Case Study

ALIGNING HR WITH THE BUSINESS AT SBC

Mike Mitchell left the Bank of Montreal to become vice president of human resources at the North American branch of the Swiss Bank Corporation (SBC). It was a move up for him in terms of status, responsibility, monetary compensation, and challenge. Of these, the challenge was the most intriguing element for Mitchell. In his mid-30s, he saw this as perfect time to take a risk in his career. He realized that if he succeeded, he would establish a prototype that could be marketed to other firms. In addition, success could lead to further career opportunities and challenges. While he had a general idea of what he wanted to do and had gotten verbal support from his superiors, the senior vice president of human resources and the president of the SBC, North America, the details of exactly what he was going to do and how he was going to do it were yet to unfold.

In the preceding year, the parent company of SBC, (a $110 billion universal bank headquartered in Basil, Switzerland) decided it needed a clearer statement of its intentions to focus its energies and resources in light of the growing international competition. Accordingly, it crafted a vision statement to the effect that the bank was going to better service its customers with high quality products that met their needs rather than just those of the institution. While the North American operation was relatively autonomous, it was still expected to embrace this vision. The details of its implementation, however, were in local hands. For the human resource side, the local hands were Mitchells.

While Mitchell had spent some time in human resources at the Bank of Montreal in NY, the bulk of his work experience was as an entrepreneur in Montreal, Canada. It was this experience that affected his thinking the most. Thus, when he came to the SBC, his self-image was a businessperson who happened to be working in human resources. It was in part because of this image that his stay at the Bank of Montreal was brief: The idea of human resources was a bit too conservative for his style. Too many of his ideas just couldnt be done. In interviewing with the top managers at SBC, they warned him of the same general environment. So he knew change would be slow among the 1,000 employees, including his own department of 10 employees. He knew, however, that he wanted to reposition and customerize the HR department at the SBC. He also understood the importance of connecting the HR department to the business.

Mitchell identified 4 major aspects for his program to reposition and customerize the HR department. The 4 aspects included (1) gathering information, (2) developing action agendas, (3) implementing those agendas, and (4) evaluating and revising the agendas.

Gathering Information

To gather information about the current environment, Mitchell asked questions of customers, diagnosed the environment, and consulted with the HR department itself. From the customers, Mitchell learned the nature of the business strategy and how HR currently fit with or helped that strategy. Customers discussed what they were getting from the HR department, what their ideal would be, and how the ideal could best be delivered. Each HR activity, as well as the entire department and the staff, was discussed. For the environment, Mitchell learned what other companies were doing with their HR departments and HR practices. He examined competitors and those in other industries to gather ideas for the entire department and for each HR activity. From the HR department, he learned about how they saw themselves in relation to servicing wither customers, their knowledge of strategy, how they thought the customers perceived the department, and their desire to improve and change.

Developing Agendas

Making agendas based on this information was the 2nd aspect of Mitchells plan. As the HR staff analyzed the information, they were asked to develop plans for resolving any discrepancies between what they were currently doing and what their customers wanted. As the staff worked, they began to recognize a need to determine a vision for themselves- to for- mulate a statement of who they were and how they interacted with the rest of the organization. They also began to examine whether their current ways of operating and the departments current structure were sufficiently suited to move ahead. The need to recognize became apparent. Once the vision began to take shape and the agendas were developed, the HR department established a game plan to implement their agendas. Approval by top management and the line managers who were immediately affected was seen as critical to successful implementation.

Implementing the Agendas

To begin the implementation phase, the HR staff met with the customers to discuss the agendas. In addition to responding to the specific needs of the line managers, the HR department also had to sell the line managers on other activates. With a new focus that was more strategic and customer oriented than in the past, the HR department began to develop programs that were beyond the regular administrative activates and services that it had provided to the line managers. Because these services were new, they had to be

sold to their customers, at least at first. So in addition to implementing the specifically agreed upon agendas and contracts, this aspect included developing, selling, and implementing new programs.

Evaluating and Revising

Developed along with the agendas were contracts that specified what would be delivered to the customer. The customer was given the right to appraise the work delivered. Based on these appraisals by the customers (the line managers), the agendas were evaluated. Revisions and adjustments were then made for continual improvement. In addition to such contracts, the work of the HR department was reviewed internally using such criteria as the reduction in turnover resulting from better selection procedures and an increase in the number of new ideas or innovations resulting from a change in the HR practices to facilitate the innovative strategy of the business.

Implications for the HR Department

There were several implications for the HR department (Mitchell and his staff) in their efforts to reposition and customerize:

The HR department was reoriented to be strategic and customer-oriented.

The HR department became a constant gatherer of information from the internal and external environments. By knowing the competition, the business strategy, and the current assets of the company, the HR staff could develop new HR activates, implement new ideas, and work to maintain the company competitive advantage.

The HR department identified the level of excellence it wanted to attain. The staff worked to make the department a strategic player while fulfilling their managerial and operational roles.

HR managers and staff worked closely with the line managers to design systems to gather the needed services and information. They also worked with the line managers to develop contracts by which the HR department would be evaluated by the line managers.

The HR department was changing so that there was more of a generalist than a specialist orientation. A greater team orientation was also built.

Things would never be the same. The HR professionals in the department would now be gathering, servicing, evaluating, revising, and most of all listening. And because the business is always changing, the HR department will continue to evolve and change.

Implications for the Line Managers

There were also several implications in repositioning and customerization program for the line managers:

The line managers needed to cooperate with Mitchell and his staff as they gathered information and implemented new ideas and practices. Together, they became partners in the business. The line managers had to accept the new role being played by Mitchell and his HR staff.

The line managers needed to work closely with the HR staff in developing the action agendas.

The line managers had to continue working with the HR staff in appraising the success of the HR efforts.

Benefits from the Partnership

From Mitchells perspective, several outcomes resulted from the repositioning and customerization program, including:

Enhancing the quality and responsiveness of the HR department.

Developing the HR department in terms of new jobs (skill wise), providing new excitement, and building commitment to the companys mission, goals, and strategies.

Linking HR with the business and integrating HR with the corporate strategy.

Becoming market or customer oriented, with the flexibility to respond and to

anticipate changes.

Developing criteria by which the behaviors of the HR department can be evaluated and changed.

Gaining an ability to develop and use HR practices to gain competitive advantage.

Developing an awareness of the potential ways different HR practices can be done by constantly monitoring what other successful companies are doing.

Becoming more keenly aware of the internal and external environments.

Providing standard HR products more efficiently.

Developing new products and services.

Selling new services and products outside the company.

Changing the HR department dramatically and consequently becoming a catalyst for change with the company.

Becoming a department where everyone wants to work.

CASE QUESTIONS (30 MARKS)

1.) Who were the customers of Mitchell and his HR staff? (3 Marks

2.) What did Mitchell have to do so that his staff could do the things necessary to reposition and customerize (3 Marks)

3.) Do you think the line managers would cooperate with Mitchell and his staff? (3 Marks)

3a) What would it take to get their cooperation? (3 Marks)

3b). Why might they resist a partnership with the HR department?