WHILE IT might take many years to make lasting culture change stick, a high performance environment can be created more quickly with bold vision and actions, according to Sharon Davis, HR director for AMP Financial Services (AFS)
WHILE IT might take many years to make lasting culture change stick, a high performance environment can be created more quickly with bold vision and actions, according to Sharon Davis, HR director for AMP Financial Services (AFS).
Speaking about cultural change within the company at a recent Staff & Executive Resources CBD HR network event, Davis said that while taking a bold approach to culture change does create challenges, it was important to maintain resolve in any such initiatives.
“The challenge is that large change creates discomfort; it is a natural human response to uncertainty. It creates discomfort in leaders and employees,” she said.
“What we learned was to maintain our resolve, and to understand that if we weren’t experiencing discomfort then the size of the change really wasn’t significant enough.”
In AFS’ drive to create a high performance environment, characterised by greater individual accountability, more commercial acumen and slicker decision-making, she said two key HR levers for initiating change were creating a shared mindset and realigning structure and roles.
The shared mindset took the form of a story, she said, which explained why AFS needed to change, how it was going to do it and what it would feel like upon completion. “We were presented with a unique and compelling opportunity for change, which we called our ‘burning platform’, being the crisis in which AMP found itself.”
In order to create more accountability and a greater understanding of the business, AFS created 10 profit and loss statements in place of one, so that 10 directors now focus on driving business results and creating value. Additionally, decision-making was freed up by clearly pointing out where accountability lay and removing redundant governance structures such as a proliferation of steering committees which had built up over time.
All this was reinforced through performance and reward, Davis said, whereby AFS’ performance management system and short-term bonus program was dramatically changed to reward high performance and the behaviours that supported the new mindset.
The executive team also knew it had to change the business model to ensure the company’s future success, she said. “HR worked with the exec team early on to design the business model and to describe the culture they believed was required to support the new model, so there was a shared vision at the outset.”
A significant portion of executive team meetings were spent on people, leadership and culture, she said, while managing director Craig Dunn championed the change.
“Leaders are a critical ingredient in driving the change. We purposely took a very top-down directive style to our change given the difficulties the company was facing,” she said.
“The challenge this created was that we didn’t have the luxury of getting our leaders on board in consulting with them on the size and speed of the change and how we would go about it. Nonetheless, we were asking our top 100 leaders to drive it!”
In the process, Davis said, leaders must be provided with a lot of support and development, so that they can act in the new way and support the mindset shift.
As a result of the change, she said, the new business model is showing unprecedented operating margins, an increase in the net profit after tax per FTE and significant cost reductions.
Progress has been tracked every six months with employee surveys, which show an overall 20 per cent improvement.
She added that the level of business acumen has also dramatically improved along with low regretted turnover, so employees are enjoying the new environment.
“One of the most significant results of the high performance environment has been created by the new performance management system, where we are experiencing an enormous focus on the quality and frequency of performance conversations and in the level of development support and coaching provided by leaders,” she said.
The next phase of change would be led more from the bottom up, she said. “Now we have a strong foundation in place, employees and middle managers will have a role in bringing high performance to life in local teams.”
