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HR Transformation at AstraZeneca

AstraZeneca has successfully completed the first stage of a global transformation of its HR function, resulting in increased efficiency, cost savings and an improved customer service. Supported by learning and development specialist Academee, AstraZeneca has adopted a centralised delivery model designed to guarantee high levels of service to its internal customers.

About AstraZeneca

AstraZeneca (AZ) is engaged in the research, development, manufacture and marketing of pharmaceutical products and has over 60,000 employees in 45 countries. Formed in April 1999 from the merger of Zeneca and Astra of Sweden, it now has manufacturing operations in 20 countries and major research centres in seven. In the UK, its main manufacturing sites are at Macclesfield and Bristol with research and development work carried out at facilities in Alderley Edge in Cheshire (where the HR transformation programme is centred) and Charnwood, near Loughborough. Sales and marketing is based in Luton and the corporate head office is in central London.

The challenge

HR services at AZ had traditionally been delivered through a number of site and functionally-based teams that offered a full range of generalist support. A company-wide drive to focus the business on its core activities of researching, making and developing and selling pharmaceutical products meant the spotlight fell on HR and other business support functions to see how they could realise value - both in terms of real cost savings and in terms of improved customer service.

There was a general consensus among senior HR managers that the generalist model was not delivering. Although not immediately obvious to service users, the limits of the structure undermined the high-quality service that HR wanted to provide to all its internal customers. As a result, staff across the company often had different service experiences. With HR people spread out across the country, there was a lack of consistency in how issues were dealt with and the benefits that could flow from common ways of working, shared technology and resources were lacking. There was too much reliance on goodwill, networking and paper-based communication. It was also unrealistic to expect HR generalists to master the intricacies of an increasingly complex portfolio of HR activities. Focus groups and 'current state analysis' through questionnaires completed by managers confirmed the belief that the delivery model was outdated.

'One team' approach

Extensive external benchmarking had also indicated that, in terms of HR delivery, AZ required a major step change to create a more focused, service oriented and consistent HR platform in tune with the needs of an increasingly global organisation. A 'one team' approach based around an HR service centre acting as a single point of contact for dealing with HR enquiries and transactional activities was to be the core of the new model, supplemented by teams of HR specialists and strategically based HR business partners. Academee helped ensure that the 'one team' message permeated all learning and communications activities across HR.

The business case

The promise of improved levels of service to customers at a lower cost convinced senior management to sign off the plans. A 15 per cent cost reduction in service delivery over 3.5 years and a fall in the number of HR staff by 15 per cent is intended to payback by 2006 the £5 million investment necessary to implement the new HR platform. Cost savings are firmly linked to improvements in service quality.

Support for the HR transformation came from the highest levels of the company. The sponsoring group of senior managers included the company's chief financial officer in the UK and senior staff from other support services, including information systems, finance and purchasing.

A change management approach

Over the course of 2003, work was undertaken on establishing customers' experiences and requirements, mapping and redesigning around 150 high-level HR processes, setting out detailed operating procedures and standards for each area, undertaking organisational design - including the new job roles - and establishing and testing the new service centre technology.

Managing the transformation

Malcolm Hurrell, VP HR UK, actively led the transformation programme, together with the UK services leadership team and all key HR managers.

Academee was selected as a partner for organisational and capability development following a competitive tender process in mid 2003.

To help give the project impetus, programme director Kath Yates was recruited externally, and Academee reported to her through the capability work stream leader, Steve Munro. Kath brought skills in complex change management and facilitated a planned and disciplined approach to the transformation, ensuring the programme was completed on time and to budget.

The capability development programme

Academee began by diagnosing current levels of capability and wider organisational issues which enabled them to focus on areas of greatest benefit for AZ. They helped to define a 'supply and demand' model so the business got the service levels it needed, when it needed them, through improved forecasting and resource management.

They facilitated a start-up workshop with the UK leadership team to help the team focus on a shared vision, goals and strategy. Academee then led team development workshops for this team and other key management teams across HR. Directors, team leaders and managers were provided with an ongoing coaching service as they led teams through the transformation process, bookable online via Academee's CoachingZone.

Academee also carried out an extensive learning needs analysis, which enabled them to design an extensive programme of learning and development to support the transformation. Development plans for all HR people addressed individual and group development priorities.

'Team start-up workshops' also helped existing and new teams alike to make sense of their new objectives and processes and to accelerate team performance.

Throughout HR, Academee helped develop increased business acumen in order to generate a shift in mindset towards 'me as a businessperson first, HR person second.' Academee delivered this through workshops on business mastery, understanding AZ as a customer and financial awareness.

A comprehensive programme of customer orientation was delivered to three key groups of people:

• At leadership and business partner level - to manage customer relationships across the whole of HR
• At HR line manager level and at HR team member level - to manage excellent service delivery
• At team member level - to deliver customer service excellence both face to face and by telephone.

Another key aspect of capability for business partners and specialist partners is consulting and partnering and Academee and AZ designed a development programme consisting of three key elements:

• PACE (Partnering & Consulting Excellence) workshops - challenging and highly experiential events, supported by 360 degree feedback and action learning
• Change management skills
• Project management skills.

With the introduction of new IT and telephony systems, technical capability also became paramount. Academee helped coordinate the training for new HR systems to help ensure a return on AZ's significant investment in new software.

In addition, Academee provided project management support for the entire capability development work stream throughout the transformation.

On a global scale, Academee participated in AZ's task force with Sweden and the USA to coordinate a consistent approach to capability development across the key regions, particularly in the area of business partner development.

HR launch event

In January 2004, Academee facilitated a one day event to officially launch the transformed HR organisation to all staff and business sponsors. The event, held off-site, helped to enthuse, engage and motivate all participants through a combination of presentations, workshops, fun sketches and enjoyable interactive activities such as drumming workshops.

Communicating the key messages

A far-reaching programme of communications kept HR and its customers up to date on progress. Extensive implementation plans, including 'Meet HR' sessions were organised in the run up to the changes as each phase of the new services was launched.

Particular efforts were made to involve HR staff in the change process. While the transition took place, it had to be business as usual so far as the service to customers was concerned and it was therefore important that the morale of HR staff was maintained.

Academee helped to get the buy-in of all HR employees with 'Engage' workshops. A packaged version of 'Engage' was also created for HR's internal customers. These workshops were run by HR people to explain the future vision and the need for change to line managers. They helped to gain commitment and understanding from these customers.

Area implementation teams

As each area of the business prepared to transfer over to the new HR arrangements, they were assigned an area implementation team, which included both HR staff and customers. Academee facilitated a launch event for the area implementation teams and helped to design training materials for the teams to use throughout the business. The work of these teams was a great success: customers were increasingly reassured, and also educated in how to best interact with the new HR service and to use hr.connect to become more self-sufficient in key areas of people management.

Reassuring internal customers

There was some concern among potential customers about the proposed delivery model. A reluctance to give up the convenience of face-to-face contact with staff 'down the corridor' providing a reactive service were accompanied by concerns that contacting hr.connect would involve being kept in a call centre queuing system. HR sought to offer some reassurance by stressing that at the core of the new approach was a new delivery mindset which was very customer-oriented, and that new metrics would allow customers to judge the levels of service offered. Face-to-face contact remained available if customers felt they needed it.

hr.connect and hr.consult

There are two main elements to the new HR model: hr.connect and hr.consult:

hr.connect

hr.connect has been described as the engine room of the new HR delivery service. Located at the heart of AZ operations in Alderley Edge, the HR service centre deals with all first-level HR queries and transactional and administrative activities.

Employees can contact hr.connect by telephone, email or letter. Over 80% of all queries are resolved by the hr.connect team. Any unresolved issues are passed to a HR specialist.

hr.consult

Specialist services are grouped together under hr.consult, which comprises teams of HR specialists and HR business partners. hr.consult focuses specifically on core areas of HR work and to develop expert, market leading knowledge and activity in these areas, in line with business objectives'.

HR specialists

HR specialists offer line managers strategic advice, support and product and policy development in the areas of employment, reward, staffing and learning and development.

HR business partners

Under the new arrangements, HR business partners are now based in each of the company's businesses and work closely with management teams on:

• team and people management and development plans
• people strategies aligned with key business targets and plans
• talent management
• capability planning and resource forecasting
• co-ordination of multiple HR services from specialist groups (see above) to address specific organisational issues.
• change management support.

HR business partners and other specialist strategic partners particularly benefited from the programme designed to increase overall partnering and forecasting skills, previously mentioned, so that they can engage strategically with their area of the business.

Adapting to the new skill sets

AZ has created a new structure to fully realise the benefits of the new HR model, and appointed people with the skills to carry out redefined roles. In some cases, the required skill sets - particularly where HR specialist roles were being created (in recruitment/staffing for example) - were not available internally, so around 25 per cent of staff in the new HR organisation are external recruits. The overall headcount in HR is now 134 compared to 160 before the changes. Around a third of the previous HR staff have left the company or been redeployed.

Academee has supported this adaptation through the capability programme described above.

One team, one location

Since December 2004, most HR staff have been based in a single office location in Alderley Edge, Cheshire. Academee's support was vital in developing a new, more open approach to team working in this new environment. This move was fundamental to breaking down barriers between HR staff and has cemented the 'one team' aspiration, helping to make the transformation complete.

What has helped to make this project successful?

• It has been managed as a key value-adding business project
• It was a structured intervention
• It invested in developing individuals and teams
• It engaged with the team delivering the change and with customers
• It benchmarked itself against other organisations
• It pushed the boundaries
• It demonstrated that HR is a key part of the business
• It benefited from Academee's independent facilitation, experience of organisational transformation and employee engagement and its training and development expertise.

The benefits

• The project is on track to achieve a 15 per cent cost reduction in service delivery and a fall in the number of HR staff by 15 per cent by 2006. This will recoup the original £5 million investment.
• The business case has been signed off as being on track to achieve targets by the original business sponsors responsible for the programme.
• The use of HR metrics has helped demonstrate to the businesses the value of what HR does, for example, increased productivity, increased customer satisfaction and reduced costs per employee.
• Currently, over 83 per cent of calls are answered by the HR service centre within ten seconds and 80 per cent of queries are resolved first time (exceeding the original target of 65 per cent).
• Other business support services within AZ are now considering adopting similar models to the HR delivery model.
• The fundamental rationale behind the programme - to create a more efficient and customer oriented delivery of HR services by getting the right customer oriented mindset across HR combined with the specific skills to manage customer interactions both at strategic and transformational levels - has become a reality.
• The 'one team' approach has brought together everyone involved in HR delivery and there is a great sense of team working, improved communication, a much more consultative approach and a customer-focused culture.
• HR is now in line with organisational strategy and is a value adding part of the business, contributing to the bottom line.
• The programme was completed on time and to budget.

Future plans

Subsequent to successfully supporting this programme, Academee now works extensively with other parts of AZ, and following an rigorous selection process, has recently been appointed a preferred supplier of learning and development services in several key categories including change management, leadership, management skills, team development and elearning.

PACE has also been adopted and rolled out in other business services including purchasing, communications and facilities management.

For the future, the company is keen to grow the 'one team' aspiration. AZ is looking to add value by increasingly joining up its HR units in its three main business hubs - UK, Sweden and the USA . With the businesses and teams operating globally, the support services too will have to deliver on the same basis, with shared experiences across the hubs, alignment of work processes, consistent delivery and branding. The aim is to bring standardisation and efficiency to processes and systems with a global HR data platform.

The tremendous success of the HR transformation programme in the UK has uncovered many possibilities for similar projects both in HR and beyond.