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MONDAY

July 18th 2011

YEAR 2 | No 21

Are employees #1 or are customers #1? By:Clarence Ti Vital.org

Time is money. But time is also “life,” -- and life is important. As a manager, are you squandering away your employees’ time? ... Change you mindset, and reap surprising benefits! Here is a case study from Singapore that explains how... page 3

SABMiller begins to reap benefits from Finance and Procurement transformation By: Rakesh Sangani ssonetwork.com

Meta-Leadership: Key to Outsourcing Change Management By: Deborah Kops

sourcingchange.com

State of Change column: What has a childhood friend got to do with leading change? Meet Dr. “Lenny” Marcus, CoDirector of a Harvard/John F. Kennedy School Leadership Initiative, for whom it is all about “meta-leadership.” page 2

South African alcoholic drinks giant SABMiller is beginning to reap the rewards of an ambitious procurement and finance transformation project... page 5

Successful Shared Services Leadership Characteristics By: Simon Brown ssonetwork.com Until recently, most companies dealt with sustainability by adding a couple of well-meaning paragraphs to the annual report... page 5


Meta-Leadership: Key to Outsourcing Change Management By: Deborah Kops sourcingchange.com This column explores the fundamental challenge of implementing shared services and outsourcing models successfully changing the way people and organizations work. Every month, Deborah Kops, of sourcingchange.com, dimensions an issue inherent in managing change, whether it be neutralizing the “loyal” opposition, helping managers deal more effectively with staff displacement, or ensuring that executive sponsorship doesn’t hide from the backlash. You probably haven’t heard of meta-leadership. And I confess I had not until I happened to google my childhood friend Lenny, now the esteemed Dr. Leonard Marcus, Co-Director of the National Preparedness Leadership Initiative (NPLI), a joint program of the Harvard School of Public Health

The generally accepted construct is that it’s up to the top team to provide whatever leadership is necessary. The sourcing team thinks it is then free to focus on implementation, believing that sufficient sponsorship is place to cover their flanks. And they move into the trenches of transition and operations. Unfortunately, we ask very little of those executives cast in the role of providing sourcing sponsorship. We expect them to: be the chief endorser; the enterprise-wide voice of the initial sourcing announcement; grace our town halls with their presence to show C-suite support; thump their fists in meetings when their leadership peers complain; and play good or bad cop in governance sessions, depending on the tone the client team wants to take with the provider. In sum, we roll them out when we think the problem or event demands the force of their presence. But we really don’t expect them to actively engage, spend much time questioning and probing, or lobbying recalcitrant business line leaders to help overcome the challenges that inevitably occur. Having “outsourced” the leadership role upstairs, we get on with the act of sourcing. Viewing sourcing as a program to implement, not a major change, we spend our days analyzing, negotiating, focusing on the progress of knowledge transfer, moving past toll gates, and ensuring that cutover goes well. But we do little to prepare our sponsors for a very important role. Outsourcing generally changes the organization’s world order, shaking up enablers (technology, delivery location, outsourced or captive), rules (policies, procedures, workflow), outcomes (better, faster, cheaper) and culture (spans of control, careers, relationships) for a large number of stakeholders across the organization. And suddenly, these stakeholders either have to work in new or different ways. What does this have to do with Lenny and meta-leadership? Lenny has been studying leadership for some time. And many of his concepts were tested when the Federal Emergency Management Agency asked him to evaluate the US Government’s response to Hurricane Katrina, where he redefined the role of leadership in any large-scale crisis.

(HSPH) and the John F. Kennedy School of Government. At first I was amused by the fact that the pudgy kid who played a mean clarinet and teased me unmercifully in the sixth grade eventually became a Harvard pundit, but then I read on and saw that his work sheds some light on the challenges of leading outsourcing change. One of the main tenets of outsourcing change management is that strong executive sponsorship must be in place as a precondition for success. So as we shape a sourcing strategy, we do it under the sponsorship of some leader near- or at the top-of-the-house, who is willing to put his or her imprimatur on the program - almost, dare I say it, as a Royal Warrant or a Good Housekeeping seal of approval. After all, if a CXO is seen as endorsing a change in business model, the working assumption is that other stakeholders will get on the bus.

Now while, technically, the implementation of outsourcing should by no means be considered a crisis of the same magnitude as Katrina, extrapolating Lenny’s research … sponsorship, as we define it in outsourcing, is not sufficient for success. According to his definition, leadership refers to the “recognized or expected span of authority that a person has in his or her formal role.” So when the CXO stands up and pronounces that the outsourcing of IT or finance or HR or software development is the right thing to do, he or she speaks as the hopefully incontrovertible voice of authority, based on the strength of his or her position on the org chart. But span of authority accorded to role is not sufficient. This is where meta-leadership becomes critical. According to Lenny’s definition, meta-leadership involves employing

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influence over authority. “Meta-leaders…seek to influence and activate change well above and beyond established lines of their decision-making and control. These leaders are driven by a purpose broader than that prescribed by their formal roles, and are therefore motivated and capable of acting in ways that transcend usual organizational confines.” By extrapolation, the expectations we place on sourcing sponsorship are not enough. Recognized authority alone will not drive the change that outsourcing represents. Rather, the meta-leader moves from mere outsourcing endorser, because of the stature of his role, to outsourcing’s number one change agent - because he has the power to influence. What are the duties of the sponsor cum sourcing metaleader? Sourcing meta-leaders don’t just preside over meetings and are quoted in PowerPoint presentations; they actively develop and articulate outsourcing change challenges. No longer relegated to the role of decrying a corporate “call to arms” [this is what we are doing - and here’s why] the meta-leader first rolls up his sleeves to form an accurate picture of the sourcing context, including the extent of the change, how the change will occur within the organization’s culture, its context, and who will win or lose in the process. Then he articulates it to those involved. Meta-leaders lead first, by example, within their own span of control. This is the equivalent of, “do as I say and as I do”. The meta-leader goes first, sourcing processes within his or her own span of control, proving that he/she has actual skin in the game. Meta-leaders are acutely attuned to the challenges faced by their superiors and peers. They are fully aware of the expectations and priorities of the rest of the C-suite and business line leaders, and are able to couch and adapt the sourcing strategy to deliver against these appropriately. They work up and across the corporate ladder, not just downward … placing the sourcing change in the context of other corporate priorities and initiatives, and ensuring that sourcing delivers against them, as appropriate. Meta-leaders actively drive engagement across the enterprise. Connectivity is a key aspect of meta-leadership. Meta-leaders demand engagement from their peers, in effect recruiting them as a network of change agents who step out of their own silos to embrace the overall objective—change the organization—and work together to accomplish it. So, the next time you lay out your change program, and the sponsor is slotted for cameo appearances, signatures on email updates, or presentations to their leadership peers… think again. Plan for much more engagement. Carve out a bigger role. Make your sponsor your number one change agent. Demand meta-leadership.

________________________________________ About the author Deborah Kops learned about the challenges of sourcing change management the hard way - by failing. As a result, she is able to deliver results in situations where change is required and the rules must be rewritten. With experience as a corporate managing director, consulting partner and provider, she has a unique perspective on the major challenge to outsourcing and shared services implementation. As a client, Deborah had end-to-end responsibility for global sourcing implementations at two financial institutions; and as an executive with one of the largest offshore business process outsourcing companies, and a founding partner of PricewaterhouseCoopers pioneering outsourcing line of business, Deborah has seen the implications of change management issues from the provider perspective first hand. DEBORAH KOPS, Managing Principal, www. sourcingchange.com deborah.kops@sourcingchange.com

Are employees #1 or are customers #1? By:Clarence Ti vital.or g SSON is pleased to share with our readers a series of articles contributed by Clarence Ti, Chief Executive Officer of the Singapore Public Service’s shared services organization [Vital.org won Honourable Mention in the 2007 SSON Excellence Awards for “Best New Shared Services”]. In this series Ti explores four key milestones along the shared services journey: aiming for Service Excellence; developing Operational Excellence; focusing on Productivity Growth; and Engaging Staff. The Formative Years – Engaging Our Staff Stories from a Government Shared Services Centre (Singapore) From the C-suite perspective: Family@Work; straddling generations; investing in social capital; and respecting employees’ time. Are employees #1 or are customers #1? A simple search on the Internet throws up different views from both camps. It’s probably a chicken and egg debate. Engaged employees can often lead to increased customer satisfaction and increased customer satisfaction can often lead to increased employee engagement. A virtuous or vicious cycle can develop. From the C-suite’s perspective, where do we start? But first – a little about us. Vital.org was formally launched in July 2006 as a captive shared services centre for the Singapore Public Service, serving initially just shy of 20 agencies in areas such as payroll administration, HR services,

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finance services (primarily dealing with vendor payments) and learning & development services. Today, Vital.org serves over 100 distinct government agencies in the original service lines as well as new areas, such as asset management and travel management. By 2010, over a million transactions have passed through our hands, organised along nearly 600 distinct lines of services. Vital.org has a staff of close to 500 people serving a population of some 80,000 public servants.

Family@Work The customer/employee debate starts, we believe, with management being clear about what kind of culture it wants to build. There are several strategy choices that one can pursue at this point. At Vital.org, we went withFamily@ Work. We developed an employee value proposition that centred on a list of belief statements. We reproduce them here for your reference. We believe that work is important but not the most important thing in life. We believe we can build a generation of finance, human resources & business specialists employable anywhere. We believe that we can have a family at work just as we have a family at home. We believe that we can train specialists who can operate complex systems, running millions of transactions. We believe we can build a culture where passion for excellence, professionalism with integrity, and caring teams are not just words on a wall. We believe that we can make a difference in the over 100 agencies that we serve. We believe that success is sweeter and failure less devastating when we are in it together. We believe that ordinary people coming together can do extraordinary things. This is what we believe. Inter-generational workforce Our youngest employee is 19 and our oldest is 73. This presents many opportunities and also challenges. In some of our management dialogue sessions in 2010, more than one young person came to say that an older colleague was like a 2nd mother at work. This was amazing to us. While we have invested in mentoring and coaching programs, it’s the informal adoption program that is the real glue for the organisation. Another story that came to our attention was a colleague who was touched by the concerns of another who went to the temple to pray for her, when she fell ill. Some

of our younger generation employees got together to form a pop band, which has performed on a number of occasions at internal events. Two of our colleagues married each other recently, and many of us attended the wedding. We don’t measure social capital directly. We know it exists. We believe that the adage “it takes a village to raise a child,” applies also to new employees who join our organisation. Respecting our employees’ time While we engage our employees on the theme of Family@ Work and emphasize the family part, this is after all, a workplace. From this perspective, one important social contact is that they will come to work five days a week for an average of 8-9 hours a day and we shall, as management, endeavour to make good use of their time. Just as a soldier under orders places his life under the care of his commander, we can squander away our employees’ time if we are not deliberate. Time is the one commodity that no one has too much of. The work family must then come together and constantly review how work can be organised better. We have a list of tasks that we constantly try to minimize, eliminate or automate away – tasks such as data entry, manual computation, manual verifications, manual routing, screenby-screen updating of cases, non-standardised work, etc. Any task that can create opportunity for human error is open to be targeted. We have to declare war against any task or activity that we cannot build a sustainable career around. This is the clearest demonstration of respect for our employees’ time that we can articulate today. The Journey has just begun These efforts in engaging staff in a common belief system, in spreading stories of Family@Work, or in clearly demonstrating a respect for the one limited commodity in their lives, are our starting point in engaging our staff, in the formative years. ________________________________________ About Mr. Clarence Ti Clarence Ti was appointed as the Chief Executive of Vital. org on 2 January 2010. In the public service, he has served in the Economic Development Board in both Singapore and the United States, where he was Director of the San Francisco Centre; the Singapore Land Authority, where he was Director of Land Business & Management; and the Ministry of Law, where he was Director of Strategic Planning. During his career, he has served in areas of investment promotion, business & operations management, planning & co-ordination, and legislative & policy reviews. He holds both a Bachelor of Science degree with High Honours and a Masters degree in Electrical Engineering from the University of Illinois at Urbana-Champaign and an MBA with distinction from INSEAD. He is also a Certified Financial Analyst.

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________________________________________ About Vital.org Vital.org, a department under Ministry of Finance, was formally launched in July 2006, as part of the Singapore Public Sector’s effort to aggregate common administrative services and reap economies of scale to bring about greater business value for the whole of Government. It currently serves more than 100 Ministries, Departments, Organs of State and Statutory Boards in Singapore. The suite of services includes finance services, human resource services, payroll and claims services, learning and development services and travel management services. Vital.org won the Honourable Mention Award under the Best New Shared Service Organisation (under 3 years in operation) Award during the Annual Asia Pacific Shared Services & Outsourcing Awards 2007. Visit www.vital.gov.sg for more information.

SABMiller begins to reap benefits from Finance and Procurement transformation By: Rakesh Sangani ssonetwork.com South African alcoholic drinks giant SABMiller is beginning to reap the rewards of an ambitious procurement and finance transformation project. The brewer, which is dual listed in London, has been busily streamlining procurement, finance and human resources, deploying global systems and common supply chain management systems under its “business capability programme”. Costs of $296m were incurred during the year, but with a return on that investment beginning to trickle through. “Progress continues across all aspects of the business capability programme,” the company said in its end of year report. “Net operating benefits in the year exceeded $60m, with working capital benefits to reach $450m, somewhat ahead of expectations, with the strongest contributions from our global procurement programme and the implementation of a regional manufacturing organisation in Europe.” Point of View: SABMiller identified that to make the significant transformational savings they needed significant investment. From a system perspective, they have chosen to implement SAP consistently across the global organisation, and utilise add on tools that enable further benefit.

The current CFO, Malcolm Wyman (who retires in August), realises that the savings will accrue over the longer term but that there are positive indicators that the benefits will meet those identified in the business case. Wyman leaves SABMiller after 25 years of service, having joined the South African Breweries in 1986. His replacement, Wilson, is an internal recruit with plenty of experience in leadership positions throughout the group – one of his key objectives will surely be to achieve the expected benefits from the transformation.

Successful Shared Services Leadership Characteristics By: Simon Brown ssonetwork.com In our recent global survey with SSON members to find out what good boss quality looks like for shared services leaders some powerful themes emerged. Many of you told us you found these themes really useful to confirm and crystallize perspectives on the important characteristics of effective and successful leadership. Some commented that they will use these characteristics to confirm competency-based selection methods for shared services leaders; others said that the survey themes on successful leadership can actually transfer beyond shared services to represent good leadership traits in general across the organisation. This week I will draw further on the learnings from the survey and my own experience working in this area to take a more in depth look at the actions and attributes needed to lead a successful shared services team. By distilling the reported and observed key ingredients for successful shared services leadership into four skills and activity clusters, or key principles to follow, we can describe these as follows: 1. Having and positively communicating a clear vision for future success. 2. Taking time to fully engage with your team and your clients and proactively managing the change agenda. 3. Being an effective team boss – delegating, empowering, coaching and supporting your team to play to their strengths versus playing the traditional role of micro management and control. 4. Creating a positive working environment of trust, transparency, and with genuine work/life balance. So let’s start today by focusing on what goes into # 1: Having and positively communicating a clear vision for future success, and we will pick up the other three key principles in the

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following weeks. Straight away it’s clear that this first successful leadership characteristic comes in two parts: 1. Having a clear vision of future success to begin with – “begin with the end in mind”, to quote Stephen Covey. 2. Positively communicating that clear vision – in a way which is compelling, involving, and is a call for aligned action by the whole team and the company. So for me the first part requires us to build up a knowledge base of current situational facts, drivers, reasons for taking action, for wanting to change or transform from the current way of working to the new way of working. By understanding the current, burning platform this gives impetus to help to establish a clear future vision, which answers the questions: what do we need to change to? Why? When? How? and with whom?

I remember way back, my first experience of shared services in the latter half of 1995. I joined a project team of HR Generalists and HR process Subject Matter Experts in a major global pharmaceuticals company to design a blue print for change. The aim was to make the HR function more effective and less costly as a support to the business needs at the time. Our project leader, an enthusiastic Corporate HR VP in his early 50s, with grey curly hair, rosy cheeks, and a sparkle in his eye, opened up the first meeting by telling us that the company needed to “save significant overhead costs, streamline, standardise ways of working, and eliminate duplication, to make it easier for everyone – primarily our managers and employees who interfaced with HR”. This he said was WHAT we needed to do. At the time we had five business divisions and five HR functions. WHY change? The goal was to get to one HR shared services and centre of expertise, which would support all five businesses, and save £2.5 million overhead costs in year one so these could then be reinvested into research and product development. The idea was to bolster our profitability as an organisation, as well as freeing up employees and leaders from time consuming, inconsistent personnel processes to focus on developing and marketing new products. Sounded fair enough. “So HOW are we going to do it?”, we asked. He produced a recent article from the Harvard Business Review by a

guy called Dave Ulrich entitled “Human Resources Value Proposition”, and urged us to read it as it made some good points about developing specialist expertise, playing to strengths, and developing centres of both transactional and transformational excellence. “Once you’ve read this, I expect us, as the project team, to find the right way to make it happen in the context of the business we are in right now, and the business we want to be part of in 3 to 10 years time,” he said. “The model from Ulrich is a catalyst and can be our starting point; but we should use the business drivers to help shape and apply our own blue print for success. And by the way, we need to design and implement this in the next 9 months to get the pay-back that the business needs!” So that was the WHEN. This seemingly alarming timeline, metaphored as a pregnancy or gestation period in our regular conversations, gave us clarity on when we needed to act, and the adrenalin surged as we worked our way through the “SARAH curve of change” (Shock-Anger-Resistance-Acceptance-Helping) to make the change happen; went through our grieving for the old ways; chose WHO was to be involved in making this change happen; and moved into a project team meeting routine to decide how we make this change happen to bring about the vision. The result was that we achieved delivery of our new Shared Services baby, in good health, on time (with blood sweat and tears, as expected, along the way). The cost savings and efficiencies of headcount synergies and consistent application of HR policy and process derived from vertically integrating 5 HR departments into one Corporate HR Shared Services then followed. By the time the baby was balanced on its feet, walking un-aided after 18 months, and the inevitable teething problems had been worked through, the HR Shared Services function at SmithKline Beecham was a great place to be! Over 15 years later, this story of change in one of the pioneer shared services models in the UK is firmly imprinted in my memory and is an experience I regularly draw upon to help define the what, why when, how and who for change to create the future vision state. It is a simple, yet tangible, tale of a business case clearly delivered within a structured and measurable approach – with some “what’s in it for us” factors for all the key stakeholders. For example, for the HR generalists moving into the new model there was the real opportunity to specialise and play to strengths – either as a Subject Matter Expert, or managing end-to-end transactional processes with a continuous improvement application, or being “freed up” to work on a more strategic level of operations alongside the business leaders. The aim was always to deliver on business goals, and facilitate enhanced performance of their people assets through working on applied talent management and values and performance alignment initiatives. So, what about the part which focuses on positively communicating the clear vision in a manner which is compelling? Hopefully, the above story of the first transformation at SmithKline Beecham (now GlaxoSmithKline) provides some insights; but let’s look at what else can be done. Here are a couple of pointers:

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battlefields of operations… then the future can be visualised as where the sun shines, where we can climb the mountains easily and collaboratively, overcoming obstacles, taking easy paths … Why on earth would you want to forsake that to stay stuck in the mud? Next week we will look further at stakeholder engagement and proactive management of the change agenda. Meanwhile, if you have additional thoughts or questions feel free to contact me through the feedback link.

1 Tell a Story. As well as the clear logic of what, why, when, how, and who, as described above, do tell a story to bring it to life. How does the journey begin, what are the steps we will take along the way, key milestones to help us manage our journey and track our progress, what will it look like, sound like, feel like when we get to our destination? People remember and relate to stories with illustrations and human aspects far better than they relate to a white paper for action based on pure logic. This can be traced back through the mists of time to an age when we gathered round the fire and looked into the flickering flames, which ignited our imaginations, as we listened to our elders telling us about the legends of the past and the predictions for the future in a way we could understand and easily relate to. These fireside tales were about survival, hope, triumph, and belief – and they engaged folk to bind as a clan, work as a society. 2 Draw Together a Picture. Involve clients, stakeholders, and team-members in the creation of your story of transformation, your journey and road map for change. A good way to do this is to gather a group together and invite them to draw pictures of what it looks like now in our company, what we want it to look like in the future, and what the road looks like in between these two symbolic visions. Pictures engage, represent meaning, are worth a thousand words, and can be related to on a basic human level. Shrewd companies, for example The Sears Corporation in the 1990s, or Premier Farnell in 2003-2006, have successfully used the Big Picture mapping approach to transformation with their teams to make the change story compelling and help us to get inside the car on the road and be part of it all. Using facilitation of the meeting and a professional artist to draw out the final roadmap or Tableau for display and discussion in all meeting rooms, this approach can be very effective as a way to win hearts and minds and build the vision for success together. If today is visualised as confusion, spaghetti ways of working, siloed clans in their turreted castles, and fights on the muddy

________________________________________ About the Author Simon Brown has over 25 years experience in HR Management working in the change management, talent acquisition and talent management space, with a range of FMCG, B2B and Pharmaceuticals sector organisations including Duracell Batteries, GlaxoSmithKline, Premier Farnell and has successfully completed a 3 year change management assignment at Coca-Cola. Simon has recently left Coca-Cola to launch his own consulting business, specialising in shared services design and selection, virtual working, coaching and mentoring. He has been involved in the design and deployment of Shared Services four times since 1995, including vendor selection for outsourced partners. Simon has a strong expertise in selection and development of HR Shared Services teams and has worked with both onshore captives, off-shore, outsourced, and virtual working teams where a blended solution of retained and outsourced has been chosen. Based on his own learning Simon advises companies to choose carefully the right HRO mix for them relevant to their business profile and current situation along the HR transformation journey.

Editores

Conselho Editorial

Rodrigo Lang Thaissa Lemos Vanessa Saavedra

Caio Fiuza Eduardo Saggioro Vitor Marques

Diagramação Jessica Müller

Contato: pesquisas@institutodegestao.com.br

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Cscnews julho 2011