How to transform a global business without a central mandate for change [case study]
A change management masterclass from Stephen Pierce, chief HR officer at Hitachi EuropeStephen Pierce CCMI
Hitachi, which I joined in 2008, was my first Japanese company. The culture is different to that of western businesses but many of the challenges are the same.
In our case, the challenge was to introduce global best practices in people management that would be consistently applied, but in a culture where there’s no central mandate for change.
That cultural attitude to change was critical. Hitachi is a complex global organisation, with 330,000 staff in 900 autonomous companies. In Europe, we have around 18,000 staff across 100 companies in a broad range of sectors, from train building to financial services.
Each company has the authority to make decisions that may take it in a different direction from the rest. So, without a central mandate for change, how do you create change? We all know successful change is usually led from the top, but what do you do in an organisation where the top management will support change but the culture won’t allow them to mandate it?
Through working with my colleagues in Tokyo and other regions globally, it became clear that, to address this issue and introduce new global best practices, we needed to influence the key stakeholders – we had to get people to want to be involved.
Our engagement strategy was a partnership between colleagues in Tokyo communicating with parent companies, and those of us in the regions interacting with our businesses (in my case, across Europe).
Through our strategy, we wanted to create a culture of change, and this takes time. It takes time to build relationships, and even longer to sell change and ensure participation, rather than dictating.
So we tirelessly embarked on an engagement plan: meeting with leaders across companies, talking about their issues and explaining how the new people-management practices could make a positive difference to their businesses.
In doing this, we realised we shared many of the same issues: finding talent for the future, ensuring we develop and retain key people, and so on. But, without this proactive engagement, we could not listen, learn and find solutions.
Involvement also takes time. Showing the financial benefit was one way to encourage involvement. So our change journey did not just include changing people management practices but also reviewing HR service providers.
Historically, group companies had bought services separately, which meant they paid higher prices. So we worked together to create economies of scale, buying similar or better employee benefits at a lower price – everyone wins.
As more companies became involved in decision-making and buying into group-wide solutions, it became clear that not all of them could move at the same speed, and, for practical reasons, we could not implement change at the same speed everywhere.
This enabled us to pilot change in some cases, and allowed those with the strongest business need or commitment to participate and show the benefits to others. This was especially helpful for some systems-based solutions, where testing in a smaller group made sense prior to wider implementation.
Our change journey will never end but we’ve seen huge progress across our business in recent years. This includes a database with details of 250,000 staff, to underpin decision-making; a global performance-management system used by 100,000 staff; and a global careers site launched in 2013, via which we have hired 4,000 staff so far.
We are also saving about $5m a year on employee-benefit costs.
The key lessons for me include: the importance of engagement, considering every possible way to get buy-in, and answering the question ‘What’s in it for me?’ when talking with key stakeholders.
I have also been reminded that we can never communicate too much, and that tenacity and resilience are undervalued but critical attributes of successful change programmes.
Stephen Pierce CCMI is chief HR officer at Hitachi Europe.