Invest in People

Invest in People

Imagine the generation that will make or break companies in the opening decades of the new millennium. How will they be different from the workforce of the 20th century? Leave the rhetoric about Gen X aside; forget about catching the zeitgeist. Instead focus on the philosophy, structure and feel of the third millennium workplace, which will spring from the minds of business leaders who dare to change the way they think about their employees. Perhaps they'll banish the term human resources, an Industrial Age invention that seems to imply individuals, like coal, conveyor belts or chairs, are commodities to be maintained. And they will take a careful look at all the technology-influenced changes in workplace attitudes and values, then rethink their policies to attract, motivate and keep the best people. Here is a look at a few farsighted CIO-100 honorees that are making such changes already.

Bharat Petroleum

Tapping into Human Energy

India's leading oil company has a big problem, and U. Sundararajan, its chairman and managing director, knows it. He was appointed to preside over Bharat Petroleum, the once complacent, government-controlled oil company, India's second-largest, as it prepares to face a blast of serious competition in a market that will be completely deregulated by 2002. As he pondered the problem, he had a realisation: The whole organisation needed to become more energetic and customer focused.

In 1998, the company, based in Mumbai (formerly called Bombay), embarked on a still-ongoing overhaul of its culture and operations with the aim of encouraging employees to contribute ideas and make changes that reach beyond their own jobs. The overhaul is enabling Bharat to address the two main challenges of deregulation at once, namely loss of market share and competition for labor. So far Sundararajan reports that individual and team initiatives are much improved, which in turn has bolstered company performance. Thanks to the project, which has cost close to $6 million to date, Sundararajan says the company's responsiveness to the market has improved and revenues have rebounded. The emphasis on taking initiative has also created a feeling of empowerment that should make it easier to retain staff as new competitors draw on the same labor pool.

With a concurrent company reorganisation, business unit teams have become independent from the traditional, centralized business functions such as marketing, finance and human resources, although measures have been put into place to ensure that teams keep the company's overall priorities in mind, and as a result they have taken on more responsibility. The company has also opened many channels among business units by creating teams that manage enterprisewide business support processes. The business unit teams set their own goals for, say, the next quarter, and each team member commits to how he or she will help reach a goal, for example, of reducing cycle time. "They take ownership; that's a way of working that wasn't there in the old organisation [of the company]," Sundararajan says. "Even in the government, they can't believe that we can function with that little supervision." Revamping Bharat's culture and organisation has been challenging. During the summer of 1998, approximately 2,500 staffers took new jobs corresponding to the new organisational structure, more than 700 moving to new locations. Many had been skeptical about the plans, which included hiring Arthur D. Little consultants to train some Bharat managers to be learning-organisation coaches.

"In the old days, a depot manager would have been trained to manage, but now he manages [as part of] a team, setting targets and goals in a collaborative fashion," says S.A. Narayan, an executive director in charge of HR development.

He reports that the employees who participated in the consultants' workshops became more enthusiastic about the changes.

The most dramatic difference for the employees so far has been psychological, and that has had an impact on performance. Bharat employees certainly generated ideas before last year, but they didn't feel they had the authority to act on them without seeking approval within the chain of command, Sundararajan says.

Now they do. Sundararajan likes to cite the example of an oil depot worker.

Though it wasn't part of his job, the man voluntarily took on the responsibility of checking all tankers entering the depot to make sure they meet company safety regulations. And in the new corporate culture, he has the authority to ask drivers to comply with safety rules. The example is a small but potent object lesson in the benefits of turning attitudes from lackadaisical to customer focused.

"We've discovered the key to unleashing the energy in people, and at the heart of this is allowing people a say [in developing] their own future," says Biren Anand, one of the Bharat managers who became a learning-organisation coach and continues to spread the organisational-learning method across the company.

Anand reports that the head of the lubricants business called his team together in April after annual results showed revenue improvement of 16 per cent following two years of flat sales. He was simply amazed. "Sometimes you can get bottom-line results, but people feel flogged to death," Anand says. "Here you can hear the energy and enthusiasm. It feels as if somewhere they got the extra energy to be able to do this and more." Ernst & Young Environments for Creative Consulting The consulting business is booming, and that's bad-at least for the partners responsible for bringing in the best talent and keeping it. Consultancies of all sizes expect to battle increasing turnover among the 250,000 consultants who will be hired in the next few years, according to Kennedy Information Research Group, a consultancy based in Fitzwilliam, N.H. While most companies seek to solve the recruiting problem with higher pay, Ernst & Young LLP is trying some novel approaches that have to do with learning opportunities, career flexibility and a creative use of workspaces.

When the elevator doors open onto the second floor at the Ernst & Young Accelerated Solutions Environment (ASE), overlooking the Charles River in Cambridge, Mass., the low pyramids of books scattered around the enormous room and the suspended TV monitors and glass-encased booths make it seem a bit like a high-tech children's library. Certainly the last place you'd think you had entered was a consulting company. Then the low hum of group conversations is suddenly drowned out by quickly rising, upbeat rock music, and a young woman in black swishes by, ringing a tiny chime that rests on an Indian pillow, beckoning groups of polo-shirted clients to scamper to the next activity.

Chairs are shuffled, whiteboards are cleaned, even a wall partition or two is moved. "Day care for MBAs" is how one skeptic puts it; a Montessori school for adults is a more favorable description, says Chip Saltsman, a Baltimore-based senior manager who works in this and other ASEs.

What's going on here?

Far from frivolous, the 3-year-old ASEs, which operate in four US cities and in England, the Netherlands and Australia and which will open in other US and European locations in the coming year, are meant to be money-making, multipurpose centers. Consultants bring clients to "DesignShops"-three-day collaborative sessions that are carefully orchestrated and backed by a licensed methodology from MG Taylor -and in the unusual atmosphere they can reduce from six months to three days the time the clients need to make business decisions and resolve complex problems, E&Y says. But simultaneously, and not at all incidentally, the centers enable E&Y to experiment with the type of workplace and work habits its own newer employees already demand and its veteran staffers may one day find appealing as well. The new workstyle includes rapid-fire use of several media, such as whiteboards full of notes and illustrations from brainstorming sessions; and videos and books that at first glance appear unrelated to the client's business problem but in fact are carefully chosen to stretch the client's perspective. The environment offers the adrenaline, intensity and informality lacking in many traditional offices.

"We're very cognizant of the competitive market [for new consultants], and we sell the centers to prospective employees as a differentiating factor," Saltsman says. E&Y argues that the opportunities for new hires to learn by working closely with partners are superior to those at competing companies. The ASEs also cater to the new generation's preference for intense work followed by longer breaks, E&Y says. New consultants can either transfer to full-time work at ASEs or experience them when they are involved in a client engagement that makes use of one.

"We've had to go outside and develop knowledge workers who wouldn't normally find a home in E&Y practices," explains Larry Kaye, a senior manager and lead DesignShop facilitator. E&Y wants to attract creative people who don't necessarily have traditional consulting backgrounds, such as ASE knowledge worker Kenneth Roberts, who used to run an alternative theater and make videos for The Coca-Cola But some of E&Y's apparently traditional consultants also make their way into the ASEs. "I was your typical tech-head," says Jason Beaver, who has shifted from doing Oracle database implementations to being a full-time ASE process facilitator. "You have to have a certain personality that fits in here: flamboyant, creative, a team player." The description fits well with the culture E&Y wants to be known for to attract the current and future generations of knowledge workers. "The more we can move from command and control to choice, the more likely they'll stay with us," Kaye says.

PRT Group

New Communities, New Quality

With IT talent so scarce, many large companies are outsourcing their software development. But where do the IT outsourcers get their labor? One innovative approach comes from New York City-based PRT Group, which in 1995 launched its global network of software development centers in an unlikely location: Bridgetown, Barbados.

PRT's challenge, says former CEO Doug Mellinger, was to find a location that was economically and politically stable, within a few time zones of New York and would attract top IT talent from remote, low-cost locations such as India.

By providing employee assistance and comforts far beyond the usual benefits, PRT has been able to recruit and maintain a talented staff representing more than a dozen countries.

"I was working on proper projects quite happily, but this sounded like a new approach," says Gururaj Managuli of his decision to leave his native India in 1996 to work for PRT in the Caribbean. "I didn't know much about Barbados, just that it was a cricket country whose teams came to India." He was in for some surprises. The heat often kept him inside, cars cost four times what they did in the United States, where Managuli had also worked, and groceries were expensive. It was a friendly country, but it wasn't home. As programmers, the multinational staff of about 40-it later grew to 350-soon set up an electronic bulletin board, and plenty of griping took place there.

But PRT plucked virtue out of necessity and has created the sort of expatriate workplace where any Brit, Canadian, Filipino, Indian, Korean or native of any of the countries represented at its Barbados operation can feel at home. "We needed to have a function called facilitation, which few IT companies have, outside of HR," says the head of the Barbados operation, Srinivasan Viswanathan. PRT looks out for new employees beginning with emigration and arrival in Barbados, where furnished apartments await their arrival. The company leased groups of apartments around the island, though employees are not required to live in them and often move out after a few months. PRT also has created a brochure with information about cooking and entertainment, among other topics, and helps families contact schools, even sending a syllabus to parents before they leave their homeland. "We realized the expectations would be different for different nationalities: [Employees] from England look for spectator and water sports; people who come from Canada have concerns about insects," says Viswanathan.

The Caribbean gamble has paid off for PRT. The Barbados center has become a major developer for PRT clients such as J.P. Morgan, and it has been life-changing for the employees as well-Viswanathan estimates there have been seven PRT staff weddings, four of them cross-cultural, since the operation began.

PRT now has recruiting offices in Barbados, India and New York City, and contracts with recruiting agencies in England, Ireland and the Philippines. PRT has also opened centers in Hartford, Conn., and Madras, India, and Mellinger says he plans to expand his network of software centers. In the meantime, he's created a good pipeline that begins on an island hardly known for the IT talent PRT has attracted.

BP Amoco

I'm OK, My Company's OK

BP Amoco, known until recently as British Petroleum, has had two ambitious and apparently conflicting goals in recent years: to boost its performance and efficiency while maintaining a record of environmental responsibility, which can be expensive. The London-based company's answer to this conundrum is a program called Pacesetter, which has made employees at refineries around the world rethink their attitudes toward their jobs and themselves, and has led them to share knowledge and responsibility in a way that has raised the company's performance beyond its expectations.

The program generates the momentum for change at the individual level, starting with deeply personal questions such as what employees want out of their lives and careers. Their answers eventually affect how the whole organisation operates.

Although the mandate for the Pacesetter program came from the executive committee of the BP Oil business unit, the philosophy behind it demanded that refinery managers choose whether to participate. Equally unconventional for such a high-stakes initiative was the attitude of BP program leaders and consultants, who brought groups of managers and employees together to ask them about their most troubling concerns. Then the leaders told participants that the consultants would not solve those problems. Instead, they would teach the employees to find the solutions; they set up support networks across and among business units and promised to be available for help on a moment's notice.

Though this approach to performance improvement begins with individuals, employees are soon grouped into teams of 10 to 12 people, and they tackle real business problems such as the delicate task of temporarily shutting down a refinery for maintenance, says Robert Hanig, a vice president and director of Waltham, Mass.-based Innovation Associates, part of Arthur D. Little, which assisted BP with the program. And performance has improved. The goals of Pacesetter are derived from an industry benchmark of refinery performance metrics, the idea being to get all refineries operating in the top quartile.

Though industry experts say this target is impossible to reach, BP wants to try.

One of the more unusual successes attributed to Pacesetter has come in the company's working relations with a labor union in the Netherlands, where BP used team learning and "personal mastery," a collection of techniques that increases one's ability to set and reach goals (in these cases, in a business setting), in shutting down part of a refinery and getting support from organized labor for future projects. Employees and union representatives, though not pleased about the shutdown, nevertheless said they felt for the first time that BP wanted to include their vision of the company's future in its plans.

Many refinery employees also changed their way of working together, explains Tom Standing, BP's senior adviser on learning and organisation development and a leader of the Pacesetter program. "The fast-track folks aren't a high per centage of people at a refinery," he says. The employees there "tend to stay in the community and have a lot of history with each other"-meaning that ingrained habits and interpersonal dynamics can be hard to change. Nevertheless, Standing credits the Pacesetter program with dramatically altering the way the BP refinery staff works together. For example, one of the most expensive and risky procedures in the business, the temporary shutdown of a refinery for major maintenance, has improved. During these turnarounds, as the industry calls them, systems are unstable as heat is reduced when machinery is shut down and then they heat up quickly as they go back up. "It's a time when people could go into their own little closets and not realize others need to know what they're doing. You need to anticipate what your actions will do," Standing explains.

Now employees keep the entire refinery in mind when handling delicate equipment, alerting others to the impact their actions might have when, say, shutting down valves.

More than half of the company's refineries are improving performance with the Pacesetter program, Standing says. "At BP and Amoco, if you were hired in the 1950s you thought you had a job for life," he says. "What personal mastery is saying is that deep down you have a choice of what you want to create in life.

You apply that to organisations and you have organisational learning."

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