Beholden to HR

Championing organisational change is a brave feat for any HR director, especially when faced with change-resistant leaders and a culture to match. Craig Donaldson finds out how Andrea Grant took Holden’s HR from an administrative ‘personnel police’ role to that of a valued and strategic HR business partner

Holden is the Australian subsidiary of General Motors, one of the world’s largest automotive companies. Employing 9,500 people, Holden has an annual sales revenue of approximately $6 billion.

Andrea Grant joined Holden in November 2000 as executive director of human resources. She was the first woman to join the Holden board, and since then, she has made a significant impact on the business. Upon joining Holden, Grant’s primary objectives were focused on two key areas: to create a HR department that truly added value to the business and secondly, to create organisational capability and a culture able to meet future business challenges.

Building a HR team to support strategy

Upon joining Holden, Grant inherited a traditional personnel policy and procedure department that primarily focused on administration and industrial relations. Attempts had been made to develop leadership programs, however HR’s credibility within the business was so low that these initiatives were unable to gain traction.

Grant’s first initiative was to create a compelling vision for the department. After spending the first few weeks understanding the business by talking to HR employees and spending time with customers in the business, she developed the first Holden HR strategy using the broader organisation’s strategic plan to identify the key objectives for the department.

Grant believes that organisational structure facilitates the achievement of strategy, and the next step was to create a completely new HR structure that would support the business and its strategy. The HR structure she created is a matrix of customer support roles and centres of expertise. The customer support roles include HR business partner teams that provide on-the-ground support for internal customer business units, and the centres of expertise ensure HR has the capability to deliver both value add and transactional services to customer groups.

Centres of expertise include organisational capability (encompassing leadership development, employee development and organisational development), employee relations (work/life, diversity, employee relations and industrial relations) and HR shared services (recruitment, compensation and benefits, workforce planning, HR processes and systems as well as a HR transaction service centre).

The new structure created many opportunities for HR talent, both existing and new, and Grant and her team undertook the task of populating the structure, matching people with roles to ensure a highly competent HR team. This was an unsettling and difficult period for many HR employees. However, the change was implemented quickly and the HR team remains highly motivated with their new identity and their seat at the business table as credible business partners, Grant says.

“We’ve come from being a department that didn‘t have any credibility – pretty much seen as the personnel police, and people didn’t feel good about working in HR. We’re now in a position where we’ve got many runs on the board, and when some of my colleagues and other executive directors get up to talk about Holden’s achievements, they also talk about some of HR’s achievements as well,” explains Grant.

An HR balanced scorecard was recently developed after a review of the HR strategy. This process involved developing an integrated set of strategies and scorecards. It gained input from almost every HR employee along with a cross-functional team of 60 senior Holden managers that firmly believes in the role of HR as an important contributor to the business, says Grant.

Creating a culture of capability

Upon joining Holden, Grant described the company as a highly successful and fascinating company with innovative, high-tech products. However the culture was “very traditional – a bureaucratic, command and control, management by fear culture, where things got done because of employees’ passion for Holden and their roll-up-the-sleeves attitude”, recalls Grant.

“It’s funny: in Australian society you’re either a Ford or Holden fan,” says Grant. However an employee census told her a couple of years ago that while staff were passionate about working for Holden, sometimes their experience, often at the hands of their manager inside the business, nearly drove a few behind the wheel of a Ford.

The Holden board had significant growth plans in place, and it was clear to Grant that the capability and culture of the company would have to change if business goals were to be met. “The culture we’re moving to is much more empowered, where people take risks, there are high levels of communication and employee involvement. We don’t want to lose all the good things about our culture – it’s important to honour the past and not try and come in and make changes without keeping the good things,” she says.

Working with chairman and managing director Peter Hanenberger, she started at the top to create a diverse and talented board of directors. “You have to start at the top. If you don’t have a chief executive who believes in change, you’re wasting your time,” she says.

Holden’s board had traditionally been populated by older men. Hanenberger and Grant have appointed three additional women to the board and changed the age demographic considerably to ensure maximum diversity and innovation. The change in senior executive ranks has changed Holden’s culture and organisational climate considerably, she believes.

“Sometimes you have to make the tough calls. If you leave a leader in the business who doesn’t exhibit the kind of competencies that you are looking for, it not only impacts the achievements of business results, it’s also not the right thing to do by employees who work for that leader because you’re really not getting the best from those people,” she explains.

“The leaders create your culture and organisational climate, both individually and collectively. So we’ve spent an enormous amount of energy and time on that. We started at the top and worked with the board, then came down to the next level, and are working on it now with all levels of the business.”

Hanenberger and Grant engaged the revamped Holden board on an 18-month program focused on developing a top executive team. This included defining the role and purpose of the board and accountabilities of the directors as well as individual and team development. Board work processes and behaviour were also discussed, defined and agreed. As a result, Grant says the Holden board is more effective and focused with improved team and business leadership capability.

One of the most important outcomes of this work was the creation of the Holden aspirational values: ‘dreams come true’, ‘game changing’, ‘boundary less’, ‘engage’ and ‘trust’. Grant says these values describe the culture needed to achieve Holden’s vision and business strategy, and are being woven into all HR processes and the modus operandi of Holden’s top 150 managers.

The leadership theme continued with the development of leadership competencies, which form the basis of all leadership development, progression and succession and recruitment decisions regarding present and future leaders. Leadership competencies are divided into three areas: business, self and others. Business competencies centre around inspiration and achievement, while individual or ‘self’ competencies are based on being a good role model and the ability to ‘make things happen’. Competencies related to others centre on the ability to empower and connect to others and build networks and relationships across the business.

“It’s really easy to pull a leadership model off the shelf, but whether or not those leadership competencies will really drive what you specifically need in your business is questionable. For us, we developed our own leadership competencies, which are linked in, for example, to our aspirational values. So we end up with leaders who also have values that are aligned with our culture,” Grant explains.

The challenges of championing change

Coming from a position where HR was formerly relegated to the role of administrative and personnel police, Grant faced no small number of challenges in her effort to transform HR within Holden.

“It was huge – absolutely huge. Initially I felt like an alien,” she says. “I would be standing in front of senior managers and they would be just looking blankly at me. What was interesting was that within an audience you would see pockets of managers nodding their heads and making eye contact and saying, ‘Yes, we understand what you’re saying and we think that we need this at Holden.’ And you’d see others with arms crossed, eyes glazed over and so on.”

She believes that, initially, many thought the initiatives were just the latest fad and that they could sit back and weather the storm. However, in a change-resistant environment, HR professionals need to be persistent, she says. “You have to be courageous if you’re going to be an agent for change. You’ve just got to be tenacious and stick with it and really believe in what you’re doing, otherwise the road is going to be even tougher. There’s an old Chinese proverb about falling down seven times, but standing up eight times – that’s how I often feel.”

Lessons learned

Grant says that organisational change is a journey, and as such, cataclysmic change won’t work in the long-term. “You can’t just throw everything out and start with the new. It really has to be a series of changes that are all in line with an overall strategy, but it’s much better to undertake lots of smaller changes rather than just one wholesale change. People get very wary and emotionally worn down with wholesale change,” she says.

In hindsight, Grant says that more consultation prior to any changes would have benefitted. “I think that we probably would’ve talked to people more upfront about the fact that change was going to happen and that this is how you might be affected. When you take people through change, they do feel uncomfortable and it’s not a good place to be in for them. But if they understand that it’s coming and that it’s normal to be feeling this way, then it’s much easier,” she says.

Any organisational change process takes time, and Grant estimates the change will take about five years in Holden. “It is a journey and you’ve got to expect it to take time. For a while it just felt like we were spinning our wheels – we were working, working and working and not seeing any results. We’ve only started seeing the fruit of our labour recently, so it’s wonderful to see the results are all coming home to roost.”