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Page 4, interview with David Stephenson

  1. 1. HR&BUSINESSLINKING PEOPLE, PLANNING AND PRODUCTIVITY NOVEMBER 2010Peel offthe labelHow to look behind frequentlymisleading cultural labels to seethe true nature of an organisation tune up your workforce engineering change rethinking the recession Better workforce planning can Process review can enable the Future-proof responses to bring productivity rewards p10 elusive ‘more with less’ p14 the economic downturn p18
  2. 2. Information.Intelligence.Networking.STRATEGIC PLANNING SOCIETYSTRATEGY COMMUNITY SHAPING TOMORROWOur online discussions enable professionals to Free access to Shaping Tomorrow (worth £95pa),share insight and experience. Live network events the world-leading futurist database of over 25,000allow you to meet other people working in the resources to help organisations anticipate andstrategy field, and we support our members in better prepare for emerging global opportunitiesarranging their own events. and risks.LONG RANGE PLANNING CONFERENCESSix times a year members receive the leading Learn from others’ experiences. You will receiveinternational strategic planning journal; academic advanced notification and discounted attendancein flavour, but with practitioner techniques offered at many leading conferences on strategic issues.(worth £120pa). EVENTS DIARYSTRATEGY MAGAzINE The strategists’ diary, includes many free orFour times a year members receive our acclaimed reduced-cost events from the SPS and othermagazine, dedicated to helping practitioners bodies. We also welcome members who wish toimprove their strategy formulation and promote their own meetings and events to theimplementation. SPS community.LIBRARY EMAIL NEWSLETTERUnlimited access to our online library containing Our monthly newsletter keeps all SPS communityover 320 expert articles related to strategy, with more members abreast of strategy news, events,being added every month. courses, research and insight on strategic topics. For further details on membership and more information about SPS please contact us: T: +44 (0)845 056 3663 E:
  3. 3. welcomeThis is the second edition of HR & Businessand I hope you will find it of interest andpass it on to your colleagues. Our focusas a society is about the ways in which HRsupports business goals through planning,people strategies, metrics, productivity andpartnership. 6 10 14 18 In these straightened times, these areessential contributions from HR professionals, 4 Upfront 14 Engineering a process changeand they need the knowledge and skills News, views and events from the HR Process engineering is a different way toto be able to play their part. Public sector Society, together with some of the analyse business activities for businessesorganisations, in particular, are having to latest developments in the industry. that need radical change to allow themrethink their deliverables and processes, and to achieve far more with far less, saysseek productivity improvements. A mutual 6 The trouble with cultural labels Kees van Haperen.partnership between line operations and HR Labels of organisational culture canis essential for the necessary resource re- mask systems of great complexity but 18 Recession brings radical thinkingplanning within a nervous employee relations there are approaches managers can Research has revealed that organisationsenvironment. HR must be outward-looking to take to see the richness beyond the have been responding creatively to thethe business, not immersed in its own agenda. label, says Naomi Stanford. recession, using new strategies that Do keep an eye on should stand them in good stead for thefor our news and events, which include 10 Shift workforce planning into a future, says Peter Reilly.workshops in many business-related HR higher gearsubjects. The Society is currently developing Creativity and innovation are essential 22 Forward thinkingan attractive membership proposition to as organisations adapt to the economic HR professionals in the public sectorencourage more members and broaden the downturn. George Blair shows how must not become absorbed withnetworking opportunities, on- and offline. a fresh approach to staffing can bring redundancies. In this environment, I hope to meet you personally at one of our productivity dividends. they have a key role to play as businessevents in the near future. partners too.Andrew MayoPresidentif you would like to discuss any of the issues raised in this publication please contact Published by gristAndrew Mayo on +44(0)1727 843424 or email 21 Noel Street, Soho, London, W1F 8GP Publishing director Mark Wellings editor Sarah Coles Art director Andrew Beswick hr Society is a network of senior HR professionals, sub-editor Jonathan Lalljee academics and others involved in value-added HR strategy. Our Commercial director Andrew Rogerson aim is to lead thinking and share good practice in the linking of Telephone +44 (0)20 7434 1447people, planning and productivity, and provide a network forum for professionals working Website www.gristonline.comin this area. Our activities include holding events to share knowledge; offering educational Advertising and sponsorship Ian Cartermaster classes; and facilitating and distilling research and disseminating knowledge. ( / 0844 858 4852)For more information visit This publication is printed on paper from sustainable sources using a chlorine-free process. h r&Business / novemBer 2010 3
  4. 4. NewsAll the latest news, views and events from the HR Society and its membersWorkforce planners must prepare forthe end of the default retirement ageAs the consultation on plans to scrap the and providing some employmentdefault retirement age (DRA) conclude, benefits, such as critical illness cover,it looks increasingly likely that it will be next to impossible.” He claimed it wouldphased out from April 2011, with serious raise complex legal and employmentimplications for workforce planning. questions which would create The consultation, from July to uncertainty for employers and their staff.October 2010, proposed scrapping the He concluded: “A default retirement ageDRA, which allows employers to force helps staff think about when it is rightstaff to retire at the age of 65. “With to retire, and also enables employers tomore and more people wanting to plan more confidently for the future.”extend their working lives we should The Managing an Ageingnot stop them just because they have Workforce report from the Charteredreached a particular age,” said Employment Relations Minister Management Institute (CMI) and the Chartered Institute of PersonnelEdward Davey. and Development (CIPD) found that only 14% of workplaces are There is every sign the proposals will be implemented, and that ready to accommodate a changing workforce age profile.the DRA will be phased out between April and October 2011. Andrew Mayo, president of the HR Society warned: “This This will have massive implications for workforce planning. John change makes workforce planning more complex, as the ability toCridland, Confederation of British Industry deputy director-general, predict requirements is now potentially difficult. Early warnings ofsaid: “For employers, these proposals could make workforce planning employees’ intentions will be needed.” M eM ber Spotlight David Stephenson, group head of organisational development, Royal Mail Group What are your key same time become more agile and be changing. Each individual goes through challenges at the moment? innovative in meeting future needs. their own change experience, so we must The sector is facing the recognise the importance of individuals. Like challenge of a fall in mail How do you keep staff engaged most organisations, one of the key relationships volumes, because of the in a challenging time? is with their line manager, so supporting economic downturn as well A few months ago we reached an managers is vital. as new technology. While this agreement with the unions and that offers opportunities in new has given us a positive opportunity What tools work well for you? areas it also means the business for us all to work together to improve We have a very proud, loyal and passionate must adapt and redesign. the business. workforce, and tapping into that works well. Changes in regulation mean there is more It’s always important to be straight That can be everything from local incentives competition, with competitors able to use our with people and that’s no less important such as ‘watch and win’, which allows staff to delivery networks much more cheaply. during challenging times. You must never benefit from spotting business opportunities, Another OD challenge is to balance the underestimate the need to communicate. to local problem solving schemes to make us tension between the need to modernise the It’s important to understand what is driving more operationally excellent. Coaching and business and become more efficient, yet at the people’s engagement and how that might supporting people through change is also key.4
  5. 5. net Working events HR Society diaryReturn on investment is key jaNuary Masterclass: Understanding february Presidents Forum: Current issuesfor HR professionals organisational Development for Hr in the Public sector Chris Nutt, an experienced The session will be lead by Angela HR professionals are not driven to identify organisational development O’Connor, chief people officer at their return on investment (ROI) by leader, facilitator, consultant and the National Policing Improvement organisational edict, but because they feel it vice president of the HR Society Agency, where she is head of is an essential weapon in their professional will lead this practical masterclass profession for police HR and armoury, says Professor Andrew Mayo, designed to offer insight into how learning and development staff president of the HR Society. to improve your organisation. in England and Wales and lead Speaking after his annual Essentials It complements conventional, on police learning, development Series workshop on the subject, he said: structured thinking with a mindset leadership, and people strategy.“It is a professional responsibility to be able to demonstrate that that enables you to intervene more She will share the benefits of herwe have spent money wisely and delivered value for it, and effectively in the flows of the real experience including as directorthis year there was a clear recognition among participants that world. of HR for The London Borough ofknowledge of ROI is a basic requirement for any professional.” It avoids reducing organisational Enfield and heading a national HR The workshop explores the theories behind ROI and helps development to statements of team determined to ensure theparticipants put them into practice. It goes through setting grand theory, and takes its task as Crown Prosecution Service becameobjectives, devising the formula for ROI, addressing the difficulty understanding why, what and how a world class prosecuting authority.of measuring intangibles and explores specific cases. you can learn from past experience Among the many awards she Mayo says: “We offer practical solutions and discuss the and make an effective, practical has received are for HR Director ofexperiences of all the participants in some detail. As ever, as difference in your current context. the Year 2007 at the HR Excellencepart of the process, the participants were able to use examples Participants will explore the Awards, and positions is in Humanof successes to offer solutions to one another as well as bringing cultural characteristics of their Resource Magazine’s top 10 mostsome of the theory to bear on their own projects.” organisation and their preferences powerful people in HR list, and Andrew Mayo will run another workshop on Measuring ROI for the way they work to change in Personnel Today’s top ‘powerin 2011. Visit www.hrsociety for more details. and sustain it for the better. players’. Her HR teams have been They will also gain insights into the recipients of numerous awards. organisational development as She is a board director of Skillshr society document a philosophy and a toolkit; and discover how to live with the for Justice and has been elected the vice president of the CIPD Policelibrary launched complexities, to be shrewd and Forum. practical as well as professional Date: TBC February 2011As part of its mission to help inform members and disseminate Date: 10.00-4.30, 25 January 2011 Location: One Whitehall Place,the latest thinking on issues affecting them, the HR Society Location: One Whitehall Place, London SW1A 2HEhas launched an expanded document library on its website, London SW1A 2HE Fee: £190 plus VAT for members Fee: £320 (& VAT) for members, the HR Society and £275 plus VAT The library is split into a number of categories including: £395 (& VAT) for non-members. for non-members.workforce planning, employee engagement, people strategies, HRmetrics, human capital management, employee demographicsand HR business partnership. The documents available range from introductions to thetopic, to articles written by HR Society council members and All attendees at their first Hr society event will receive one year’suseful diagrammatic representations of concepts. There is also a complimentary membership of the Hr societyfacility to enable member feedback on the articles. Andrew Mayo, president of the HR Society said: “This library For more information visit useful insights into the topics for HR professionals who to book any of these events contact Lara Roberts, programme administratorwant a more detailed understanding of the various subjects. Tel: 01264 774004 Fax: 01264 774009 Email: the coming months and years we will be adding to the if you have suggestions for events, subjects or speakers please emailbreadth and depth of the library and introducing services for HR Society president Andrew Mayo at only.” h r&Business / novemBer 2010 5
  6. 6. the trouble withcultural labelsLabels of organisational culture can mask highly complex systems, but there are approachesmanagers can take to see the richness beyond the label, says naomi stanford. F ollowing his seminal research on national These labels are a fact of organisational life. cultures at IBM between 1967 and 1973, Think of your own organisation – what label do Geert Hofstede was asked: “Between the time people attach to its culture? Common ones are a that you were first analysing this data and now, culture of innovation, a culture of collaboration or has your definition of culture changed?” His answer a culture of teamwork. A rather more vivid label was: “No, not really. Of course, you have to realise appeared in The Economist (31 July 2010), which that culture is a construct. When I have intelligent talks of Pimco, one of the world’s largest bond- students in my class, I tell them, ‘One thing we fund managers, having “a culture of constructive have to agree on: culture does not exist’. Culture is a paranoia”. concept that we made up which helps us understand Labels are a fact of life because they serve several a complex world, but it is not something tangible like useful purposes: they are identifiers, much like a a table or a human being. What it is depends on the luggage label on a suitcase; they act as flags for way in which we define it.” waving and mustering behind (or tearing down and People tend to define the culture of an organisation attacking); they are a quick and easy-to-use form in terms of a label, as if it were a tangible, as in of shorthand or sketch that people can recognise Apple being described as having “created a culture or picture; they are yardsticks for measurement or of secrecy”, and Walmart “an austere culture built by comparison; and they can act as a defence. old man Walton” or Unilever’s CEO, Paul Polman, wanting to develop “a culture of accountability”. Shallow and misleading The first problem with labels of culture is that they are shallow and confusing. The painting of a pipe by Magritte labelled “Ceci n’est pas une pipe” (this is Dr Naomi Stanford is an organisation design, not a pipe) is a good example of this. The confusion innovation and culture consultant with clients in the lies in labelling something that looks like a pipe as private, government and non-profit sectors in the ‘not a pipe’ because, in fact, it is not a pipe but a US and Europe. She helps develop adaptive, open two-dimensional representation of a pipe. Similarly, and innovative organisations. She is the author of: a label of a culture is not the culture itself but an Organization Design, The Collaborative Approach, abbreviated verbal or written definition. Labels do The Economist Guide to Organisation Design and not represent the pervasive, implicit, nuanced, subtle, The Economist Guide to Organisation Culture. complex and dynamic ways of community being that Email: might be generalised across an organisation, but are experienced individually and subjectively.6
  7. 7. orgaNiSatioNal culture “ Culture is not something tangible like a table or a human being. What it is depends on the way in which we define it.” Second, labels imply something fixed in the way because this, in his view, would lead to “the bestthat a flag is fixed. The flag of a country does not business decisions for the firm as a whole, and payingchange beyond recognition – the Union Jack or employees in stock helped reinforce that culture.the Star Spangled Banner have been the same for I wanted them all to think and act and behave likedecades. An organisation’s culture, however, is always owners.”moving and fluid. Toronto-based academic Gareth If, as in this case, there is no concerted effort toMorgan’s definition states: “[Culture is] an active create a shared understanding then simply making theliving phenomenon through which people jointly statement is a recipe for disaster. It makes a numbercreate and recreate the worlds in which they live.” of assumptions: that Fuld’s notion of ‘teamwork’ is the same as each employee’s; that employees have ateamwork trap common view of what ‘thinking, acting and behavingThird, labels do not invite the creation of a shared as an owner’ is (and that they want to be an owner);meaning. When Richard Fuld took over as chief that people are motivated by the same rewards – inexecutive of Lehman Brothers in 1994, he was this case shares; and that ‘teamwork’ leads to the bestdetermined to establish a culture built on teamwork business decisions. > h r&Business / novemBer 2010 7
  8. 8. that the creation of shared meaning is the key factor.“ If there is no concerted effort He defines culture as “a pattern of shared basic assumptions that the group learned as it solved to create a shared understanding, its problems of external adaptation and internal integration that has worked well enough to be simply making a statement about considered valid and, therefore, to be taught to new members as the correct way to perceive, think and culture is a recipe for disaster.” feel in relation to those problems”. unpack the label Given that labels of culture are a fact of organisational life, and also that they have severe limitations, there are approaches managers can take to see beyond the> Fuld’s main action to develop a culture of label into the richness of what it stands for. teamwork was to link compensation to the overall Visualise a suitcase with your name and address performance of the firm through equity awards on the luggage label. From the name and address a (Fuld himself being awarded colossal sums, certain amount can be assumed: someone might somewhere between $350 million and $484.8 judge that you live in a good neighbourhood, or that million between 2000 and 2008). When Lehman number 3A implied a flat rather than a house. But Brothers filed for bankruptcy during the financial the assumptions would have to be based in prior sector collapse of 2008, it became clear that the knowledge of addresses, and assumptions are not culture of teamwork was one based on greed, lack of always correct. You might have borrowed the suitcase oversight and accountability, and blame. These are and forgotten to take the original owner’s label off. not the characteristics commonly associated either However, the act of unpacking the suitcase with teamwork, or with well-run owner-managed is going to give a lot more clues about you. The businesses. clothing, toiletries, possibly books, medications and American organisational academic Edgar documentation will all tell a story. It is the same Schein’s definition of culture reinforces the notion way with organisations. Unpacking the thing that Questions: unpacking the label These questions use the first two parts across the whole organisation or in • Why do the values need to define of the O’Reilly/Chatman definition: pockets? what’s important? Do they do this • When are they shared/not shared? or is there a disconnect between • What are your shared values? In other words, what circumstances what’s important and any values • How do you know these values are or contexts foster sharing values? demonstrated or stated? shared? What is the evidence? • What is important to the • When does the link between • Why are these shared values organisation? defining what’s important and important (in terms of achieving • How do the shared values help shared values come into play – in your business strategy)? define this? You need evidence what circumstances? • Who shares these values? Are they here. • Where in the organisation is it shared by everyone or just some • Who defines what is important and obvious that shared values help people? thus fosters the values? Or do the define what is important? What can • Where are these values shared – values foster what’s important? you learn from this? 8
  9. 9. orgaNiSatioNal cultureis labelled allows you to tell the story and see the book oFFerpatterns and themes that are referenced in many ofthe definitions of culture.Define cultureThe first step to seeing beyond the label is to take adefinition of culture that appeals to you. There aremany beyond the ubiquitous “the way we do thingsround here”. A definition that works is from CAO’Reilly and JA Chatman, authors of Culture as socialcontrol: Corporations, cults and commitment (1996),which suggests that culture is “a system of sharedvalues, defining what is important, and norms,defining appropriate attitudes and behaviours, thatguide members’ attitudes and behaviours”. After definition, the second step is to identify thelabel, for example: “We have (or want) a culture ofinnovation.” The third step is to unpack that in termsof the definition by asking a lot of questions (see box). organisation Culture:Questions can also be developed to delve into the norms, getting it rightattitudes and behaviours, guiding members’ attitudesand behaviours with regard to the aforementioned Naomi Stanford’s book Organisation Culture:definition. The questions should be asked of a random Getting it right (The Economist, 2010) providessample of the organisation (or part of it that is under a concise guide for managers, analysing how tostudy). It is likely to generate a surprising variety of harness the power of culture, how to understandanswers, but several common themes will emerge. an organisation’s culture and how to harmonise it with a business strategy.current cultural influences Complete with advice on how to avoid commonThe next step is to look at what should be kept and mistakes while making cultural changes and onwhy, and what should be shaped or changed and why. maintaining a healthy culture in the long term,Then look at what is currently shaping the culture. the book includes real-life examples from suchOften it is performance measures, reward systems, job major and diverse companies as IKEA, Google anddesigns, work flows and other infrastructure elements Procter & Gamble.that form boundaries. Much as the choice of suitcaseshapes packing strategies and the amount of stuff Offer details: HR Society members can receive athat can be fitted in, so changing the infrastructure 20% discount (RRP £12.99). Telephone or emailchanges the possibilities. Emily Orford at Profile Books (020 7841 6300/ A change of culture is not an overnight switch. John and quoteChambers is in his seventh year of changing Cisco’s “Organisation culture – HR & Business offer”.culture. Lou Gerstner took a similar amount of timeat IBM, and Alan Mullally at Ford is in his fourthyear “with a long way to go”. These leaders recognisedthat they could label the culture they aspired to, butthat getting to it takes patience, persistence and adetailed understanding of social and infrastructurenuances, complexities and relationships.Naomi runs a popular Essentials session on OrganisationalDesign for HR Society members every summer. Detailswill be available closer to the time at h r&Business / novemBer 2010 9
  10. 10. Shift workforce planning into a higher gear Creativity and innovation are essential as organisations adapt to the economic downturn. george blair shows how a fresh approach to staffing can bring productivity dividends. m any organisations adopt a Jeremy The traditional approach to an economic downturn Clarkson-style attitude to workforce is to focus on reducing staff costs by such means as planning: they just put their foot down freezing vacant posts. This weakens organisations, and hope for the best. It is a no-nonsense as these are often the very posts where competition approach that can feel quite appealing. In reality, for talent is strongest. In addition, the workforce’s however, using the careful planning and teamwork of average length of service creeps up, which can mean a Formula One racing team will win the top place on that innovation is likely to be in short supply when it the podium. is required the most; the current way of doing things This is because improving productivity and is likely to be seen as best. Yet doing more of the same innovation is central to workforce planning when will only give you more of the same. suitably supported by a regular inflow of fresh talent, as well as a culture of questioning and continuous use the downturn productively improvement. Successful workforce planning is A downturn is the time, and opportunity, to find ways therefore positioned at the crossroads between of doing things differently. For example, workforce operations, finance and human resources. planning can reduce staff costs while introducing fresh blood by encouraging part-time working and sabbaticals, although this needs to be approved on a case-by-case basis, so that it does not adversely affect the organisation. It is also a great time to recruit George Blair is managing consultant of Shared graduate interns because managers can ensure they Solutions Consulting. He has extensive consultancy can make a valuable contribution to the organisation experience in the UK and overseas, including before offering them a permanent position. Eastern Europe, Africa and the Middle East. He is This has been used to great effect in the past joint author of two books on organisational change, couple of years when many unions have negotiated and often speaks at conferences and workshops to pay sacrifices to preserve jobs. For example, BA pilots senior managers and postgraduate students. He has worked for a month without pay, while the financial been an expert witness to the House of Commons services firm KPMG introduced flexible working Health Select Committee and adviser to the King’s with a maximum reduction in base salary capped at Fund in workforce planning and development. 20% per individual. Nearly 80% of KPMG’s 11,000 Email: UK staff applied to work a four-day week or take extended unpaid leave.10
  11. 11. workforce plaNNiNg“Freezing vacant posts Questions to address means innovation can be during a recession in short supply when it Workforce demand • How could you increase the is required the most.” • Which activities should staff stop number of secondments within doing, or do less often, because your organisation and with your they add little value? suppliers? • Which activities should be kept in-house and which should be Productivity contracted out? • What traditional customs and practices should you challenge? Workforce supply • What could you learn from other Business performance can be improved by • Could you reduce your workforce industries?matching staff composition by age, gender and numbers through the offer of • Do you measure quality from aethnicity more closely to customers. One building part-time working arrangements customer perspective?society found that their most successful staff were the and sabbaticals that may prove to • Could you gain more businessolder ones who were closer in age to many of their be attractive to some members by targeting customers whocustomers. So why do more car dealers not go out of staff? are trading down and thereforeof their way to recruit and train more female service • Could you benefit from using increasing your earnings permanagers, given the proportion of women who make interns so that you are sure of employee?car-buying decisions yet who may feel patronised, or staff before you appoint them? • How could the use of IT and theeven bullied, by male-dominated sales staff? • What benefits would you see if web be maximised to reduce your workforce better reflected costs and improve your servicesbeware of burnout your customer profile? to customers?Many employers attempt to improve productivityby reducing headcount, while expecting the sameoutputs. However, this usually leads to poor-qualityservice and outputs from demoralised staff because > h r&Business / novemBer 2010 11
  12. 12. “ Reduce the time staff reduce the quality of thinking, because concentration is interrupted to check the latest missive pinging into spend on activities that do the inbox. Advise staff on the use of emails and, if appropriate, implement email-free periods. not add value to customers Map out processes or the organisation.” It is a good idea to map out processes and procedures to see if they could be done with fewer steps. Another source of waste is the poor layout of workplaces, which causes staff to walk about needlessly. This can be rectified by mapping where staff go and then relocating facilities. Budget airlines improved productivity by squeezing extra flying time from > they have to cut corners and risk burnout from their expensive aircraft by using unnumbered seating working longer hours. The resulting loss of business to reduce passenger boarding times. There are no can easily outweigh any gains from staff costs. doubt long-standing customs and practices in all A much better approach is to eliminate waste. organisations that could be questioned. This is done by reviewing how staff spend their time Creativity makes all the difference to improving and eliminating or reducing the amount of time productivity, so it is important to focus on new spent on activities that do not add value to customers revenue opportunities rather than just cost reduction. or the organisation. Process engineering becomes A recession is a great opportunity for low-price a core tool here. Question how much time is spent operators to attract more upmarket customers by answering emails, many of which may be of little enhancing their offering. Thus, McDonald’s attracted importance. Equally, a constant stream of emails can Starbucks customers by introducing lower-cost Workforce planning in action Wendy Hirsh, independent Workforce planners think about costs as well as heads. The consultant and researcher and ‘less’ is often really less money. It is vital to know what different member of the Hr society groups of people cost (not just their salary but full cost) and to be able to track savings as workforce changes are implemented. This Like many others with practical means having people and jobs well coded by type and level of experience of workforce planning, I work, matched to financial data. see it more as a mindset than a set of On the workforce supply side, we think about skills as well as particular techniques. So faced with numbers of people. This is about the right mix of job types and an organisation seeking to ‘do more also about having the people who possess the right skills for with less’, how might a workforce those jobs. Planning in terms of job families and key specialist planner’s mind run? Four issues skills can be more illuminating than planning by business unit or come immediately to mind. cost centre alone. First, we need to ask what the ‘doing more’ is really about. Is Workforce planners always see the short-term against the ‘more’ about quality, such as reducing manufacturing waste? Is it longer-term backcloth. We seek to ‘do more with less’ in a way process efficiency rather than volume, like reducing waiting times that positions the business more strongly for the future, in in the NHS? Or is ‘more’ really about higher levels of productivity terms of the quality and demography of the workforce. This has and activity, for example teaching more students in higher implications for recruitment (keeping some going, especially education with fewer lecturers? Sometimes we need to identify of younger people) and for leavers (managing voluntary which work is central and cut out tasks that add little value. severance with care).12
  13. 13. workforce plaNNiNgFairtrade coffee. This increased income and profit per net Working eventsmember of staff. Seeing old problems through new eyes can be HR Society eventsencouraged by creating secondments either withinthe organisation or with suppliers. This is particularly essentials seriesimportant for staff who have been in the same job for employmentmany years. demographicsuse the web Managing consultant at Shared SolutionsIT can be either a financial drain or a source of Consulting, George Blair, runs regular sessionsbusiness advantage, depending on how well it works on the landscape of employment in globalin practice. A well thought out website can reduce the businesses for the HR Society.number of telesales staff needed to answer queries, as These sessions address themes such as futurewell as administrative costs. For example, customers employee age profiles, classes and locations,of courier companies can track the progress of their labour market statistics, skills and learningconsignments over the web. Those who can see their organisations.purchase records on the web are also more likely to Each session is tailored to the needs anduse it for repeat orders. challnenges of attendees. Innovation often comes from copying Details: For news of the next session, visit www.organisations in quite different industries. That is, and click on the events section.why so many different organisations have copiedAmazon’s facility that shows customers what others Masterclasswith the same purchasing habits have bought. Having the right key performance indicators for Workforce planningemployees is also essential. Call centre operations Professor Andrew Mayo runs regular sessions onoften get this wrong. They encourage staff to workforce planning for all HR practitioners whomaximise the number of phone calls they answer by need to work with resource planning, especially HRminimising call duration. This is a great way to lose business partners and planning specialists. Theycustomers, who often need to call again to get what provide the business case for effective workforcethey want. This contrasts with the likes of telephone planning, and offer practical tips for the mostbanking company First Direct, which has a loyal effective approaches. The workshops are illustratedcustomer base because its staff focus on meeting by practical exercises and case studies. Participantscustomer needs, regardless of time taken. Thus, at can take away a workbook to apply to their ownleast one performance indicator should measure organisations.quality from a customer point of view. Details: For news of the next session, visit www., and click on the events section.contracting outAnother consideration is to review which functionsto keep in-house and which to contract out. Thisshould be based on demonstrable advantages drawnfrom detailed analysis, not wishful thinking. Forinstance, some NHS hospitals have contracted outtheir non-urgent pathology tests to highly automated,commercial laboratories with low marginal costs. A successful HR function needs to be heavilyengaged in improving productivity and never moreso than during a recession. Workforce planning is theway to achieve this by engaging operational staff at alllevels in creative approaches to how work is done. h r&Business / novemBer 2010 13
  14. 14. engineering aprocess changeProcess engineering is a different way of analysing business activities that can bring radicalchange and enable businesses to achieve far more with far less, says kees van Haperen. i n the current political and economic climate, Process engineering is a different way of analysing public and commercial organisations are forced to businesses that can bring radical change and improve achieve greater value for money. The traditional overall business performance. Often, the need for view is that this should be achieved through change in a business is triggered by the introduction cost reduction and productivity improvement. Yet a of new ideas, prolonged growth or the need for more powerful argument can be made for taking a sustainable development. less linear approach and a more holistic view of the Today’s business environments are more complex way organisations operate. It makes more sense to and uncertain than ever. Decision makers must cope look at what organisations should be doing, rather with a rapid pace of change while making sense of than concentrating on what they are doing. HR messy challenges. Organisations often fail to embrace departments control many processes that consume a holistic approach for fear of undertaking too much their time and that of managers, so process engineering and losing sight of what needs to be achieved. is a key skill for them. They have as much a part to However, a better understanding of organisational play in seeking organisational efficiency as anyone systems and processes can help to create different and need to analyse all their processes. ways of working and exploit the full potential of the organisation’s information. improving processes For today’s organisations to sustain, or even deliver, Kees van Haperen is managing director of Koios higher performance over time they need to ensure Group Ltd a consultancy specialising in strategy, that business processes become more mature. change and programme/project management. Michael Hammer, one of the founders of the theory Koios Group is a member of the CMC Partnership of business process engineering, says organisations consortium for the Buying Solutions Management should consider this process of maturity holistically Consultancy and Accounting Services framework and according to two important interdependent agreement. He has been a member of the HR characteristics: process enablers (aspects such Society Council since 2006. as design, performers, owner, infrastructure and Email: metrics) and enterprise capabilities (leadership, culture, expertise and governance). Although it could14
  15. 15. proceSS eNgiNeeriNgbe argued that his concept is arbitrary, his analysis There are, however, significant problems with thismodel gives a good insight of the intricacies of type of approach. Although it works well in tacklingtackling organisational improvement. difficulties, when applied to complexity it results in We work in systems all the time – our work, unintended consequences, creating vicious circles ofhome, social life and hobbies are all related to various ever-more complex rules and frameworks. In turn,systems that all interact with each other at some this could exacerbate the problems and lead to distruststage. The concept of process engineering offers ways and miscomprehension within an organisation. Itto improve the systems within organisations, as well could even result in a decline in the legitimacy of theas to look across organisational boundaries into the process and decision making itself.wider environment. However, working in systemsis not a linear activity: step two does not necessarily thinking in systemsfollow step one. Complex situations tend to be characterised by a high degree of uncertainty. The existence of significantlywell-oiled machines? different perspectives on the problems at handTraditionally, organisational and management contribute to this uncertainty. In such circumstances,scientists have seen organisational systems merely as change becomes piecemeal and evolutionary becausecomplicated machines. In other words, organisations, there is little agreement on the nature of the problem,economies and even societies behave in a linear let alone the most appropriate solution. Furthermore,manner, with outcomes directly related to input. causality is indeterminate and many factors areTherefore, organisational behaviour is predictable. interconnected or even interdependent.Since this behaviour can be understood, it can be In this context, ‘systems thinking’ adopts a differenteffectively controlled by well-designed external strategy to simplifying problems. Rather thaninterventions. This view is based on facts derived breaking down problems into smaller componentsfrom objective dispassionate observations from a that can be analysed, it goes up a level of abstractionsingle external position by policy makers. Thus, it is and discards some of the detail. This means that inappropriate and efficient to separate organisational analysing organisational issues, connections betweendesign from actual implementation. Moreover, the components of problems can be maintained.if the diagnosis is correct the remedy will be The late Russ Ackoff stressed that a ‘system’ is astraightforward. whole consisting of two or more parts that satisfies > h r&Business / novemBer 2010 15
  16. 16. > five conditions: the whole has one or more defining To give some tangible shape to such organisational properties or functions; each part in the set can affect wisdom, the principles of one particular systems- the behaviour or properties of the whole; each of thinking approach can be used: soft systems these parts is necessary but insufficient for carrying methodology (SSM). SSM is a structured way out a defining function; the way that each part of the to establish a learning system for investigating system affects its behaviour or properties depends on complex messy problems. It aims to improve areas (the behaviour or properties of ) at least one other of concern by activating continuous learning in the part of the system; and the effect of any subset of people involved in the situation. Learning takes essential parts on the system as a whole depends on place through the iterative process of using systems the behaviour of at least one other such subset. concepts to reflect upon and debate perceptions of the real world, then take action and again reflect on Soft systems methodology what is happening using systems concepts. In brief, a system is a whole that cannot be divided This reflection and debate is structured by a into independent parts without the loss of its essential number of systemic models. It is important not to properties or functions. When the performances lose sight of the fact that these models are holistic, of the parts of a system, considered separately, are idealised types of certain aspects of the problem improved, the performance of the whole may not situation rather than accounts of it. As a matter of be (and usually is not) improved. In fact, the system fact, these SSM-derived models become analysis may function less well, or even be destroyed. frameworks that address a variety of organisational problem dimensions. At this stage, it is important to understand that the focus of the enquiry is on what the organisation is or ought to be about and not how it operates. “Don’t waste a good crisis” the process perspective Embracing the process perspective makes it much Dr Mark Pegg, director of the Leadership easier to investigate the detailed functioning of the Centre at Ashridge business school and organisation and to scrutinise its activities. This is member of the Hr society described as the perspective of ‘how’ the organisation The strength and depth of the credit crunch does what it ought to be doing. To enable this, it is means everyone is doing more with less. For necessary to adhere to a few important principles. In the private sector, the change has taken place the recent past, some of these principles have been over the past couple of years, so this is now incorporated into the ‘lean systems’ approach made business as usual. The public sector tends to famous by Toyota. lag behind because of the way spending plans First, a process has a starting point and an end work, so it is only just embracing the idea. point. The process could also have a defined owner, Our advice is to ‘never waste a good crisis’. If you think you can get group of actors or users and should convey a purpose where you want to go just by squeezing more productivity out of the or desired outcome and comprise some form of system, you will be disappointed. You need to take the opportunity for a decision making. There should be rules that govern major redesign of how you provide services. Risk aversion has to be put the standard or quality of inputs throughout the aside and you have to innovate. process, alongside a recognition that the process If you want a radical solution, you need to build radical into the system under review is usually linked or connected to and think differently about how you do things. other processes. In using the process frameworks Spot your innovators and look after your mavericks. In the past, they to identify and analyse issues, one should consider a may have been too radical and they needed to be managed. Now they range of questions including: whether the activity is need to be given more freedom because they can make a real difference. being done and how; who is doing it; what the issues Sort out the people at the top. If your leaders don’t do radical things, are; and what could be improved. how can you expect the organisation as a whole to do them? You need While answering such questions, the process a new kind of leader who can let go and trust people to do more and to review should attempt to count how many steps are build ideas. In this crisis, power needs to be devolved. involved, whether there are hands-off handovers and You also need to encourage boundary-less behaviour. The temptation how many. Total process timings should be addressed is to dig in and focus on your own priorities, but we need to work better while capturing the approximate time taken for each together through sharing and collaboration. step and between steps. The investigation should identify whether there are queues or waiting lists,16
  17. 17. proceSS eNgiNeeriNgor whether ‘parallel processes’ could be identified.These tend to be the main causes of delay – commonexamples are administrative processes involving such net Working eventthings as letters, records, and so on. HR Society eventunderstanding variationLast, but not least, when work takes place in singleplaces, such places may become ‘bottlenecks’. essentials series‘Queues’ (for example, waiting lists or cancellations) Process engineeringcan occur because demand exceeds capacity, or thereis a mismatch between the variations in periodic Kees van Haperen brings more than 15 years ofdemand and periodic capacity. experience in organisational analysis, risk, crisis Systems thinking and lean process approaches and business continuity consultancy roles to thisencourage a better understanding of the variation that session on systems and process concepts foroccurs in all processes. It is particularly important for improving organisational performance.managers to understand the causes of variation in a The session aims to introduce a differentprocess if they wish to predict its behaviour and act way of thinking and of analysing businesses,to improve it. As variation is intrinsic in all process, covering topics including systems thinking, theimproved processes will exhibit reduced variation difference between a process and a system,as output becomes more predictable and costs are matching capacity and demand, and thelowered. However, it should be understood that benefits of process mapping. A range of toolswithout knowledge of variation, managers may well, and techniques used to design and improvewith the very best intentions, take action that actually organisations will also be reviewed.makes things worse. Date: 7 December 2010, 10am-4.30pm Location: One Whitehall Place, Londonbarriers to change Fee: £320 (& VAT) for members; £395 (& VAT)It should be noted there is often a breakdown in for non-members.communication between groups or departments, To book: inhibits process performance. Such societies-activities/essentials-seriesbreakdowns pose significant challenges to themanagement of change or process improvementinitiatives. In fact, success will largely depend upondiscovering and analysing these disconnects. It is alsoprudent to highlight that successful organisationalchange requires senior management involvementand support. Organisational change specialist JohnKotter explains that transformations often failbecause firms fail to maintain a sense of urgency forchange. They may suffer from the lack of an alignedleadership coalition or an unclear vision/strategy thatengages employees all levels. Experience has shown that problems occur atinterfaces between organisational units. This is oftendue to a lack of understanding between units or to gains, quality improvements, organic capabilitydiffering opinions about objectives held by members improvements and lasting changes to organisationalof different organisational units. The result may be culture. Additional benefits could be realised throughthat no one has a complete picture of how the end- the capture and distribution of detailed processto-end chain of activities in a single process actually knowledge among geographically dispersed, with managers tending to concentrate on In an information context, process maps could betheir areas of responsibility without considering the used to determine the impact of an organisation’seffect on the total operation of the process or the information resource on the major operating scenariossystem as a whole. of the enterprise and to provide an implementation- The potential benefits of a process view can independent specification for human systembe measured in terms of cost savings, schedule interactions. h r&Business / novemBer 2010 17
  18. 18. recession brings radical thinking Research has revealed that organisations have been responding creatively to the recession, using new strategies that should stand them in good stead for the future, says Peter reilly. r esearch from the Institute of Employment had responded, whether their strategies were different Studies (IES) shows that organisations and whether such initiatives might have longer-term responded to the recession by developing beneficial impacts on employment relations. These new strategies that should have beneficial case study organisations were chosen because they long-term impacts. had implemented innovative cost-saving programmes The 2009 recession resulted in a sharp drop in in an attempt to minimise headcount reductions. The economic activity that was greater than that seen in IES also looked at existing literature on the use of the previous two recessions. But perhaps less widely cost-saving measures during the recession, aimed at known is the fact that employment fell by much helping organisations think through their responses less than during the previous recessions. During to business change. the downturn of the early 1990s, companies quickly downsized to contain labour costs. This time, it clinging on to key personnel appears they have responded differently. Four broad themes emerged from the research, During the last quarter of 2009, the IES visited Learning from the downturn: key messages from four organisations – KPMG, Jaguar Land Rover, an employer perspective (2010): retaining skilled Norton Rose and the BBC – to find out how they employees in preparation for recovery; recognising employee engagement would be affected during any change; protecting the employer brand image; and minimising the hidden costs of redundancies. First, organisations seemed to have been keen, Peter Reilly is the director of research and when choosing their cost-saving approaches, to consultancy at the Institute for Employment Studies. retain key staff in preparation for recovery. Having He joined IES in 1995 after 16 years with Shell where won these employees in the war for talent, they were he held various HR posts. At the Institute he leads its not going to let them go easily. In previous downturns work on the HR function and significantly contributes vital skills, such as in IT, had been lost thanks to the to the Reward and Performance Management theme. use of crude ‘slash and burn’ tactics that had no regard He has given consultancy support to organisations on for protecting scarce capabilities or future needs. issues in this area and is a regular speaker. This time, companies seemed to operate on the basis Email: of expecting a V-shaped recession and so put more thought into workforce planning.18
  19. 19. reSearch Second, the research showed evidence of greater the organisation, only to be hiring others in another awareness that a badly conducted downsizing exercise part. Previous downturns had also demonstrated that could have an adverse effect on the employees left it takes considerable time to recruit the right quality behind. The development of employee engagement candidate once the market improves and the new has been a more explicit aim of organisations who people also have to be fully trained and inducted, believe it leads to better organisational performance. which leads to more time and expense. employer brand image five main strategies Third, how an organisation handles cost savings also The IES research shows there have been five main has an impact on its brand image and employee value routes to putting these four goals into practice: pay proposition. Organisations did not want to be sullied reduction exercises; flexible working practices; paying by the way they were perceived to have handled their attention to people processes; developing a strategic response to the recession. Some even seem to have approach to business decisions; and fostering a sought to enhance their employer brand in the way ‘shared destiny’. they handled change. To illustrate how widespread the pay-focused Finally, in the 1990s, companies became aware approach was, a survey of 1,600 UK workers, of the enormous hidden costs associated with conducted by Keep Britain Working in the summer redundancies. Some of this expense arose from the of 2009, showed 54% had experienced a pay cut, left hand not knowing what the right hand was a reduction in hours or a loss of benefits since the doing – for example, laying off staff in one part of recession began. A 2009 survey report published by the Towers Perrin consultancy (now Towers Watson), called Cost-cutting strategies in the downturn – a delicate balancing act, also found that the most common cost-cutting approach was a salary freeze. However, the extent to which salary freezes in the private sector over the duration of the recession have“ Organisations did not want to really been absolute ‘freezes’ has to be questioned. Incremental and developmental pay increases, hot be sullied by the way they were skill payments for professional staff, and pay increases and bonuses for high performers all seem to have perceived to have handled their continued to operate in the absence of a general pay award. The use of other cost-saving strategies, such response to the recession.” as overtime restrictions, has reduced levels of total earnings for employees at some companies. > h r&Business / novemBer 2010 19
  20. 20. the external presentation of the company brand and“ Sceptics may say companies reputation. Therefore many employers have been focusing on more intangible factors, such as timely have made temporary changes communication and promoting honesty and trust within the organisation. They have been especially but business as usual will careful to recognise that fairness in change processes and the demonstration of ‘procedural justice’ is resume after the recession.” important to secure the support and understanding of ‘winners’ and ‘losers’ in the workforce. Strategic decision making Another key message to emerge was that any cost- saving strategy beyond compulsory redundancy has to address the key enablers of business performance to make it effective in avoiding headcount reductions. This requires an organisation-wide perspective and has a number of dimensions: focusing on the long > implementing flexible working practices term as well as the short; targeting the cost pressures Throughout the recession, there has been a greater faced in different areas of the organisation, rather use of temporal flexibility (that is, varying working than adopting a blanket set of measures; seeing issues hours to achieve a more effective deployment of from a corporate not business unit viewpoint; and labour to meet business requirements) to help avoid not allowing narrow, sectional interests to prevail. headcount reductions. Employers have implemented Actions have to be anticipatory and based on flexible working patterns, such as flexible working considering ideas from, and consulting with, a range weeks, short-time working and reduced hours to of stakeholders about responding to present and temporarily reduce time inputs. future pressures. The process requires corporate According to joint Chartered Institute of Personnel endorsement of local action, but not simply the and Development (CIPD) and KPMG research, spreading of equal pain everywhere. Rather it is Labour market outlook, in February 2009 some 19% targeted action to deal with specific cost/income of companies were making greater use of flexible imbalances. This allows the organisation to protect working during the recession. Four months later, investments in business areas that are critical to its the CBI’s Employment trends 2009 - Work patterns long-term strategy, such as research and development in the recession found that more than two-thirds of and marketing. Cost savings in these areas can reduce organisations had increased flexible working or were a company’s ability to capitalise on new demand considering doing so. Two of the case studies IES when growth returns. used for its research showed an increased appetite for flexible working among employees. fostering a shared destiny approach An important theme emerging from the IES case attention to people processes studies that flowed from sensitivity on employee The research evidence also suggests that employers engagement was a determined attempt to create have made efforts to maintain employee engagement a sense of a ‘shared destiny’ in facing business during the downturn, in the belief that engaged problems. For example, cost-saving measures were employees keep companies afloat during the hard often launched among the most senior staff before times, and help them recover and thrive when staff on lower grades. Salary freezes were applied business activity levels rise. to executives as well as employees. Job cuts did not Employers have also recognised that the way affect only one group of staff, such as those at the in which they manage the workforce during the bottom of the pay ladder. downturn affects not only the wellbeing and One way in which shared destiny was emphasised productivity of the remaining employees, but also was by involving employees in making the tough 20
  21. 21. reSearchdecisions over how to bring about savings. Just net Working eventunder half of the respondents to the Towers Perrinsurvey actively brought their workforce into the HR Society eventproblem-solving process during the downturn. Thisis in keeping with the trend for increasing employeeinvolvement in business processes, which can drive research briefingengagement and help to build a two-way collaborative What have we learnedworking relationship. about change duringwill co-operation survive? recession and cuts?Sceptics will dismiss many of these researchresults as pretty ephemeral. They will believe that Led by Peter Reilly, director of research andcompanies will have made some temporary changes consultancy at the Institute for Employmentto get through the hard times but business as usual Studies, this session will describe the Institute’swill resume after the recession. Thus this mutual research on HR issues with regard to howapproach to flexible working will disappear as organisations faced the recession. Themes to beemployees will push for more scope for adjustment discussed include how lessons learned might beon their terms and employers will respond to greater applicable to the public sector, which practicesdemand by sweating their assets to the maximum and strategies will survive and whether businessesdegree possible. will just return to their normal routines. Cynics will suggest that some of the ‘solutions’ Date: 17 January 2011, 2pm-4.30pmto resourcing problems highlighted by the research, Location: One Whitehall Place, Londonespecially those involving working time, are all very Fee: £190 (& VAT) for members; £275 (& VAT)well for professional services firms, but are no use in for non-members.manufacturing and retail. The preoccupation with the To book: brand goes with the same territory – some events/83might see it as nothing more than window dressing. More reflective commentary has also suggestedthat there will be a pay-back for the wage restraintthat employees have accepted as part of the recession.Trade unions will insist on making up lost groundonce the profits begin to flow and/or the labourmarket tightens. Even those not covered by collectiveagreements will seek to exploit their market position,especially as the new, leaner organisations may bemore vulnerable to unexpected resignations.May i have some more?There are also fears that the cost-cutting measures for dealing with an unexpected worsening of thewill not stretch far enough if there is a double-dip business situation or else their well-intentionedrecession. One case study had already experienced efforts will fail.the challenge that actions taken in good faith had This research suggests that organisationsproved to be inadequate. The HR director described approached the 2009 recession with a planninggoing back to the employees “Oliver Twist-like, to orientation and a desire to protect their people assetsask for more”. in a way that they might have not done before. They Under these circumstances, it is hard to retain have been innovative and engaging in the way theyemployee engagement. Uncertainty, especially, leads have sought to retain and motivate their workforce,to deteriorating morale. So those organisations that but there are still challenges to face as the UK hasare trying to avoid redundancy need to have strategies not yet returned to a sound economic footing. h r&Business / novemBer 2010 21
  22. 22. forwarD thiNkiNg Public sector cutshave finally been revealed.Departments have had time toconsider their options, but plentyof planning is still needed. Andrew Mayo, president of the HR Society, mulls over the impact of the Comprehensive Spending Review for HR professionals within the public sector t he Gershon report (2004) was one of many past to job and organisation redesign. One of Ulrich’s original key efforts to reduce inefficiencies in the civil service. roles for business partners was that of change agent. This means He introduced the concept of productive time – more than dealing with individual people issues in the course defined as time spent delivering front line services. of change – professional organisation development practitioners This is of course a variation of the direct vs indirect ratios should be expert in all aspects of change. that have their origins in manufacturing. And there is much more for HR to contribute. Undoubtedly In the present scenario, it could not be more relevant, as leaders need new skills. For the past 15 years the task of leading governments seek to maintain as many services as possible in public services has always been challenging, but it has been a with reduced resources. It is indeed a key ratio in workforce period of rising expenditure. We know from the private sector planning; which should always start with the resource that few leaders are effective in both downsizing and in times of needed for front line activities and then work backwards by growth. So attention must be paid to leadership effectiveness, and ratios to different lines of support. Those ratios will need to change in the coming months. When it comes to HR, it is more important “ There is a risk that redundancies than ever that they are closely supporting the operational strategy and business needs of absorb HR attention, but the need for public departments. They will have plenty to do regarding redundancies, but there is a risk that close business partnerships is key.” this becomes all-absorbing. The need for close business partnership – supporting operational managers in their objectives – is paramount. the challenges of maintaining engagement in tough times. This We can start with systematic workforce planning. Each is a time also when HR should sharpen up its expertise on return business scenario must be analysed for the resources needed on investment of programmes and initiatives: they will all need and balanced with the supply available – knowing that to show a viable outcome and the often woolly and soft objectives recruitment will be a politically undesirable activity (even if that have sufficed in the past will not be acceptable. Indeed the sometimes inescapable). Although many public organisations whole arena of measurement in HR relating key people measures paid attention to this in recent years, few developed robust to performance will have a greater significance. long term methodologies. The availability of finance seems This is a demanding agenda for HR professionals, and will to call the tune, whereas the resources needed to deliver an involve knowledge and skills that will be new to many of them. outcome should. Compromise may be necessary but at least Prior to the spending review training and consultancy were as one knows the price that will be paid for it in non-delivery. good as banned in most departments. There is no doubt help will Clearly productivity initiatives and process re-engineering be required in the coming months and it should be sought and should be at the forefront of change. Expertise in these areas used wisely. in a civil service environment is limited. We would argue they are very much areas for involvement for HR. It will lead Email: andrew.mayo@mayolearning.com22
  23. 23. See more clearlyThe mission of the HR Society is to leadthinking and share good practice in thelinking of people, planning and productivity.In so doing, we provide a forum for seniorprofessionals working in these areas.We meet our mission by:• building a network of members involved in the business edge of people issues• organising topical events with leading speakers for debate and discussion• offering educational masterclasses, seminars and workshops• holding joint meetings with other professional societies dedicated to the support of organisations• facilitating and distilling research• developing, publicising and disseminating relevant knowledge.Find out more about the Society, its activities and membership at: