Case Study: Zegna. Transforming Zegna s culture whilst keeping their family values

Transcription

1 Case Study: Zegna Transforming Zegna s culture whilst keeping their family values

2 Background In 2000, luxury menswear company, Ermenegildo Zegna, took the unprecedented step of hiring Lynda Tyler-Cagni from outside the close-knit Italian fashion industry to implement a major change to its HR function. In turn, this supported a change to the entire direction of the company and proved highly successful. Zegna is a family-owned business with 7,500 employees and a 2006 turnover of million euro. However, in 2000, changes had prompted Zegna s senior management team to review the organisational culture, and in particular how effective that culture was in driving performance and a more customer-focused culture. There were two main catalysts for the review: a new generation of the Zegna family was now at the helm; and one of the company s ambitions was to be the most successful customer-focused business in the sector. A business built on family values Zegna recognised that the business had flourished since it was founded because of its strong family values. While it was accepted that change was necessary, the management team also made it very clear that the focus on performance and organisational culture must work in harmony with these values. Clearly, this presented a variety of challenges. A substantial proportion of the employee base had worked with Zegna for many years some almost their whole lives and for those individuals, it was very difficult to imagine the major step changes that were being proposed. Achieving an acceptable balance between good employee relations and the competitive/ commercial strength of the business would be the greatest challenge. Very early on in the process, the management team identified that the HR team would play a vital role in this change and that it would need to transform itself first if it were to help the company through the wider business transformation. 2

3 The brief Chief executive, Gildo Zegna, recruited an HR director with global experience to head up the change team. The appointment of Lynda Tyler- Cagni in 2000 was symbolic for two reasons: she was the only non-italian to have ever been invited onto the management team, and she had never before worked in the fashion industry, which in Italy in particular, was very close-knit and, at times, insular. Zegna was confident that she would bring a new insight and fresh perspective into the business. Thus, Lynda Tyler-Cagni was given full responsibility for transforming the company s HR team from a traditional transactional focused department into a strategic, businessfocused team - thus creating a model and an agent for organisation-wide change. She brought in transformation specialist, Jan Hills of Orion Partners, who had built up a wealth of experience working on major change programmes and experience directly relevant to the Zegna project. Together they had the full support of the senior team at Zegna and a strong directive to transform the HR function into a business partner and change agent. 3

4 The transformation process Aligning HR with business goals and needs If the HR function was to be the role model for organisation-wide change, the first stage of the process was to understand how HR was regarded by managers. What was the existing perception of HR within the organisation? What was needed for future development? Only when the team understood this could they define the strategy needed to implement change. The Ulrich model was used to obtain feedback from internal clients. They were interviewed to establish their understanding of what HR provided for them, and what changes they thought were required for the future development of the company, in particular the move towards a performance-and customerorientated culture. This survey not only facilitated a fact-finding process for the team, it also educated the managers themselves about how HR could help them. During the interviews, many productive discussions took place on how HR could become more strategic and work harder to fulfil business requirements. In essence, it was becoming clear to all involved that the HR function had a very real place in the company s future. At the end of the exercise, Jan and Lynda were able to clearly establish objectives and priorities from across the entire business for the HR function s transformation. This gave the team the clear brief they needed for the change plan. Four areas of change The transformation team identified the following four principle areas of change required: 1. Structural changes: how the HR team would need to be restructured to fulfil its new mandate. 2. Skill and attitudinal changes: each member of the HR team had to accept and embrace the changes so that they could be implemented successfully. 3. Education of the client: so that line managers could understand the value of organisational change and the strategic contribution HR could make as a business partner. 4. Polices and HR systems: in leading by example, the HR function had to begin to work differently with the line clients and get more involved in planning, training, coaching and new HR initiatives. 4

5 The transformation process Developing the HR team For the transformation from transactional to strategic to be successful, the acceptance and co-operation of the HR team across ten countries was essential. Jan and Lynda scheduled a workshop for the senior HR team which proved to be extremely important on two levels: it educated them about the proposed changes and generated buy -in from the outset; it also provided Lynda and Jan with valuable input from a group of highly experienced HR professionals. Using the feedback gathered from internal clients, they worked with the HR team to jointly construct a plan of action. This agreed the priorities and projects needed as well as the skills and competencies that were required individually, along with a development plan for each person. Twice-yearly workshops This workshop proved so successful that it became a regular feature. It is now held twice a year and continues to be used today as a measure of progression, development and capability within the HR function. The workshops include: Business planning Identifying new HR services and projects Identifying and filling skills gaps HR systems and processes Tracking, measurement and refinement of processes 5

6 Role models for change The original idea that organisational change had to start with the HR team was based on two key premises. The first was that the HR team would be able to not merely state that change was required, but also demonstrate those changes effectively to the rest of the business and show their true value. Secondly, if the HR team could focus on their skills and attitude and not just on structural or process changes, they would quickly become role models for change within the company. In line with the original objective of a move towards a more performance led culture, HR had to demonstrate performance and delivery as a priority. Demonstrating that HR could have an impact on sales and profitability was very valuable. Zegna achieved this by using Jan s tool (the success profile ) which identified the five or six critical beliefs that made the highestperforming sales people so successful within their roles. It answered the question: What did they do differently to others to exhibit such high achievement? Demonstrating the value of HR initiatives Once this was understood, a series of training programmes were developed. Following the training programmes, the HR team reported back on the impact and success that the training had generated. The results were impressive. For example, a training programme with factory supervisors produced a significant decrease in absenteeism. The programme in retail showed the annual sales increase achieved by those trained was between 17-27% higher than the control (i.e. those not receiving training). This clearly demonstrated to the line managers that the HR function was contributing in terms of performance and growth and that far from merely talking of changes, they were actively implementing them. 6

7 Dealing with obstacles As with any major change programme, it was expected that obstacles would be encountered along the way. In the case of Zegna, one regional CEO made it clear that he was not happy with the proposed changes. This proved incredibly challenging for the HR business partner assigned to him and she discovered it was necessary to demonstrate how the changes could add real business value, while at the same time be confident in challenging his views and addressing his concerns. In doing so, gradually the CEO began to respect her point of view and accepted that change was necessary. Moving from a transactional role to a strategic one is not an easy task for an HR team and that the acquisition of certain skills and beliefs will pave the way to success. These include: The ability to give positive and constructive feedback The confidence to make sound judgments Developing good coaching skills Being a good facilitator Remaining focused While the effects of much of the change programme could be anticipated, unexpected challenges also presented themselves. In the case of Zegna, a handful of HR business partners found that as their role became more strategic, they were expected to offer input into areas outside their remit. Jan recommended that, to combat this, the HR team clarify its role and responsibilities to the rest of the business; which was, to facilitate change, not implement it by themselves. A good example given was that HR has a duty to coach a line manager dealing with a difficult employee issue, but ultimately, it is down to the line manager to talk to the employee directly and resolve the issue satisfactorily. Transformation in the future Zegna continues to adapt its business model as the industry changes. Following the success of the 2000 change programme, Lynda remains as change leader with the HR team firmly at the forefront. In 2007, further changes were made, working again with Orion Partners. 7

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