Over the last decade, British Telecom has endured privatisation, increased global competition and cut payroll from 250,000 to 100,000. Global HR director Alex Wilson shares how HR played an essential part in ensuring the organisations prosperity amidst such profound transformations
Loyalty is an investment," says British Telecom's (BT's) global head of HR, Alex Wilson. "And I have yet to work at an organisation where the loyalty is as tangible and where the emotional bond between employees and the organisation is as strong as it is with BT." Pretty impressive, given the organisation has slashed its payroll by a staggering 60% over the last decade. Just how did HR manage such a "loyal bond" despite such cuts?
"No, that is not the case at all," says Wilson, to the suggestion that BT has been wielding the axe over the last 10 years. To coldly cut staff would otherwise damage the strong employee dedication Wilson claims the company enjoys. Rather, "We have a proud record of never operating a forced redundancy programme. During the time that we have been downscaling staff numbers, it has all been entirely voluntary."
Voluntary mass retrenchments due to technological change
Wilson explains that BT reserves the right to remove its brightest employees from the larger pool of staff to which its voluntary retrenchment offer is extended. However, for any employee outside a small 'earmarked' group, BT has never forced redundancy on staff. It is attrition at its healthiest, as many of BT's longest serving staff members take home generous severance payments.
A pragmatic Wilson says, "We've never had to force people out. We have always been a financially strong organisation. Downsizing has been called for through obsolescence of roles due to changes in technology, and the need to perform financially. We just do not need the same number of staff that we did in the past."
"We pay great packages to people who choose to leave, well above the legal requirements in the UK. Some people who have been with BT for 20 years or more can receive up to 18 months pay." Wilson says that his department also counsels and advises staff on their re-employment options. In these small details, BT's core value of employee commitment is engendered first and foremost by management's example.
BT will also undergo significant change in the future, in preparation for what management refers to as a "21st century network company." Yes, it has taken full advantage of the voluntary redundancy programme to drastically reduce technicians, but it has also expanded in the area of ICT. Hovering over all these changes was a redefinition of core values and their transmission from HR to the wider organisation.
Moreover, BT didn't fit the mould of a typical downsizing company of the mid-nineties. Most of these shifted quite radically from a pyramidical organisational structure to a flat one. In such organisations, downsizing's main casualties were members of middle management and their retrenchments were usually of the forced kind. BT, using periodic voluntary reductions, gradually released the build-up of economic pressure created by technological redundancy. In doing so HR managed to create loyal employees, whilst delivering a significantly reduced headcount.
As Wilson explains, this loyalty originates in such executive initiatives, along with clearly defined core values including human capital management based on trust and consistent policy implementation.
New corporate values
Wilson is a stereotypical Scotsman, pragmatic and to the point. Yet despite having been with BT for just two years, he is quietly embedding the organisation with new corporate values.
He explains that, "In the past our values have been there, but they have been loose. Now, it is management's task to accomplish a high-performing organisation. And it is my task to communicate this to our staff."
Admittedly, cynics will counter that achieving performance goals and perpetuating core values is a universal organisational objective. Wilson agrees that this is indeed every business' goal, however he adds that great organisations distinguish themselves by the solutions and methods they use in order to become 'high-performing'. "This is all about the solution and in that sense becoming high-performing is connected directly to our values."
In Wilson's paradigm, BT's organisational objectives such as brand development, a customer service mindset, employee loyalty and strong leadership are intimately dependent on HR management. For they all depend on recruiting personnel with suitable values, abilities, and training them up to their highest possible return on human capital. In this way, HR's recruitment, training and mindset will be reflected in an organisation's culture and customs.
Top down defining and transmitting of core values
However, "If any of these values break-down, then we cannot deliver on our customer promise," adds Wilson. To avoid such an occurrence, Wilson opines that, "The application of all HR strategy must occur from the top down." Hence BT has formalised a process by which executives define core corporate values, which HR then transmits to various organisational divisions.
Through this osmosis of HR values to management, staff and ultimately, customers, cost-effective, customer-centric solutions are delivered. "It is the old adage regarding the strength of the chain depends on the weakest link." And given BT's long history as a state-owned institution, there were many weak links that required strengthening.
Even now BT is still perceived by many as a very 'government' business: bureaucratic, hierarchical, with systems heavily weighed down by large rolls of red tape. Nothing could be further from the truth, although Wilson does admit that BT's tradition as one of the world's oldest, blue-chip telco providers, means that it is still "very close to the government."
BT's historical relationship to Britain's nationalistic governments forced it to confront the legacy of its seniority-based, bureaucratic, British civil service heritage. Although BT, "Respects the enormous contributions made by long-time staff," such veterans owe the longevity of their employment tenure to exceptional performance, not their seniority.
"I wouldn't remunerate people in any other way," affirms Wilson. BT's managers are rewarded though share schemes, which represents a variable component of their compensation packages. Team and even company performance is also taken into account, which allows for good performers to shine in tough times.
In this and numerous other details, BT transcended its historical role as a government-backed national champion. It is now a fully privatised entity on the London SX as a Top 20 FTSE company.
The most enduring legacy: finding and developing leaders
Complementing Moore's establishment of new Asian operations and businesses is Wilson's drive to develop leadership capabilities. During his time with BT, Wilson initiated a reform of the organisation's existing leadership training programme. The underpinning of good leadership development is what Wilson terms, "Strategic sourcing." He means this in both an endogenous and exogenous sense. "Sourcing within the company to isolate those to be involved in succession planning and outside of the company through graduate recruitment right up to executive search."
Leadership planning at BT's numerous regions and divisions is analogous to appointing provincial leaders in a large country. Wilson elaborates that, "Succession planning must be conscious and well-planned. We categorise people into talent pools and monitor their development." Hence, prospective leaders are selected early on and guided into training programmes adapted to their career path.
Nevertheless, Wilson admits that succession planning only works to the medium term since, "Planning for next year or even in three years time is fine, at about five years however, it becomes a little fuzzy. Besides, people develop at different rates." He mentions that while developing leaders is a long-term process, succession planning must also be carried out at every level of the company.
Wilson adds that, "When it comes to leadership and succession planning this must be considered at all levels of the company. It is a mistake to think that these issues apply only to the top level management." In Wilson's perspective, human capital initiatives are sparked at the top but it is HR's task to effectively deliver them to all of the organisation's layers.
Simplification and redefinition of leadership programme
Moreover, Wilson cites the simplified redefinition of BT's 'Leadership Capability Programme' as one of his most important achievements. Formerly the programme had many redundant steps but Wilson simplified it into fewer, clearly defined and departmentally relevant stages. He adds that, "In the Programme, we are now down to six or seven key sub-programmes, then there are 40 others that cater to the needs of the individual." explains Wilson.
There is a clear, yet simple, methodology to Wilson's leadership development system. Good leaders, need only one or two qualities in common - such as an ability to lead people judiciously or effectively communicate with their staff. They can otherwise differ in every other aspect of style and personality. Wilson never wants a disciplined army of cloned managers and would rather that BT reap the benefits of a colourful and diverse management team.
KPIs: there if you look
To develop both future leaders and the wider base of other organisational skills, Wilson relies on KPIs. "Key performance indicators are never hard to develop," he says nonchalantly. Although this contradicts the repeated statements of many Singaporean HR professionals, Wilson insists that, "You [HR] just need to think creatively." Wilson even measures himself and his HR colleagues, notwithstanding the fact that HR professionals are perceived as notoriously difficult to rate empirically. "Staff retention rates and motivation rates are examples of the measurables for HR," he says, "as much as customer satisfaction, failure rates and response to failures are for the technicians."
Final word
In Wilson's exposition on BT's policies, several themes prominently emerge. One is that management must lead both in the formulation of new policies and, as was the case in BT's voluntary retrenchment programme, by example too.
Secondly, HR's role extends far beyond the mere management of employee recruitment or the execution of administrative details. Ideally in his view, HR should be intimately involved in devising new policies and core organisational values at the executive level. With its intimate ties to employee rank and file, HR can provide an organisational perspective that takes into account non-management personnel.
Furthermore, when core values and competencies are defined, it is up to HR to communicate the organisation's core mission to rank and file staff. Indeed, in Wison's BT, the future depends on how well HR identifies and develops those leaders who best embody the organisation's core competencies. As BT's prosperity during the last decade's intense changes demonstrates, much success can be enjoyed while on the road to transformation. HRM
BT's Alex Wilson
Alex Wilson, BT's Group Human Resources Director, joined the organisation on 15 July 2002 from ICI, where he was Senior VP Human Resources and Group Communications.
Prior to ICI, Wilson operated in a variety of senior HR and line management positions in Ford, Grand Metropolitan, Guinness and Diageo. He has lived and worked in the USA as well as managing operations in South America, Asia and Europe. Wilson is experienced in all aspects of HR, most notably change management, industrial relations, people development, and compensation and benefits. Wilson, who is 50, has a degree from the University of Strathclyde in Scotland, is married with five children and lives in South Oxfordshire.
BT in a nutshell
BT is one of one of the world's best known information and communications providers, with a strong presence throughout Europe, the Americas and Asia Pacific. It employs 100,000 people, 12,000 of whom are located in offices outside of the UK.
BT presence in the Asia Pacific is nearly 20 years old. It serves more than 500 institutional customers, through 32 cities and 14 countries. Pan-regional 24/7 support is provided through service centres in Sydney with centres also in Hong Kong and Tokyo.
In 2001, 2002 and 2003, Dow Jones named BT the "Sustainability Leader among the world's telecommunications companies."