Bupa and Sydney Water share tips on change management

by 24 Nov 2009

From restructuring to mergers and acquisitions, organisational change can be extremely tumultuous for companies and without a carefully mapped plan will lead to failure. Sarah O’Carroll goes behind the scenes of some companies that went through recent change to see how HR contributed to the success.

Change within business is inevitable and in the current uncertain economic climate is around every corner. Whether it is due to external economic forces or internal commercial motivations, every business goes through multiple changes throughout its lifecycle.

But how change is managed and planned, particularly from a people per spective, will spell the difference between those change strategies that fail and those that are successful.

Numerous case studies have shown that a poorly planned merger (or any type of big organisational change) is synonymous with failure. And, because of rapidly chang ing economic conditions, many companies have had to embark on huge organisational shifts under a lot of pressure.

So it seems that having a “change pro tocol” on hand for such situations would be a safe idea for any company. A procedure that is clearly mapped and can be pulled off the shelf every time the company goes through a merger, restructure, downsize or re-engineering is a vital survival tool.

It is also the case that one of the great est obstacles in any major restructure is the people factor – resistance, redundancies, retraining etc. Organisational restructures, therefore, demand great things from human resources departments

Lead from the very beginning

According to Penny Lovett, HR director of Bupa Australia, (which won the award for best HR strategy this year at the HR Awards) clearly electing the leaders of change from a very early stage of the process is imperative to success. These peo ple are the “change champions” and know exactly where the business is going and can help to guide and navigate the business through uncertainty.

“We needed to provide quick certainty about people’s roles and the direction of our new business so that people could get on with looking after our customers,” says Lovett.

Bupa Australia, the third-largest health care company in Australia, merged with MBF, the second-largest healthcare company, in January 2008. The merger affected a workforce of 2300 and leading the company through this change was a big challenge, says Lovett.

In preparation for the merge, Lovett looked to other companies which had been through such change to dis cover any common policies or pitfalls. One make or break area was leadership.

“I cannot over- emphasise the impor tance of having those key people in place from an early stage,” says Lovett.

Sydney Water is another company which went through significant organi sational restructure in the last 18 months. The longer-term goal for Sydney Water was, how ever, a lasting behavioural change.

Up until they decided to make changes, the company had three dif ferent departments working together – one which would make the decisions which were then carried out by the other two. At the time there were many unclear areas of responsibility and the company found that it wasn't using the skills of all their people.

“We really had one group telling the other two groups what to do and the relationships weren’t very healthy,” says Eric De Rooy, general manager of the maintenance division within Sydney Water. “So we decided we’d change models to make it clearer in terms of who does what. Instead of three units we had two divisions who would work together to make sure we got the results for the com pany.” In March 2008, the restructure commenced.

According to Peta Keaney, HR operations manager, the HR team had developed a change management framework which was in its infancy when the decision to change the company’s operating model was taken and it was essentially roadtested with this new restructure.

In the change management framework of Sydney Water, the most significant development was a partnering program which was very heavily resourced. It consisted of a partnering work shop between the two executive teams of the two new divi sions. They developed a partnering charter which they all signed, committing to a certain way of working together.

Throughout this process, organisational behaviours were closely linked to the programs and this was consis tent through all levels of the organisation.

The change in Sydney Water did not lead to a major downsizing. However, there were some people whose posi tions were affected and the company used flexible policies in dealing with positions that were made redundant.

“To make sure we retained talent for the organisation, we applied selective voluntary redundancy guidelines to make sure we retained the best people,” Keaney explains.

She says she could not over-emphasise the importance of clearly defined goals and also the need for a defined plan from the early stages.

“One of the key learnings for us was that it is really important to establish a clear case for change very, very early in the process,” says Keaney. “Some way into the project we realised we had to make the massage clear as to why we were changing and what the benefits were for the organsiation and individuals.

“We developed a really innovative roadmap of where we were going and why we were going there and we coached all our managers so they could communicate that story to the people. If we had done that earlier in the piece we would have been even more successful.”

According to De Rooy, although there weren’t many redundancies and few job changes, what the team tried to do was to change the way employees worked, their per formance and their behaviours. He says resistance was one of the key challenges.

“One of the biggest challenges was to keep people engaged, and find a better way to work and to work together, rather than how they used to work,” he said. “A lot of it is cultural change that we are still working on.”


Any change, whether big or small, is often accompanied by discomfort, uncertainty and resistance. In the experience of both Bupa and Sydney Water communication played a huge role in the successful implementation of change and, according to Lovett, HR really cannot communicate and inform employees of what is happening too much.

“Just when you feel you’ve communicated enough – communicate some more,” she says.

The success of both Bupa’s merger and Sydney Water’s restructure was measured through bottom-line results as well as higher levels of staff engagement.

Sydney Water had three objectives, eight benefits and 22 KPIs which were involved in the change process and these were measured every quarter. The results in terms of engage ment levels demonstrated positive results of the program.

“There are early indicators from the last staff survey that engagement in both divisions has gone up and that is something we will measure again in June of next year,” explains Keaney.

Middle-level managers were also surveyed after an inno vative workshop and the results found that the majority of respondents not only felt willing but also able to lead the change.

“93 per cent said they were willing and able and even 88 per cent said they were getting excited about it,” says Keaney.

Make it seamless for the customer

According to Lovett, the most significant reason for Bupa's success was that the team was very clear strategically about where it wanted to go. It also made a promise to customers that the changes would make it easier for them to more eas ily navigate what Lovett describes as a Austarlia's “rather confusing health system”.

The key to delivering on this promise was to create sta bility in the business very quickly while keeping the vision and end goal in mind.

“We didn’t want to just merge two old businesses,” she says. “We had a clear vision and goal and wanted to cre ate a new vibrant business.”