Case study: Leading with service - BAE Systems, Bryony Moore Associate Director MetaValue & Advisory Board Member at Brunel Business School
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Case study: Leading with service - BAE Systems, Bryony Moore Associate Director MetaValue & Advisory Board Member at Brunel Business School

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Case study: Leading with service - BAE Systems, Bryony Moore Associate Director MetaValue & Advisory Board Member at Brunel Business School

Case study: Leading with service - BAE Systems, Bryony Moore Associate Director MetaValue & Advisory Board Member at Brunel Business School

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  • I am a crusader for Service in a world obsessed with Process. <br /> I believe in starting with the customer and finding out ‘What’ they want and then letting Process design ‘How’ the service is delivered. <br /> In my estimation, less than 5% of businesses start with the ‘What’ and before you disagree with me ask yourself how often have you been caught in the situation where a company’s processes won’t allow you to receive the service you desire. The times I want to say to a bank teller, someone in a call centre, or an airline booking form: your process should not be my problem! But unfortunately so often it is and that’s how businesses lose money. <br /> I can categorically tell you that if you Lead with Service, Service1st will make you money. <br />
  • I asked this question of a room of approx 20 HR Directors at BAE Systems when they were considering whether to outsource HR to Xchanging or not. TELL THE STORY! <br /> Service is all about engaging positively with your customers, asking questions about what they think they want, agreeing a definition of the service required and then consistently meeting (rather than exceeding) their expectations. <br /> Now human nature being what it is human beings don’t always keep to their word so it is usually helpful to have some metrics and standards by which to measure whether the ‘How’ matches up with the ‘What’ was requested in the first place. It’s also helpful to ensure that the customer hasn’t moved the goalposts, as they have a way of doing. <br /> So we start with the ‘What’ we follow with the ‘How’ and we check that both sides have done what is expected of them and are happy with the outcome. Simples! <br /> What about this in the context of HR? Are there any HR Professionals in the room? Then forgive me for what I’m about to say. <br /> I had no real idea what HR did or the value they can add to an organisation until I was faced with becoming Director of Service for an HR business. Unfortunately, I don’t think I am alone in this ignorance. However, the Service Definition process is the most succinct and accurate way to explain a subject, a situation, a department, in fact just about anything. <br /> So let me tell you about BAE Systems Shared Services which 6 or us (3 Xchanging founders and 3 BAES senior managers) helped create from May 2001. <br />
  • The point to make here is the losses suffered in both 2000 and 2001. <br /> Plus the sheer scale of the business. Australia and USA really would have been a step too far. <br />
  • The three Xchanging Founders took the roles of MD, FD and SD. None of us had any formal HR knowledge or experience. The experience we brought to the table was as Business and Organisational experts. The HR expertise lay with the employees who had transferred under TUPE to XHRS. <br />
  • So following on the theme of What vs How let’s start with WHAT we did and then we’ll take a look at HOW we did it. <br /> I’m not sure HR is a department that is readily invested in by many companies but you can imagine that HR in a National Defence business like BAE Systems is not a top priority for investment. So while BAE had and still have a highly respected and influential HR team <br />

Case study: Leading with service - BAE Systems, Bryony Moore Associate Director MetaValue & Advisory Board Member at Brunel Business School Case study: Leading with service - BAE Systems, Bryony Moore Associate Director MetaValue & Advisory Board Member at Brunel Business School Presentation Transcript

  • BAE Systems & Xchanging HR Services Case Study ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 1 Leading with Service by Bryony Moore, former Co-Founder & Chief Customer Officer 14th May 2014
  • Welcome • What is Service? • What does HR do? ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 2
  • BAE Systems • Formed in November 1999 • Merger between Marconi Electronic Systems & British Aerospace • Employees – 100,000+ est. • UK Locations – 50+ • Promise to the City of synergies leading to savings ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 3 1999 Turnover £8.9 billion Net Profit £328 million 2000 Turnover £12.2 billion Net Profit (£19) million 2001 Turnover £13.1 billion Net Profit (£128) million
  • Xchanging Ltd • Formed February 1999 by David Andrews, ex Anderson Consulting Partner • Objective: ‘Turning back offices into flourishing enterprises’ • 8 Co-Founders plus 8 support staff by early 2000 • Serviced office in Berkeley Square (approx 100 sq metres) • £50m draw down facility funded by General Atlantic Partners, USA • Revenues in 1999 and 2000 zero ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 4
  • First Customer • Contract with BAE Systems UK to deliver transactional HR Services signed February 2001 • Came from a targeted letter to Terry Morgan, Grp HR Director, BAES from the CEO of Xchanging • Took one year to land the deal • Value £250m (£25m p.a. for 10 years) • 460 HR employees, in 30 UK locations, transferred into XHRS Op Co • 3 Xchanging founders transferred onto XHRS Op Co Management Board ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 5
  • What is Partnering? Guaranteed cost savings Service assurance 50/50 share of upside What are the Benefits? • A jointly owned commercial business • Xchanging has operational control • Partner has board seats • Partner contributes resources / people • Xchanging brings management, expertise, know-how and independence • A true open-book partnership • Alignment of interests through profit sharing • Capital upside • Enables large complex undefined functions to be transformed into commercial businesses The Value Proposition 37 … to maximise value together
  • Service1st – What? • Brought HR in from the shadows and focused on it • Defined the scope of the project • Uncovered inaccuracies, black holes, wastage, duplication, £m opportunities, hidden talents, etc. • Introduced transparency of HR activities, customers and their requirements • Highlighted both the actual and the potential value of HR • Changed the mindset of the HR staff from back office operators to front office service deliverers • Paved the way for other competencies to apply their non-HR expertise, e.g. Process, Procurement, Environment, People, Technology • Grew the base business with BAE Systems • Delivered an improved set of services for a predictable, reduced price • Created additional revenues via 3rd party sales ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 7
  • Service1st – How, short term? • Established hand picked team of Relationship Managers from customer transferees and specialist recruits • Engaged continually with XHRS employees, retained BAES HR staff & customers of HR • Drew a line in the sand, i.e. established ‘as is’ services • Defined: • service classes • customer types • established volumes • performance metrics and standards • Secured buy-in from all stakeholders to a baseline definition of services being delivered on day one • Regularly told everyone what we were going to do, when we were doing it and when we had done it what we had found or produced ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 8
  • Service1st – How, mid term? • Established a Service Review Board, which met monthly • Produced one page performance dashboards for 15 BAES businesses • Surveyed the customer base for their opinions and requirements • Created two way communications mechanisms • Agreed what was important to measure and to what standard • Established and agreed a ‘should be’ set of services and raised standards • Established and measured the ‘quality’ of the relationship • Invested in training ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 9
  • Service1st – How, long term? • Expanded the range and scope of services under the existing contract with BAE Systems • Used spare operational capacity to expand services • Grew revenue by offering services to 3rd parties • Refreshed HR knowledge from 3rd party customers • Enhanced Xchanging’s expertise and experience by association and collaboration with BAE Systems • Introduced a price-for-service, rather than an annual contract price • Facilitated buyout of BAE Systems share of XHRS JV by Xchanging plc ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 10
  • Key Considerations • Pace • Scope • Vision • Perception • Communications • Moving goalposts • Senior leadership ownership • Proven, repeatable methodology ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 11
  • Learning • Seek out brave leaders faced with burning platforms • People require training to ‘manage a service’ rather than ‘managing people’ • Be flexible about the pace, priorities and direction of change • Quickly identify supporters and champions of the project at senior levels • Seek out resentment/unhappiness/resistance and extinguish asap • Dolphins vs Whales • Perception is often more powerful than the truth • You can never do enough communication • You can’t measure everything ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 12
  • Value Generation, examples • 1.5m items of data cleansed over 2 years, driving data accuracy to 98% accuracy • 27 BAE Systems HR legacy IT systems consolidated to one in 3 years • 1500+ standard recruitment letters, reduced to less than 20 • XHRS created an eHR capability in 6 months and rolled it out to 38,000 employees paid for by savings in the first year of the contract • Improved services at reduced price • No external consultancy fees during transformation project • £100m of value, of which £57 capital upside delivered to BAE Systems in 6 years (March 2007) ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 13
  • Conclusion • Innovation gives competitive advantage • Service is all about a detailed, tangible, systematic approach • Consistently meet, rather than exceed, your customers expectations • A base of trust leads to business growth • A small, energetic, focused team can move mountains • Focus releases value ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 14
  • Bryony Moore MBA • History • Black & Decker - Sales, Customer Service, NPD Marketing (6 years) • Braun UK & Ag - Marketing, International Business Development (6 years) • BME Limited – International Management Consultant (9 years) • Xchanging plc - Co-Founder & Chief Customer Officer (8 years) • Association of MBAs – Trustee (3 years) • Current • MetaValue - Associate Director (1 year) • Brunel Business School - Member & Deputy Chair (4 years) • Headington School, Oxford - Governor & Marketing Committee Member & Deputy Chair (2 years) • Henley Business School – Pioneer (1 year) • Steak of the Art, Restaurant, Bristol – Investor (1 year) ©MetaValue Ltd 2013. No part of this document may be circulated, quoted or reproduced without prior approval of MetaValue Ltd. 15