? That is not necessarily where they are at. I have come to understand that if you start with and come into that and really think about what is your vision and what is the change management plan around realizing that vision because other HR leaders may not share that and may say - ‘we got it – we’re done’ - but you’re saying – ‘no we are not done, there is still this other stuff’ and that can create a barrier to moving other things forward.

Siv Oftedal: One of the reasons for resistance is that I don’t think we are good enough at building the business cases. When you think about it, it’s relatively easy to build a good business case around economies of scale related to transactional services - it’s slightly more difficult to build the compelling business case around the economies of skills for consultative / advisory type services. It’s certainly a very important skill to have if you want to be in this business … the change management skill that is.

SSON: And what about bringing talent with you and developing talent within the centers? Is it a priority within your organization to develop talent within or are you more likely to bring more talent in from outside the organization?

Penny Munro: I see it is a mix – I think as we have progressed on our journey in terms of developing expertise we are moving into a position where the HR community would see Shared Services as an interesting and, exciting and intelligent place to work. I think in the early establishment when it was purely transactional – it was seen as low-end administrative tasks. I think now when you move to a more partnering model with "high value" delivery activity taking place have centers of excellence, you get much more significant opportunities to develop talent. Wherever we have opportunities in the shared services center - it is the only a place where you can get significant line management and operational experience, so I think that offers a huge opportunity to HR professionals to work with subject matters topics where they are experienced but actually to get some operational management, people-culture-change, budgets etc. , so I do see us moving talent from HR shared services to function and from the function to the shared service center, but also because of the integrated model about challenging ourselves about bringing the expertise from the other shared services operations, whether it is finance or and IT for example - bring that expertise in and move our expertise out – so I see it working both ways. I am very positive about the opportunities that are there for the taking if people are willing to accept less traditional career-paths and perhaps get them to the same place – but through different routes.

Siv Oftedal: It is very interesting to hear how you describe it, and we have a very similar story. Once we established a Shared Services center, there were many people trying to get out of it. So we lost people initially and had to recruit externally. However, we looked upon that as an opportunity to hire great staff. And we have brought along a lot of excellent and very talented people and now we are starting to see that our positions are becoming more and more attractive also for the internal job market. For instance I just filled a position as head of people and leadership development with one of the highest ranked HR people in the company. This also sends very good signals as she comes from corporate HR, is pretty young and very talented – so that has been an interesting development and it is very encouraging to see that.

Keith Jackson: I think that one of problems is that Shared Services had such a negative perception. The term is perhaps wrongly used - I mean I know that is what it provides, but it conjures up images of call-centre activity and I think that is what it gets such a lot of bad press. I know have done a lot of work with the National Health recently and some of the trusts - strategic health authorities. They advertise for HR business partners, offering a 6 month contract – they want to bring somebody in to work with their core HR team, but they don’t see it as a permanent activity - they just want somebody to bring in some expertise. And so the people that are stuck in the Shared Services environment – they don’t see the progression. This is a huge organization, which has 2 million employ, but perceptions are still there and I think it is important to change the language and the vocabulary and events like this broaden people’s vision as to where Shared Services are going.

Penny Munro: There can be a very negative view of that transactional space – the roles can be seen as are very constrained and they are process-orientated. But one of the things we have worked very hard on both within HR Shared Services, but and as part of the broader Shared Services operation, is around developing the customer experience. So in the same way that we work with our front-facing business to external customers - our customers do not generally have a choice but to use our services – and they can therefore be much more demanding - they are not always there because they always want to be there.

We have really worked hard on the importance of the customer experience – about how we answer calls, about ownership and about empowerment and really starting to give the people working within Shared Services the message about ‘put yourself in the customer shoes…make the individual customer feel like an individual person and not a payroll number…’ and actually challenge the processes and the framework where they feel it is not working like they are delivering the wrong answer to the individual and we have seen a huge change in terms of the empowerment and the satisfaction colleagues can get. That is giving individuals by being able to do that in a more getting satisfaction from the way they answer a call to just processing and transacting and that has been a big change for us.

Its about ownership and some of the stuff is really simple – rather than asking a colleague to call back because they had come through to the wrong part of the SS operation, I hate IVR and we have a complicated IVR system - originally people would say ‘ oh you don’t want this part of shared services, you have to dial another number..’ and instead of handing that call off, why not say ‘ I’ll phone the colleague, and transfer and I will explain to my colleague who you are and what you query is and then transfer you.’ It is a really simple thing, but actually makes a huge difference to the colleagues eth employee on the ‘oh I now have to get on the phone again..’ So we have done a lot of work around that whole experience. We have implemented net-promoter score as a way of measuring customer experience and learning from some of the really good retail businesses around developing strong customer experience and this is just about learning form really excellent banks who provide online services and embedding into the way we do business from a shared services perspective.

Craig Warren: We have done some of what you are talking about and we have also focused more on the concept of a shared services professional, which was probably looked upon as a transactional shop and not a professional – mixed outsourcing with internal delivery and expanded the portfolio of services we offer. It is actually possible for an individual to have a fairly fulfilling career within shared services because there is a lot of complementarity among the skills and competencies of our various roles – and we can teach the technical system with enough time. At a lower level, we focused more on cross- training and developmental things to create opportunities for someone who wants to stay in shared services has that process orientation and doesn’t want to work as a HR business partner or specialist. In the process of doing that we also position people with a broader range of skills and competencies to go to other functions outside of HR.