REIMAGINING THE COMPANY FOR NEW REALITIES: THE MCGRAW-HILL COMPANIES

Transcription

1 REIMAGINING THE COMPANY FOR NEW REALITIES: THE MCGRAW-HILL COMPANIES Marianne Gattinella, Sheila O Neill, Maryellen Valaitis April 1, 2014 This presentation is the property of McGraw Hill Financial and is only intended for use at the HRPS conference

2 Agenda Change Environment and Overview of Leaning into the Perfect Storm Creating the New Companies Building McGraw-Hill Education 2.0 The McGraw Hill Financial Transformation Fast-Tracking the Evolution of HR Strategy and Operating Model Lessons Learned and the Path Forward

3 Transition During a Period of Dramatic Industry Changes Rise of digital content / technology breakthroughs Post 2008 financial crisis landscape Personalized and adaptive education Expansion of global regulations Global opportunities and competition

4 Sep 11 Overview of Leaning into the Perfect Storm Disruptive Change MHE Spin / Sale MHFI Transformation Enablers and Outcomes New realties required change, kicked off a Growth & Value Plan with the goals to: Separate McGraw-Hill Education; gain efficiencies; and reduce costs through $100M savings including outsourcing in HR, Finance and Technology functions Begin MHFI Transformation into two separate and distinct companies; select strategic outsource providers Evolve the HR strategy and operating model with a focus on Structure, Leadership and Talent What s Ahead It was a perfect storm...but the sun, moon, and the stars were all aligned 4

5 MHFI $4.8B in revenue Minimal capital requirements, substantial cash flow 17,000 global employees 29 countries Growth Leader in ratings, benchmarks and analytics THE JOURNEY OF MCGRAW-HILL Post Separation $175m GVP savings MHE $2B in revenue Learning Solutions Company Strong balance sheet / low debt ratio 5,400 global employees 40 countries Growing Leader in digital learning, Pure play Ed Tech Partners in HR, Finance and Technology Technology Driven, Results Focused MHFI only MHE only 5

6 Creating the New Companies

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8 MHE is Responding to the New Realities Education Market Today In the midst of transformation, driven by increasing: U.S. K-12: A blended world driven to increase student success and college readiness. The New McGraw-Hill Education Pure Play in Ed Tech Private equity ownership C-Suite changes Acceleration of digital capabilities U.S. Higher Education: Focus on controlling costs, preserving access, and improving time to degree. Globally: Focus on cost effective methods of providing instructional access.

9 Pure Play in Education Technology We are a leading global provider educational materials and learning solutions with content, tools and services delivered via digital, print and hybrid solutions. We are at the forefront of developing and enabling a new model of personalized and dynamic digital instruction delivered in a highly interactive and adaptive environment. Digital migration allows us to sell high value-add, interactive, adaptive learning solutions designed to significantly improve classroom outcomes.

10 Private Equity Ownership It s all about value Cash is king Time is money Use a long-term lens Have the right team in place Get skin in the game Select stretch goals

11 C-Suite Changes Initial requirement: Spin or sell MHE Buzz Waterhouse, CEO for 21 months Now requirement: Promote digital innovation, continued digital transformation and a customer focused, growth oriented culture in a fast paced, highly competitive environment. David Levin, CEO joining April 2014 Impact on organization Subsequent senior leadership changes Culture shift Evolving expectations

12 Acceleration of Digital Capabilities From Content Creator Publisher Seller of Materials Published & Done US Centric Institutional & Faculty Focused Best Efforts To Learning Object Creator Course Developer Trusted Collaborator Analytically Driven Global Solutions Provider Customer Centric (Student, Parent, Educator, Institution) Operational Excellence MHE will create sustained value by moving up the value chain and becoming a digital educational solutions company.

13 McGraw Hill Financial is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets 13

14 MHFI is Responding to the New Realities Capital & Commodity Markets Today Bank deleveraging shifts to capital markets driving debt issuance Capital markets growth in emerging countries Investors require real-time data and analytics Assets shift to index-related investing Daily price assessments deliver transparency to commodities Regulation increases The New McGraw Hill Financial Active Management Faster Growth, Higher Performance Focus on Leadership and Talent

15 Moving Toward Active Management Holding Company MHP MHF + MHE Strategy & Oversight MHFI Current State Active Management MHFI Future State Clarify Business Unit and Corporate Center roles for effectiveness Implement new management processes to drive performance Facilitate the transfer of knowledge, best practices and innovation

16 Clarity Enables Accountability Corporate Center Shared Accountability Business Unit

17 Faster Growth, Higher Performance A Growth Company Opportunity to Refresh & Reset Must Take the Bar Up on Performance A People Powered Business Our #1 Investment Literally! Knowledge & Talent Drives Growth Leader s Growing Leaders Playing as a Team

18 Focus on Leadership and Talent - Leadership - Newly appointed CEO Business Unit leadership streamlined Redefined Executive Committee Enterprise-level functional leadership Common leadership attributes Leadership assessments and succession planning Vision A talent magnet with knowledge leaders who drive insight and provide essential intelligence - Talent- Acquire and develop the best talent Motivate with career growth and incentives Drive and reinforce high standards

19 Fast-Tracking the Evolution of HR Strategy and Operating Model

20 Fast-Tracking MHFI HR: The Opportunity Driving the Human Capital Strategy Business Strategy drives talent priorities and capabilities Demand management Aggressive self-service model Technology platforms determine process design Consolidated Centers of Expertise & Aligned HR Business Partners New HR competency models and talent assessments Investment in HR data & analytics Leadership Framework: Competencies for a growth company global collaborative customer focused digital accountable outward looking talent developer Strategic Partners for HR Service Delivery Global shared services Talent Acquisition partners SaaS technology solutions

21 Fast-Tracking MHE HR: The Opportunity Driving the Human Capital Strategy Investing in the right HR operating model & infrastructure Model streamlined under private equity ownership, leveraging HR talent across MHE Fixed to variable cost structure Aggressive self-service model Partnerships for building global capabilities Consolidating specialized skills Using new technologies and systems Making the tough talent calls Setting new HR competencies and holding people to them Building new teams Workforce planning & data analysis Workday reporting and analytics

22 Lessons Learned and the Path Forward Focus on change management Make HR innovation a way of life It is about the people: engagement, retention and moving forward Assess, select and develop the transformational leaders Stay ready for the next wave of challenge and opportunity

23 Questions & Answers