HR.com: Donna Hastings has over 20 years´ experience developing and leading the implementation of projects in the areas of organizational effectiveness, strategic planning, performance management, education and training, leadership development and succession planning. Donna has served in the capacity of consultant as well as director inside the organization in implementing large-scale change initiatives.
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Donna, could you begin by giving us a bit of background about SCI and your role there?
DH: Service Corporation International is the largest provider of funeral, cemetery and cremation services in North America. We have a little over 1,500 firms that are company owned and 170 franchise firms. We have just about 20,000 employees in North America, with about $1.7 billion in revenues.
I´d like to talk about our history because it gives a good foundation for some of the things that we have been able to accomplish in the last few years. SCI was founded in 1962 by R.L. Waltrip. Mr. Waltrip had one funeral home in Houston, Texas. He had the vision of being the largest owner of funeral homes in the world. The company grew through acquisition to 4,000 locations in nine countries by 1999. The industry ran into problems in the late 90´s when capital markets disappeared. Coming from an acquisition model, the company was heavily in debt. The strategy for the company changed drastically to one of internal growth. The company´s international operations and ancillary business were sold. The focus for the company moved from acquisition to growing our existing businesses. A new management strategy was put into place along with the introduction of the industry´s first brand, Dignity Memorial. SCI moved from a decentralized to a centralized structure standardizing policies, processes and systems. In 2004 a new CEO and senior management team was put in place to lead the company.
Along with the changes that were going on in the company came a new vision. One of the key elements of the vision was a "best-in-class" workforce. We are very much a high touch service industry where we focus on helping people at a very difficult time in their lives. Having the best people on the front line doing that was a key part of the strategy. As an HR team we were challenged with making this a reality.
HR.com: The decision was made at SCI to automate all your human capital processes and you wanted them all to be tightly linked with training and development, especially the performance management process. What would you describe as the main forces behind that decision and who were the people involved in finalizing that decision?
DH: We knew to achieve that goal we had to look at this challenge holistically.
Recruiting alone wouldn´t work if we didn´t have the right career and growth opportunities to retain the best. While we believe we have the best training in the industry, training alone wouldn´t be enough to drive the level of performance we needed. Performance management would give us the tools, but it had to be aligned with the vision and business strategy to make a difference. It had to be driven down throughout the organization and without development it wouldn´t have the impact we needed. Talent reviews alone would simply be viewed as a way of selecting out and perceived as punitive without development strategies in place to grow people.
We knew instinctively that to achieve our goal, we had to do it all and that development had to be the driver.
HR.com: You went on then to select a tool that was best for your organization. Could you speak to that?
DH: Once we knew what we wanted to do, we had to have the right tools. We have a very diverse and geographically dispersed workforce so technology was a key factor in what we needed to accomplish. We researched a number of Human Capital Systems. We wanted a system that provided the integration we were looking for and also would allow us to grow into it. Taking on an integrated solution is a multi-year process, but we didn´t want to purchase something before we were ready. We selected Integrated Performance Systems and the iPerform platform. It provided the LMS, PMS, and TMS functionality we needed with the ability to implement in a phased approach based on our timeline, which worked well for us.
HR.com: If you were to give advice to someone beginning the selection process are there any key tips you think would be of assistance?
DH: Our change management strategy started almost immediately. We have been very fortunate that our senior management team has seen the value in this process. They have been actively involved from day one. As we began our implementation, we started with our corporate university. Again, we felt strongly that for performance and talent management to take place development had to be the driver. So training came first. Our first phase of work was to launch our corporate university. An integral part of that was establishing the Dignity University Board of Directors. The DU Board is chaired by our CEO and co-chaired by our COO. Other members of the board include VPs in charge of our operating business units, corporate HR, and business support. Our SCI board of directors also requested that the board education be included under the same umbrella. Senior management buy-in and support was a critical part of our success and change strategy.
Although we implemented our human capital management processes in phases, we communicated the big picture early on. We conducted management webcasts and presented at quarterly meetings. When Dignity University was launched in July 2004 we conducted pep rallies both at the corporate office and in the field. A monthly newsletter was created to keep our managers and employees informed of our progress and what new functionality to expect. Although we implemented these things in stages, we communicated early the big picture. We didn´t want this to look like an HR flavor of the month. We wanted to communicate what we were really doing. Today we continue to provide on-going reporting, tracking and management follow-up.
HR.com: What ongoing processes did you put into place to ensure regular communication?
DH: In addition to senior management involvement, communication has been absolutely critical. We communicated our integrated approach to the top 200 managers. When Dignity University rolled out we made it fun. We had campus tours by our CEO, pep rallies, contests, and live and recorded webcasts for our managers and employees. Our senior management and HR teams incorporated the latest updates in daily, monthly and quarterly communications.
HR.com: I like the idea of pep rallies. Can you give us an idea of what one might look like?
DH: In our corporate office we set up laptops in one of our large conference spaces and we had on a projector our CEO doing a flash presentation that walked people through a campus tour. We gave away prizes and had games. We gave people a chance to sit down at a computer and have someone from the organizational development team show them how simple it was to get online. We had a great turnout. For our field locations, which are more difficult, we had a pep rally in a box. We sent instructions to managers on how to conduct their local pep rally. It was a lot of fun. It was important for us early on to make people see this as an opportunity for their own development but also as something that was fun.
HR.com: Dignity University was an important first step because of your focus on development. Could you speak a little further about that?
DH: With development our first focus, Dignity University was an important first step. Our goal was to develop job-specific curriculum tied to competencies for every job function in the company. The online campus offered a blended curriculum with three levels of certification to be achieved. The coursework for some positions could take 18-24 months to complete. Some courses were mandatory and reports were distributed electronically followed up by management. The message became pretty clear early on that this was important. All training in the company was centralized and under the Dignity University umbrella. The intuitiveness of the system greatly helped in early acceptance.
HR.com: How did you ensure goal alignment with business objectives?
DH: With Dignity University up and running our OD staff began work on our performance management processes and system. The company had never had a standardized performance appraisal process. We developed our processes and implemented the system to our top 200 managers. Based on our corporate strategy, we worked closely with our senior management team to cascade goals/objectives down through several layers of management both at corporate and in the field. Starting with our executives, 2005 goals were established and using the PerformanceLink process and 2004 performance reviews were conducted with our top 200 managers.
HR.com: Did you have any processes in place to indicate if you were not meeting your objectives or were going off track?
DH: The HR team met individually with managers and direct reports the first time out. They also assisted in reviewing development plans and followed up to ensure the plans were completed. Development plans and action steps were reviewed in quarterly review meetings along with financial performance.
HR.com: How did you shape the message you gave to employees around this change?
DH: We conducted manager webcasts and manager briefings at corporate with HR follow-up meetings. It was important for our managers to see that this wasn´t just some new HR initiative and something else for them to do in already overloaded schedules. It was how they were going to be measured going forward. So by integrating it into something they were doing already like quarterly reviews, it became a new way to do it rather than something else to do. We also linked a 50% incentive compensation component to the achievement of performance and developmental objectives in the corporate office with plans to extend that to our field management in 2006. Our plan is to use 2006 as the year to institutionalize our performance management processes. We found that managers weren´t as good as they needed to be in writing objectives and conducting timely reviews and follow up. Before taking it to the next level, we want to make sure this group is proficient.
HR.com: What did you base your performance objectives on?
DH: We used the balanced scorecard. Each person has performance objectives in each of the scorecard categories. In addition to performance objectives they have developmental objectives that come from 360 feedback (leadership competencies) and longer-term objectives that come from our talent review process. The year-end review process also includes core competencies. They are reviewed not only on what they´ve been able to accomplish but how as well. Achieving performance objectives while leaving bodies in the wake is not acceptable.
Also, in 2005 we are implementing our talent management system (TalentLink). Again, the system will provide the vehicle for managing and reporting the data (personal profiles, 360 data, PerformanceLink data). We will be conducting both functional and executive level talent reviews for both talent pool selection and succession.
HR.com: What areas of human capital process did you feel were best to start with and do you feel that there is a logical progression when integrating previously siloed processes?
DH: We started with the company vision and strategy as the anchor. Everything ties back to why we are doing this. It´s not just an HR initiative. The purpose is to align our strategy with our people. You can´t execute otherwise. We´ve identified the organizational capabilities and competencies required to execute and made it the foundation for our processes and systems. Secondly, development is the focus. Our people want to get better and training is at the core of what we do. Next is senior management ownership. I truly believe it can´t be done without it. After that I´d say it was having an integrated solution from the start. We can easily connect the dots so people understand why we were doing what we were doing. As we rolled out the next phase it wasn´t just another initiative of the day but another step in the process. Next we selected the technology that worked for us. It provided the functionality and the flexibility to allow us to go at our own pace. The system´s intuitiveness made acceptance easy. Lastly, we never stop communicating. In fact, on occasion, we´ve been accused of communicating too much. To me that´s a compliment.
HR.com: What benefits have you achieved?
DH: 15,000 employees actively using Dignity University in less than a year. The acceptance of Dignity University has been astounding. Two hundred plus leaders are experiencing the process first. They´ve participated in 360 assessments/feedback session, goal setting, performance reviews and now talent reviews. They have personal development plans for the first time in their careers with the company. We´re implementing executive development programs, things like action learning projects and executive coaching for the first time. I think it says something about how the company views them when they see that this really is about their success. Through our integrated system we are able to align our goals, messages and report on metrics. By year-end we will have our first real picture of our talent bench using objective data to evaluate along with development strategies for growing our leadership talent.
HR.com: Do you have any lessons learned along the way that you could share?
DH: Senior management buy-in and active participation is a must. Without it, I don´t believe you can succeed.
Have an integrated, big picture strategy and phase it in over time. People know where you are going, but give the organization time to assimilate it.
Build in accountability at every step. Otherwise you will have weak processes that don´t get results.
Focus on development. When you implement performance and talent management processes, people are usually skeptical at first. When they see you really focused on their development that skepticism goes away.
Go slow - institutionalize every step even if it means adjusting your timeline.
Set expectations early that we won´t be perfect the first time out of the gate. We had senior managers question the process because they felt we wouldn´t be able to implement it.
Continue to raise the bar, learn from both successes and failures. And consistently communicate. After a while people realize this is not the flavor of the month and this is a way of life. You´ll always have resistors to any change, but once you build the momentum they either get on board or go away.
HR.com: What are your plans for the future?
DH: Our plans for the future are simple. We want to continue to refine our processes. By no means are we there yet. We have a lot of work to do to refine and institutionalize what we´ve started. We also want to drive performance and talent management down to the front-line managers. That´s where the rubber meets the road. It´s fairly simple to get 200 people doing what you want. Our next group is 2,000 strong. Eventually we want our performance management processes down to each employee. That will be a bit more challenging. We want to expand external recruiting and internal job postings in our talent management system. We will obviously identify gaps and always have the need to recruit new people into the organization as well as give employees the opportunity to advance their careers. We also want to do a better job of linking incentive compensation to performance. We are firm believers that people do what you pay them to do. Lastly, we´ll never stop communicating. We want our employees to know what´s going on and that we are an email or phone call away.