Introduction The opening chapters have raised the issue of business model change and noted its implications for the structure of HR and the choice of deliverymodel.. A key issue therefor
Trang 1excellence members with some existing HR team members departing and “newblood” being recruited We believe some HR leaders find such a “clinical” processdifficult and therefore “mend and make do.” To overcome this reluctance the HRleader will need to possess a strong drive to really improve quality – what we term
an “Excellence Mindset.” Possessing the mindset may not be enough, however, asreplenishing will require budget Thus if the HR leader is part of the GoldenTriangle18outlined in Chapter 6 then it is more likely that they will be able to leverthe power and influence to champion any temporary budget increase
The fifth and sixth challenges posed the question of whether there is anunsuitable organizational culture and unreceptive client/line managers Put verysimply, our research indicates that the 3-Box model does not suit all cultures Insome cultures the concept of the strategic Business Partner would be beyond theconception of even the most powerful line managers This may be where HR is farfrom Golden Triangle membership and, like it or not, is seen as the “hire, fire, andtrain” function Very technically based companies may be resistant to a customerservice perspective and find it difficult to relate to Ulrich’s perception of value.The seventh challenge that we posed raises the issue of line indifference andresistance to HR restructuring In terms of delivery, HR would appear to be inquite a difficult position at present and in the near-future within organizations Inorder to respond strategically to the recession HR clearly needs a well-oiledstrategically informed and high influence delivery model Our research indicatesthat it is clear that going into the recession many HR models were in need ofrefinement The recession may well make the implementation problems moreproblematic as energy is directed at recession solving problems and not on thenecessary relationships and networking with client/line managers that tie a 3-BoxModel together and make it work effectively Also if line managers sensed that, inthe recession and immediate post-recession climate, HR saw its delivery model as astrategic priority, then they may write off HR as a serious partner HR Directorswill need to put their energy into correcting and re-balancing the model by stealth!
2 change HR from a process-specific function into a business with its own Profitand Loss and concomitant transparency and ROI visibility
Ulrich’s ideas clearly have given much impetus to the HR function from the late1990s They have propelled it forward and helped it look at its contribution tovalue and the bottom line However, by thinking more deeply about the changingvalue of knowledge inherent in business model change, and about the capabilitiesthat HR Directors need to align the HR contribution to this, we argue that we nowneed to move beyond this perspective
Trang 2In Human Resource Champions Ulrich does not mention the issue of business
models in relation to HRM He mentions strategic business units (SBUs) as thefocus of attention twice – once in the context of a chemical company and once in apharmaceutical company An SBU is an entity within an organization that is givenresponsibility to serve a particular part of the business area and is allowed todevelop its own mission, objectives, and strategy The term “unit” relates to a part
of the business that has a defined external market that enables a separate strategicplan to be developed and so often relates to large organizational structures such as
a whole division
Ulrich argues that SBUs should be used as the level at which HR businesspartners should be organized as “ the initial point of contact for each business
unit’s line managers” and also interfaced with the central centers of excellence.19
Using Johnson and Johnson as an example, he notes that SBUs often
have independent philosophies and operating histories as well as unique
customers, products and cultures.20
We believe that although these SBUs may be pursuing slightly different strategiesand potentially operate to a different business model, these operations can be seen
as “components” of the broader performance logic that exists once all such modelsare brought together under the “architectural” (organization strategy level)business model
However, aligning HR to the higher level business model is by default acomplex task, as the alignment has to deliver a degree of coordination across whatmight be conflicting “component” interests
Not surprisingly, then, this chapter has signaled the crucial importance – interms of the long-term success of HR delivery systems – that the system is linked toeffective Relationships, Networks, and Influence – both within and outside of the
HR function The balance of relationships between the three main components ofthe HR structure needs to be optimized and maintained carefully This is certainlythe case in terms of Business Partner/Expert relationships These positive orotherwise relationships will often be based on good personality “fits,” so HRDirectors need to be alert when influential jobholders depart their function as thepositive balance may erode
There is also a warning for HR Directors They must avoid or navigatesuccessfully what we term a number of Fatal Flaws One fatal flaw that emerges,when we look at our data on the implementation problems faced, is that we believe
it is possible that there is a double capability problem that is making
implementation currently very difficult:
1 not only is the capability of the Business Partner in question,
2 the capability of the line to use the Business Partner appropriately can bequestioned
The line behavior problem is not just one of education – it might be a fatal flaw inthe model in that they will always need to have low-level transactional solutions,but solutions provided by an individual HR person and not a service center
Trang 3A second fatal flaw might be that the key to success is not having the “boxes”per se, but having a clear logic as to how the boxes must be joined together andhow they are used interdependently This “way of working” is very dependent notjust on the formal structure, but on the networks of connections and relationshipsthat key players inside and “on top of ” the boxes have Historically these networks(often held by a handful of key players) help glue the system together, handle theproblems of power and influence, and help solve the difficult issues that sitbetween boxes.
It is important to note that a key issue for HR Directors in to “optimise” each
of the three boxes in the model, as they tweak the roles and structure, rebalance itand re-educate the users and operators accordingly They also need to be able torespond flexibiblity to events as they happen – for example talent shortages – andre-assign responsibilities across the model Finally, to the extent that there is a newgeneration of line managers who are willing to drive the people agenda, and an “airtraffic controller” sitting on top of the model handling the optimisation activities,then they may be more or less willing or able to use external consultants to runtheir Centres of Expertise and devise strategy Similarly, if they have entered early
on into service level agreements and outsourcing arrangements that restrict thisability to learn how to optimise the model, then they may experience problems ofexecution Corporate stewardship of the 3-Box model can be hampered by thesesorts of considerations
Fatal flaws are design faults that are accidents waiting to happen – a subtle set
of events can disrupt the networks and power and knowledge that have made themodel work in the past The credit crunch might have proved to be this accident –attention was distracted (understandably) from managing the health of the HRdelivery model, to managing the consequences of the recession A possible
outcome of such distracting pressures is the emergence of a “sick” 3-Box modelsystem The problem is one of reputation – once the model gets sick, the line willlose belief in it and it might take years to repair the reputation hit
As a final observation, however, we would observe that all these design faults
can be fine-tuned and hopefully corrected before they wreak real damage Leading
HR involves surfacing the key networks and power relationships that currently
make the delivery model work and surfacing the “design intelligence” of the keyplayers that currently (and in the future) help to tie the boxes together and keepthe system healthy
The next chapter reviews the experience of Nestlé in evolving its HR deliverymodels Chapters 4, 6, 8, and 9 then describe the key activities and capabilities that
are necessary for Leading HR In introducing the chapters it is important
to stress:
1 First and foremost, the activities outlined in each chapter may be viewed as atotality that, if all are present, should provide for a high level of proactivitywithin that HR function There is a logic that links each set of capabilities tothe next, and this logic has dictated the order in which each chapter is
presented
Trang 42 However, few HR functions, at the present time, would have “mastery” of allthe capabilities outlined.
NOTES
1 Becker, B.E., Huselid, M.A and Ulrich, D (2001) The HR Scorecard: Linking People,
Strategy, and Performance Boston, MA: Harvard Business School Press.
2 Becker, B.E and Huselid, M.A (2006) Strategic human resources management: Where
do we go from here?, Journal of Management, 32: 898–925.
3 CIPD (2006) The Changing HR Function: The Key Questions London: CIPD.
4 Ulrich, D (2008) The three HR paradoxes, Human Resources, January, p 5.
5 Joinson, C (1999) Changing shapes – Trends in Human Resource Reorganisations, HR
Magazine, March 1999.
6 Personal correspondence between Paul Sparrow and Dave Ulrich 16th October 2009.
7 Joinson (1999) p 5.
8 Ulrich, D (1997) Human Resource Champions: The Next Agenda for Adding Value and
delivering Results Boston, MA: Harvard Business School Press p 38.
12 Ulrich and Brockbank (2008) p 6.
13 Reilly, P (2006) HR transformation – Pitfalls of the Ulrich model, People Management, 23
November 2006, p 36.
14 Higgins, N.J (2007) Thought leadership: Real HR transformation, Journal of Applied
Human Capital Management, 1 (3): 19.
15 Hird, M., Marsh, C and Sparrow, P.R (2009) HR Delivery Systems: Re-engineered or
Over-engineered Centre for Performance-led HR White Paper 09/05 Lancaster, UK:
Lancaster University Management School.
16 See: Daft, R (2001) Organization Theory and Design 7th Edition Ohio: South Western Publishing; and Child, J (1984) Organization New York: Harper Row.
17 See: Granovettor, M.S (1985) Economic action and social structure: The problem of
embeddedness, American Journal of Sociology, 91 (3): 481–510; and Uzzi, B (1996)
The sources and consequences of embeddedness for the economic performance of
organizations: The network effect, American Sociological Review, 61 (4): 674–98.
18 Hesketh, A and Hird, M (2009) The golden triangle: How relationships between leaders
can leverage more value from people, Human Resources Business Review, 2 (1):
24–37
19 Ulrich, D (1997) p 210.
20 Ibid., p 84.
Trang 5Nestlé: Reflections on the HR Structure
Debate
MARTIN HIRD AND MATT STRIPE
3.1 Introduction
The opening chapters have raised the issue of business model change
and noted its implications for the structure of HR and the choice of deliverymodel A key issue therefore is the business utility of the delivery model that
Strategic imperative:
The current dominating influence of the Ulrich 3-Box Model upon HR structures is amply demonstrated by the frequency with which the topic occurred Both HR and operational managers demonstrate familiarity with the characteristics of the model and what it could imply for the HR contribution.
However, we are witnessing some advocacy for thinking through more carefully whether the introduction of the 3-Box Model structure would enable HR to lead and support the business model Does it fit what HR aspires to achieve?
46
Trang 6The key messages that emerge from this chapter
1) It cannot be taken for granted that there is enough of an experience-base to know how
to work the Ulrich model In practice, this model itself models very complex
mechanisms Making these mechanisms operate together like clockwork has been something achieved by some, yet has proved challenging to others.
2) Maintaining a true course through history requires considerable forethought Far from being planned, most changes in HR structures are organic Ideas get developed within small communities of practitioners, the network of “on-side” practitioners grows, business forces bring renewed integration pressures, consulting propositions evolve, and the key proponents themselves move in their careers The frameworks to
coordinate structures are often not widely understood.
3) It has long been recognized that the quality of business partners is a key success criterion for HR Delivery Models, and therefore so is the role of assessment
processes – a fair proportion of existing professionals are inevitably found wanting and cannot make the journey.
4) Account management skills and an attention to the “what” and “when,” as opposed to the “how” of HR, become a differentiating characteristic Much of the benefit comes of course not from the structure itself, but from the quality of supporting infrastructure such as service level agreements, e-enablement arrangements, and the protocols that ensure coordination between each part of the structure.
5) The strategic priorities within HR Delivery Models have themselves evolved over time – prescribed models continue to change The need for tight operational oversight was overlooked in early iterations of the delivery model.
6) There is still a need for “optimization” of HR Delivery Models, and this issue requires
careful thought in terms of Leading HR, not least because duplication could
unnecessarily increase costs within the HR function as well as leading to ongoing conflict There is still an underlying belief that new HR Structures will and do lead to cost economies, but questions remain about whether these HR Structures enable HR professionals to play an effective corporate role in managing the complex problems that will emerge from an era of global recession and beyond.
7) The 3-Box Model is not a globally accepted HR Structure concept, although it
continues to find more global attention and relevance Global complexities in business structures often mean that the HR organization in operation can have a series of
three-box models within a “macro” three-box model Practical decisions about the
nature and organization of geographically diverse resources based on size, complexity and geographic location units and sites, and the level of local HR capability require bespoke solutions.
8) The Shared Services box should be viewed as broader than just an HR problem Many functions in global corporations will centralize (either outsourcing or keeping in-house) but using a more flexible range of locations.
Trang 7The key messages that emerge from this chapter: (Continued)
9) Different capabilities across the global dimension will mean that business partners may
be designed as a series of tiered roles driven off a common competence model.
In order to act in a truly strategic way, there may need to be a tier of “junior” business partners to support the lead HR players Centers of excellence may well become more differentiated, based around pragmatic thinking about local capability.
10) The 3-Box model emerged inexorably within HR, driven by, for instance, the emergence
of comprehensive HR IT systems via providers Ulrich’s writing provided a clear insight into the different roles that HR can play, with a particular emphasis on that role being strategic in nature
On September 11, 2008, my taxi – as the lead author of this chapter – dropped me
in front of Nestlé’s imposing headquarters building in Vevey, Switzerland Mymind turned to the various experiences I had shared with my host, Matt Stripe,currently Assistant Vice President for Human Resources Nestlé SA Matt and I hadfirst worked together at Matra-BAe Dynamics in 1996 The Company was then arecent creation from the first major structural joint venture that British Aerospacehad embarked upon Matra-BAe Dynamics or MBD as it became known was,upon its creation, the largest missile defence company in Europe Matra itself waspart of the Lagadère Organisation which held interests in television, print media,motor vehicles, and defense BAE Dynamics had an operational headquartersbuilding at Stevenage in Hertfordshire, whilst Matra’s operational headquarterswas at Velizy just outside Paris Matt held a series of HR positions at MBD between
1990 and 2001 In 2001 he and I also worked together within the ProgramsDivision of what had become BAE SYSTEMS (following the merger with MarconiDefence) In 2002 I left BAE SYSTEMS and joined Tag-McLaren and then in 2003was employed by Royal Mail However throughout these changes Matt and I stayed
in close contact and retained our shared fascination in HR Structures and theircontinuing evolution In 2003 Matt left BAE SYSTEMS to join Nestlé’s
Confectionery business (then Rowntrees) in York and gained promotion rapidly tobecome HR Director of the UK Confectionery Division In 2008 Matt had beenappointed HR Assistant Vice President for Strategic Business Units and was based
at the Company’s headquarters in Vevey
So what was the purpose of our meeting in September 2008? Given ourmutual interest in HR Structures, we wanted to explore and evaluate how thosestructures had evolved over the last 10 years or so Two days of discussion andexploration followed By virtue of our joint experiences, this chapter is partially acase study and a case history, but it also documents how our thinking has evolved
in terms of where HR Structures may develop in the future
In the context of HR Structures, it is also informative and indeed intellectuallystimulating when one considers the truly global nature of Nestlé It is the largestfood corporation in the world by a very large margin; it employs 280,000 people
Trang 8and operates in 84 countries with 456 factories Sales in 2008 were 109.9 billionSwiss francs yielding a profit of 10.6 billion The headquarters in Vevey employand accommodate over 80 different nationalities Structures at Nestlé are thereforenecessarily complex to manage its global leadership position Consequently, HRStructures, in terms of their architecture, require much thought and a good level ofintellectual horse-power to get them right!
In this chapter we focus to a great extent on the emergence of the “3-BoxModel” and its application as a focus for HR Structures We will discuss, based onour experiences, the strong linkage between the 3-Box Model and Professor DavidUlrich We believe that the model is in many ways an inevitable design pattern for
HR and that the model was present in some companies from the late 1980s/early1990s onward The model, then, predated the publication of Ulrich’s seminal book
Human Resource Champions.1
We might expect there is enough of an experience-base to know how to workthe Ulrich model – but as Matt and I reviewed our experiences it became clear thatthis cannot be taken for granted In practice, this three-part model itself modelsvery complex mechanisms.2It seems that making these mechanisms operatetogether like clockwork has been something achieved by some, yet has provedchallenging to others Research presented in Chapter 2 questions the ease withwhich the Ulrich 3-Box model can be implemented
In this chapter we add substance to the debates about HR Delivery Modelsand Structures introduced in Chapter 2 We draw upon our insights into practice
at a number of organizations we have worked at, and with The chapter consists ofthree sections:
1 The case history of our experiences of structural change/architecture in HRdrawing upon some shared, some individual, observations at MBD, BritishAerospace/BAE SYSTEMS, Nestlé, and Royal Mail
2 A review of where HR Structures currently find themselves and the issues thatneed to be confronted
3 Reflections on how structures have evolved over time, including the
conclusions and recommendations that emerged from our discussions
3.2 Early experiences of HR structure change
In recounting history, it is instructive to consider just how planned, or organic,changes in HR structures really are Ideas get developed within small communities
of practitioners, the network of “on-side” practitioners grows, business forces such
as mergers bring renewed integration pressures, consulting propositions in theBPO market evolve, and the key proponents themselves move in their careersacross divisions and organizations Maintaining a true course through historyrequires considerable forethought
As we talked at Vevey, Matt Stripe recalled the history of how thinking about
HR structures developed across his network He explained when he first becameaware of the imperatives driving HR Structural Change:
Trang 9I think around 1997, when there were fears about the inflating costs of HR,
I started to become a bit more aware of what HR’s role was currently and likely
to be in the future My bias, at that point, was software engineering, as Ioriginally come into HR as a software engineer, and so I was more interested inthe systems part of it at that time I got quite interested in the values of theIntranet, the use of Shared Services and how HR could make its contribution inthose areas So in 1997 we started thinking about reorganising HR at MBD UK
I can remember designing an Intranet quite quickly
He continued:
At that time the Internet or Intranet didn’t really exist within the
organisation I knew The Internet was still pretty new, and those who wereinterested in technology were starting to use software like Microsoft FrontPage There were shared drives that were starting to be used as a mechanism
for sharing information The platform just wasn’t there I had free rein, at thetime, to put some software in We just moved very quickly – I remember doing
it every weekend at home – designed the first Intranet, which we communicated
to the MBD HR team at one of our Bi-Annual Mini Conferences So that wasthe kicking off of MBD’s Shared Service box
So, in 1997 the main focus of MBD’s HR Structures was upon HR teams, colocatedwith their operational clients The lead members of those teams focused theirattention on individual members of MBD’s Management Committee (six in total),and the HR team leaders attended directorate senior team meetings as full
members, equivalent in status to the senior managers responsible for finance,commercial/procurement, project management, and so forth They were in manyways embryonic business partners Indeed, their unbroken reporting line was totheir client, and their dotted line to the MBD UK HR Director The HR teams also,however, carried all transactional/process responsibilities – they had their ownclerks and administrators This increasingly appeared to be uneconomic – the ratio
of HR staff to general employee was not particularly spartan!
As a consequence, throughout 1997 and early 1998, the HR teams focusedincreasingly upon more strategic and policy activities, with their clients andtransactional HR activity being moved to a central “hub.” If one were to
summarize the HR structural trends by late 1997, the scenario was one of HRadvisors being colocated with their clients, increasingly centralized HR
transactional work, which relied to an increasing extent upon IT support and alsowas located physically close to the transactional hub There were also a smallnumber of relatively senior specialists with responsibility for learning and
development, rewards, pensions, and industrial relations
However, these changes were quite organic There was an overall notion of aframework to guide the changes but that framework was not widely understood.Perspectives were going to change in the near future! In early 1998, at one ofthe Bi-Annual HR Conferences, referred to earlier, the key guest speaker wasAdrian Walker, then a senior HR figure with the highly successful Sun
Microsystems In his keynote address he introduced the senior MBD UK HR Team
Trang 10to the work of David Ulrich, the book Human Resource Champions, and the notion
of what was to become called the “3-Box Model.” The content of what Adrianpresented was extremely relevant to where MBD UK HR was heading His inputgave all the senior HR team a framework to use in taking HR Structures forward
Human Resource Champions surely had a surge of sales in the Hertfordshire area!
Events moved rapidly during 1998 Matt Stripe describes that change process:
With Ulrich, we had something to hang our ideas upon We took a look at
the central hub and decided that we had to drive forward at a quicker pace One
of the first changes we made was to establish a software team who could put thetechnology in place to actually make the Shared Server work properly!
Then there was the re-establishment of what would now be called ExpertServices, because at that time MBD UK, under its previous HR Director, hadtaken large parts of rewards and compensation, recruitment and learning anddevelopment, and put them into the generalist teams We re-established notonly the Shared Services piece – and got that working – but then re-establishedreal, central Expert Services in the same areas
As MBD UK restructured and reoriented its HR proposition there was, of course,the need to consult with French joint venture partners at Matra Matra HRoperations were very much site-based, with a major emphasis upon
employee–union relations and health and safety They were less interested in thenotion of a transactional center They also took a more conservative and skepticalstance toward the notion of senior and powerful “Experts.” In summary, anincreasingly clear 3-Box Model “emerged” at MBD UK, but there was littlemovement across the Channel in terms of a new HR Structure emerging in France
3.3 British Aerospace Group involvement
What happened next? By late 1998 MBD UK’s 50 per cent owner and “cultural”parent, British Aerospace, became aware of the changes in HR Structure beingimplemented at MBD Matt Stripe describes the interest:
Well, we started to get a little exposure around that time (1998) because MBD
UK was small in terms of the British Aerospace context (3,500 employees) andbecause we were in a joint venture and weren’t bound by the same sort ofrestrictions of 100% owned BAE divisions So we had a bit more freedom Wewere able to put the model in place and most of MBD UK’s policies becameself-developed rather than being direct BAE policies
In fact, in 1998 MBD UK was part of one of the four “Groups” that constitutedBritish Aerospace globally, namely, the Land and Sea Systems Group The HRDirector for the Group was Tony McCarthy (he is currently Group HR Director atBritish Airways having previously also been at Royal Mail), who was intrigued byMBD’s structures, and visited Stevenage to sample the impact of the changes thathad been made there
Tony McCarthy was impressed by what he saw at MBD UK and asked the HRDirector for MBD UK and Matt Stripe to present their developments at the Land
Trang 11and Sea Systems Senior HR meeting At that meeting the structural approach ofMBD UK was well received Shortly afterward, the MBD approach was presented
to the Corporate Senior HR meeting chaired by Terry Morgan, then the Group HRDirector for British Aerospace Morgan was enthused by both the MBD approach
and the accompanying outline of Ulrich’s ideas as expounded in Human Resource
Champions He initiated a commitment by the British Aerospace Senior HR Team
to explore, very positively, the feasibility of British Aerospace HR moving to a3-Box Model Chris Dickson, Corporate Employment Policies Director, was taskedwith undertaking the feasibility study
The year 1999 was to be a momentous year in British Aerospace’s
development, and these corporate developments were going to impinge upon the
HR structural developments The significance of the year was to revolve aroundthe announcement in the autumn of 1999 of a merger between British Aerospaceand Marconi Defence creating what would be the second largest defense company
in the world The resulting company was to be titled BAE SYSTEMS
Within HR there was another significant development Chris Dickson wasreporting back that there were going to be major issues regarding the installation
of a common HR structure These issues were mainly related to the differing range
of legacy IT systems that existed across the various divisions of British Aerospace.However, during 1999, Terry Morgan had been approached by Xchanging, one ofthe earliest BPO organizations, founded and led by David Andrews When Morgandiscussed the issue of legacy IT systems with Andrews it was claimed by Xchangingthat they could overcome the issue and create a common “People Portal” forBritish Aerospace, using their IT expertise
The Xchanging proposal in essence consisted of British Aerospace andXchanging creating an outsourced 50/50 joint venture that would be responsiblefor all so called transactional HR activity Discussions with Xchanging continuedthroughout the merger machinations and an agreement was signed between BAESYSTEMS and Xchanging to create the joint venture which was to be named
“Togethr.” Togethr commenced formal operations in 2001
Over 300 former British Aerospace and Marconi Defence HR staff moved out
of their parent companies and joined the new operation Corporate internalexperts were confirmed and appointed in areas such as learning and development,reward, corporate and social responsibility, and employee relations
To ensure that the remaining business partners were sufficiently prepared anddeveloped for their role, a tender was announced for a major Business Partnerdevelopment program linked to a Business Partner assessment process that wasprovided by external HR consultants It was stipulated that the business schoolsand consultancies who responded with a tender proposal had to be able to
demonstrate a significant presence and experience in both the United Kingdomand the United States The reason for this was that the new BAE SYSTEMS hadover 20,000 employees based in the United States
The contract for the program was given to the Global Consulting Group fromthe University of Michigan, whose proposal was led by Professor Wayne
Brockbank and project managed by Matt Stripe The program commenced by
Trang 12focusing on understanding the business strategy, then linking HR and businessstrategy and culture and management It provided processes and tools for
diagnosing and creating organizational capability, as well as organizational designand consulting skills and change management The program also required thebusiness partners to undergo an assessment prior to being given a place on theprogram to ascertain their current capability This assessment identified a number
of business partners who would not make the journey and therefore those
individuals were placed in other roles or outside the organization The Programwas judged to be extremely successful both in presenting HR business partnerswith a vision and in equipping them with the skills, knowledge, and competencesfor their new role
Thus, in a period from 1999 to 2002, British Aerospace/BAE SYSTEMS wastransformed in organizational terms, including the completion of a historicarrangement with Xchanging Matt and I reviewed that exciting, but in many waysdaunting, period that we shared and considered some of the key learning that hademerged from the HR transformation centered upon the creation of Togethr For
us, the key lessons were the following:
1 It was crucial that in a structure such as that at BAE SYSTEMS it needed to be
clearly understood by all that business partners focus upon the “What” and the
“When” whereas Togethr focus on the “How.” As an aside, we still believe this
distinction of account management is a crucial piece of understanding that aBusiness Partner needs to have We still sometimes witness business partnerswasting time and energy meddling in how the process is being done instead oftrusting the shared service to do it effectively
2 The creation of an effective “People Portal” was a major force in gaining thesupport of operational/client management professionals to the changes instructure Initially operational managers at BAE SYSTEMS had deep
reservations about the majority of their HR teams moving into transactionalcenters The accessibility and scope of the People Portal undoubtedly easedthose doubts and reservations
3 The financially prescribed service agreements that underpinned the new HRStructure drove a much stronger cost awareness within the residual HRbusiness partners at BAE SYSTEMS, and it was this which served to increasetheir internal credibility with their clients
At this point it is important to signal our awareness that in recent times – now adecade since the initial changes were made – the in-house HR resource at BAESystems has increased quite substantially, to provide more operational support for,the initially lean, HR Business Partner structure This move accords with recentobservations by David Ulrich that HR structures may require five legs to the
“stool,” including an HR operational execution resource, to give that support tomore strategically oriented HR generalists BAE Systems seem to have recognizedthis requirement It was not part of the discussion though back in 2002
Trang 133.4 New experiences at Nestlé Confectionery UK
In July 2004 Matt Stripe joined Nestlé as Head of HR for their Confectionerymanufacturing facility in York (formerly the main site for Nestlé Rowntree) As wementioned earlier, Nestlé is the largest food company in the world, employs280,000 people, and is based in 84 countries So now the context was a truly globalcorporation Matt found Nestlé Confectionery very different to BAE SYSTEMS interms of HR culture He describes his first impressions:
It was a complete shock when I arrived at Nestlé Confectionery, in the sense
that coming from the BAE model that we’ve just described [had meant] a veryclinical 3-Box Model, where you had Shared Services being delivered andmanaged in a very tight budgetary manner There were also clear and crispservice level agreements with a comprehensively understood divide of roles andresponsibilities The new BAE Structure had been embryonic, but HR at thecompany was a powerful function and frankly had strong standards of
excellence Nestlé had some good HR mechanisms in place, but it was verydifferent to BAE [in the other regards]
Nestlé UK’s operation focused principally on two elements: confectionery
(representing 60 per cent of turnover) and beverages Nestlé also had a number ofsister organizations, such as Purina and Nestlé Waters, operating in the market.However, these companies had a different reporting structure and therefore werenot coordinated through Nestlé UK Nestlé is an organization in which growth hasbeen partially built on acquisition, for example, the acquisition of Rowntrees andMackintosh in confectionery In terms of culture, Nestlé has a strong commitment
to its people and is a long-term employer with, in essence, a “cradle to grave”employment philosophy
This culture was reflected in the HR team that Matt Stripe joined On thewhole, the members of that team had joined into a classic “personnel”
environment, but it is important to record that there had been changes to thatapproach, and a Shared Service model (one of the three legs of the 3-Box model)had been introduced around 2002 Matt Stripe describes his initial perspective onthe situation thus:
My initial observations of the whole model were that Shared Service, in
other words the administrative arm and their centres of excellence, wererelatively well put together But their efficiency and effectiveness could beimproved Shared Service had a generous level of resourcing and not a
particularly strong IT structure, but it was evolving in the right direction I hadstronger reservations in terms of the generalist HR population There were a lot
of them and many had been used to undertaking tactical and transactionalactivity They were struggling with the idea of a Shared Service handling that
So, there was a lot of duplication of effort
From his arrival at Nestlé UK in July 2004 to his move to Vevey in August 2008,Matt occupied three roles in the United Kingdom Initially, he was appointed as
Trang 14Head of HR for the York Plant Then in 2004 he was promoted to Deputy Director
HR for Nestlé Confectionery UK, which involved responsibility for five locations.Then in 2006 he became the Division HR Director and led the restructure ofmanufacturing capability, addressing the archaic working practices that hadexisted, in order to ensure the Division was fit for the future However, there was acontinuity of focus during this 4-year period that always seemed to revolve aroundstructural changes to UK Confectionery HR The changes that were made aresummarized below
The structural changes in UK Confectionery HR
development program to raise capability was put in place.
Clearly, all these elements of HR architecture are still being reviewed at Nestlé UK,under the leadership of the UK HR Director Steven Battalia Steven Battalia andMatt Stripe worked closely on the issues together However, for Matt Stripe, amove out of the United Kingdom beckoned and in August 2008 he moved toNestlé headquarters in Vevey, Switzerland, where he was confronted with thecomplexity of now needing to help Corporate HR Director Jean Marc Duvoisinoptimize HR Structures across a major global corporation
Trang 153.5 The Nestlé global HR experience
From an organizational design perspective, Nestlé is a matrix organization It splitsthe globe into three zones with respective reporting hierarchies: Zone AOA –Africa Oceania and Asia; Zone Americas – North and South America; and ZoneEurope – Western, Central, and Eastern Europe Whilst the majority of its
businesses are organized within this structure, it also has a number of businesseswith global mandates and structures, such as Nestlé Water and Nestlé Nutrition.Moving to the Nestlé HR organization, at a macro level, it looks like a classicthree-box model However, in order to take account the complexity of the businessstructure, and the complexity added by operating within the global footprint of 84countries, the HR organization in operation has a series of three-box models
within a “macro” three-box model! The structure is explained below:
The three boxes at Nestlé
Shared services or centers of scale
Some of Nestlé shared services operate globally within a structure called Nestlé Business Services (NBS) Payroll would be a good example of this Other services operate at a Zone level or local (market) level, such as personnel administration.
Centers of Expertise
The Centers tend to be organized at a local or regional level, but they are coordinated globally.
Operational HR
HR business partners are organized locally, but they are coordinated throughout the
hierarchy, and so are coordinated either zonally or globally, dependant on the organization.
Figure 3.1: Nestlé’s macro HR organizational model
Centers of expertise
Local shared service