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Case study

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HBOS group technology - improving performance through change

• Restructuring and development of new leadership teams
  
• Re-engagement and alignment of staff at all levels
• Step-shift in divisional performance
• Innovative delivery by collaborative partnership
  

About HBOS Group Technology:

HBOS Group Technology (GT) provides the operations and infrastructure
for technology across the whole of HBOS.

The GT team is made up of over 1,700 staff, based in 10 locations across
the UK, covering 24x7 operations, call centres, security, as well as
development areas; supporting 70,000 staff across UK and
international markets.

Background:

When Martin Ewart was appointed as the new head of HBOS GT in February 2005 the division was facing great upheaval, including changes to senior management and functional roles.

In response to the challenge of transforming the division's performance including improving customer relationships, internal staff morale and project delivery, Martin invited external consultancies Human Insight and JBBI to form a collaborative partnership to develop and facilitate an organisational change process that would fundamentally improve the performance of the division.

"I only wanted one joined-up approach.  It was important that both Human Insight and JBBI get together and come with one view.  The essence was to use the power of all our colleagues to drive this business forward", says Martin.

The key objectives of the change process were to:

• Build high-performing senior management teams
• Rapidly increase management capability and decision-making ability
• Create operational alignment around agreed GT goals
• Build a customer-orientated and effective culture and organisational structure
• Create a truly engaged and energised GT that owns and supports the improvement and change initiatives

Central to the success of the JBBI and Human Insight partnership was their shared beliefs and values about organisational change and leadership.  Based on the philosophies of business ecology - that all organisations are living and constantly evolving entities, a powerful alliance was born that generated a close and complimentary working relationship.  One that would prove essential to generating the trust and engagement so vital to the success of the process.

Annika Ratcliffe from Human Insight and Jan Bowen-Nielson from JBBI agree:
"Through forming one coherent and aligned systemic intervention around people and strategy, we managed to leverage our two organisations' offerings for the benefit of the client.  We avoided mixed messages and sub-optimal use of HBOS GT's time and capacity, and created a much higher momentum for change."

Our approach:
Working in conjunction with the HR department and other key HBOS personnel a comprehensive transition programme was developed based on understanding the prevailing situation, where the division needed to be, and what the leadership challenges and development issues were. (see Fig 1)

The transition consisted of two distinct stages:

1)   The fundamental restructure of the division

2)   The organisational and cultural development of the new structure

DELIVERING PERFORMANCE

Fig 1

Organisational restructure:

The first task was to undertake an evaluation of the division using the Organisational Capability Survey© format.  This survey provided a thorough review of the organisation's capabilities and gave a clear picture of where the organisation needed to focus to improve.

A large number of interviews with senior and middle management together with focus groups across eight UK sites were conducted.  The survey identified five key areas for the organisation to focus on while designing and implementing a new structure and supporting culture.

These were:

• Clarity of Responsibility
• Organisational Clarity
• Customer Orientation
• Competitor Orientation
• Learning Climate

In order to engage and generate ownership of the organisational redesign from a large part of the division, a process was facilitated involving not only the existing leadership team members, but also their direct reports, from the first stages of the design phase right through to implementation.

Jan Bowen-Nielsen elaborates: "This in effect meant that direct reports were helping redesign their bosses' team and their individual responsibilities.  This was a totally new concept for the organisation and created a high level of energy and buy-in as well as a deep understanding of why and how the changes were going to happen.  We created a large group of senior managers keen to make the new structure work."

The result was a fundamental restructure of HBOS GT:  The creation of two leadership teams with clear responsibilities: The GT Leadership Team (GTLT) and an Extended Leadership Team (ELT) at the next level; and a move from three departments to seven, facilitating greater focus on customer relationships.

The new management structure was successfully in place within 2 months from kick-off, and within another month each of the new department heads announced their management teams and organisational structure.

The restructuring programme highlighted to senior management the need to address the prevailing culture.  The importance of improving leadership capabilities and consistency were recognised as key to improving employee engagement and divisional performance.

It was essential to develop greater strategic alignment of the new leadership teams (GTLT and ELT) and the division as a whole.

A three-stage approach was designed covering a 12 month period to:

1. Build and develop the GT Leadership Team
2. Build and develop the Extended Leadership Team
3. Implement a coaching framework to support delivery of key targets and to build a coaching culture within HBOS GT

Through a series of interviews, workshops, and supported by the use of proprietary tools such as the AEM-cube® and Mission Driven Priorities (MDP®) framework, the new GT Leadership Team was able to create a vision, develop its mission and goals and define each team members' key objectives to reach the overall objectives of the division.

Importantly, the GT Leadership Team was able to define clear strategic objectives, or CST's - Critical Success Targets - for the following 12 months.  These were crucial in aligning and engaging teams throughout HBOS GT.

As Martin Ewart describes it: "Our CST's gave us simple clarity of what was really important to achieve.  This became the basis of our performance reviews.  They became the reason for being."

A similar process, including cascading workshops run by relevant members of the GTLT was adopted for the engagement and development of members of the Extended Leadership Team.

"Many clients buy the process we use" says Fiona Henderson of Human Insight "But its richness is in giving teams the opportunity to really engage with each other and gain a new level of understanding and trust."

The new leadership teams' alignment and responsibilities were further enhanced with the implementation of a new management framework which lifted the GTLT into a more strategic role, with the ELT taking a strong operational responsibility including forming a number of cross-functional steering and action groups with large operational decision scope.

Leadership roles:

The GTLT role: Chairing the GT direction-setting process, accountability for GT delivery, bringing in the external context, HBOS stakeholder management, support and coaching of GT skills and leadership development, consistent engagement and visibility across GT.

The ELT role: Participating in the direction-setting process, operational delivery in line with GT's vision and mission, participation, support and coaching of GT skills and leadership development, consistent engagement and visibility across GT.

Coaching:
From the outset it was anticipated that coaching would provide the ideal vehicle to support the transition process, develop individual leadership competencies and achieve delivery of the CST's across both of the new leadership teams.  This was borne out as the intervention developed.

With the support of Delta Partnership, an organisation specialising in executive coaching, all members of the two leadership teams (over 50 people) were offered 6, 1:1 coaching sessions and up to 3 observation and feedback sessions over a 6 month period.  The process was managed via a unique network approach which pooled themes and learning from the individual sessions.

Not only did this provide invaluable individual and organisational learning, it embedded a coaching capability within HBOS GT and contributed to the cultural development of the division.

Engaging GT:

Complimenting the leadership teams' development, extensive engagement activities for all staff levels were created.  This included refining operating models within each function and creating bottom-up change initiatives; such as rolling out a programme for aligning personal objectives for each staff member across the division directly with the overall objectives defined for the whole division.

Jesper Berggreen of JBBI explains: "HBOS GT is a very complex organisation spread geographically, with very different technical disciplines, different customer needs and even with different mindsets as it has formed from a number of previous mergers.  To engage the wider HBOS GT organisation we needed to involve them in solving problems relevant to their daily lives, while ensuring that they all pulled in the same direction as defined by the new Critical Success Targets.  The broad engagement of HBOS GT staff greatly improved the quality of the solutions and speed of implementation of some very complex changes. The improvement in morale as evidenced by an annual colleague opinion survey taking place right in the middle of the reorganisation is a testament to the success of this approach."

Outcomes

As a result of this comprehensive change process HBOS GT is now much better positioned to handle future challenges at all levels.  A more dynamic leadership culture exists with aligned and engaged teams that have delivered a step shift in performance.

Martin Ewart concludes: "If I had known what we were taking on, I might not have gone ahead.  I am extremely pleased that we did, however.
I thought I was buying team clarity of vision and mission, with projects and activities to develop my leaders and deliver improved performance.  What I actually bought was of much higher value.  We have achieved a mindset shift that has enabled us to handle multidimensional change while managing the tension of Business as Usual demands, which are great.  The level of individual and collective learning we experienced far exceeded my expectations.  Through mobilising a broader leadership community we are really starting to see the benefits in the performance of the operation."

Some of the highlights include:

• Dramatic increase in service levels including some of the strongest performing months since HBOS was formed and nineteen straight weeks of 'green' status across all business areas
  
• Improved customer feedback and customer satisfaction rating improving from 65% scoring good or above in 2005 to 84% in Q1 2006
  
• Significant increase in morale as measured by annual group wide colleague opinion survey while still going through restructuring
  
• A significant shift in management approach at senior and middle management levels
  
• A radical lift of second layer of senior management to take wider responsibilities for division's operations
• Two leaders within top management team recognised as high performers and promoted to more senior roles within HBOS

About JBBI:

JBBI's core expertise is to support senior management through major strategic change initiatives, be it organisational restructures, performance development or major acquisitions.  We inspire leaders to achieve step change through people in their organisation as we help them mobilise the whole workforce to take ownership of the change solutions and the implementation.

www.jbbi.com

About Delta:

Delta Partnership is committed to the integrated development of individuals and teams in pursuit of organisational success.  Our belief is that these are intimately related and must be treated jointly to ensure a positive outcome.  Our core service areas are: Coaching, Organisational Development and Alliance & Business Relationships.

www.delta-partnership.com