The Client
Well-known UK construction brand with £2.5bn revenue and 10,000 direct employees plus supply chain resources. With offices and projects across the UK, it was organised into six different operating companies and several brands.
The Challenge
Newly formed division was beginning to see the effects of recession. Very low margin, high risk business, with multiple operating companies and duplication in overhead. Also an underinvestment in the infrastructure required to scale the business. Revenues were in decline and there was no strategic oversight of markets, customers and bidding performance. Federated approach to governance which meant there was little appetite to review synergies nor the experience to deliver them. The executive team had been with the business all their working lives and had grown with it. The culture was traditional - lacking in diversity, strategic thinking and change management expertise. There was also a notable absence of the voice of the customer in any conversations. Indeed the customer was often seen as an adversary.
The candidate was hired as the Chief People Officer and one of only two new executives on the Executive team. This afforded an opportunity with fresh eyes to highlight some of the challenges and opportunities the business faced. A major transformation of the business was required but initially it was only the candidate who saw the full extent of the change required.
The Solution
In order to address the absence of the customer’s voice, the candidate persuaded the CEO to meet and then appoint a marketing expert to meet with key customers and gather meaningful insights and and perspectives. The data gathered helped the CEO to recognise the need for change and with further coaching from the candidate to see how his role needed to change. This led the candidate to:-
- Work with the CFO to develop a business case for change and present it to the CEO. This included the redesign of the organisation - 3 new business streams aligned to customer markets and centralise the support functions.
- Work with the CEO to develop and deliver a workshop to gain the buy-in of the 6 leaders of the operating companies. This included the creation of a purpose and vision for the business..
- Develop and deliver a presentation to the plc board and gain approval for the transformation
- Persuade the CEO that additional expertise was required to deliver the targeted savings (£38m), and that this was best done by using interims. (This met with considerable resistance as interims were not perceived to be loyal employees. However the candidate successfully persevered with the argument.)
- Develop a transformation programme structure and identify the leadership and resources required to deliver it. The candidate recommended that an internal high flyer should be the business lead, supported by a career transformation expert.
- Lead the people change aspects of the transformation including the detailed organisation design into the three new customer streams and centralised support functions; the process by which leaders and other employees would be appointed to new roles and the selection of those for redundancy. Persuade the CEO and Exec team that investment in additional resources was required to deliver the people change aspects at pace.
- Work closely with the unions and communications team to build trust with employees and implement changes at an appropriate pace.
- Identify executive leadership gaps and persuade the CEO that the roles were necessary. Specifically Marketing Director and Chief Procurement Officer.
The Results
- Achieved targeted cost savings of £38.2m
- Delivered annualised saving of 7m in centralising HR and controlling the quality and quantity of recruitment.
- Delivered the transformation in a unionised environment without any employee relations disputes.
- Enhanced the leadership capability and reduced level of nepotism.
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