Thu, 04-Dec-2008
Back to basics
Published: Jan 01, 2008
Heading a joint-venture company between two large telcos means that head of human resources Asia Pacific, Georgie Anthony Chunkath has to start from scratch on everything HR.
The rumours started circulating in early 2006 that the telecommunication industry had started hush-hush talks over the possibility of merger of network giants.
In April that same year, French-based Alcatel bought out Lucent from American telco, AT&T to form Alcatel-Lucent. Ericsson had also announced its buy-out of British firm Marconi a few months earlier. It became increasingly apparent to those working in the industry that to stay in the game, you would need bulk.
At the time Georgie Anthony Chunkath, who was managing the HR function for Nokia’s mobile devices and telecommunications across Southeast Asia and South Asia, says he heard speculation about the mergers back then, but he never expected he would be heading the newly formed Nokia Siemens Networks (NSN).
When the news that Nokia and Siemens were about to merge their network business was broken by the management teams of the respective companies, in the last week of June 2006, Chunkath who is NSN’s head of HR for Asia Pacific, says he was in the dark about Siemens’ work culture or the way they ran the company.
“At Nokia, we had little interaction with Siemens. While we had a few common elements, such as being a large conglomerate, I only found after the merger that they were actually one of the largest private sector employers in the world,” Chunkath says.
Despite the fact that Chunkath would not know for another three months that he would be heading the HR NSN team, Chunkath quickly got back to work. The management teams of both companies had a set target of 10 to 15% reduction in staff, and this meant that Chunkath had to manage the concern among employees.
Describing the employee’s reactions to the announcement, Chunkath says their initial apprehension over the merger’s impact was about their job security.
“The second reaction employees had was, ‘In this merger, would I get the position that I want to get?’ As each of the employees have their own career aspirations, employees wanted to know if those aspirations would be able to be fulfilled through this merger,” he says.
After the announcements were made on the global management level, smaller town hall meetings were conducted at a regional and company level. In it, local management team members helped address pressing issues such as the rationale for the merger, the implications and what the future bodes for the industry. Chunkath says that HR leaders were represented alongside the regional management team in order to help address issues that were close to the heart of employees. Issues that employees raised were along the lines of job security, career development opportunities, compensation and benefits and new policies and processes which may be put in place in the future.
One key issue in some countries such as Indonesia and Thailand that emerged was pension schemes. While Nokia had a vested pension scheme, Siemens had built their pension withdrawals into their retention scheme.
Essentially, Chunkath says, not one employee was worst off than what they were before the merger. “The philosophy we had was that nobody should be worst off after the merger. Keeping that in mind, if someone is losing a particular benefit, it will be compensated somehow.
Chunkath says the local management was always open and honest with employees – even on difficult topics such as restructuring.
“We told employees: ‘Yes we would be restructuring in certain places where there are duplications of roles’. We were also very transparent in how we carried out that restructuring as well,” says Chunkath.
Get together and open up
When NSN emerged as a legal entity on the 1st of April 2007, Chunkath found himself in charge of over 7,000 employees across all locations Asia Pacific with the exception of China. The 50:50 joint-venture dealt in the business functions of radio access, service core and applications, operation support systems, broadband access, IP/transport, and services.
Merging two conglomerates is not an easy feat, admits Chunkath, especially when both companies have equally long and outstanding histories.
To make employees feel like they were part of one company meant that NSN had to start building a new office culture from scratch. NSN also ensured that the company bore no resemblance of either parent company. Even the physical infrastructure was not spared as the new office layout was decked out in the new company’s colours.
Physical structures aside, the culture of NSN also had to be built from scratch. Describing culture as an important differentiator between companies, Chunkath says without a sense of company culture, it would be less effective in retaining workers. “If you think if you take competitive compensation structure as a basic given, the next critical differentiating factor between companies is their culture. Whether an employee decides to stay or leave the company, the primary decision is based on the company’s culture and values.”
Chunkath said the company did not want a top-down directive on the company’s new values. Instead, it looked towards the employees by creating a 72-hour online discussion channel. Titled “Values Jam”, employees over the world debated with their fellow colleagues and senior management on the values which their companies should adopt.
Once the Values Jam was completed, it helped crystallise the five company values of: Inspire, Focus on Customer, Win Together, Innovate and Communicate Openly.
Chunkath found the Values Jam was instrumental in helping change the mindsets of both ex-Siemens and Nokia employees who were not initially comfortable with the change in company. While each company had common elements such as its focus on the customer, there
were differences in people issues due to each company’s long histories, for instance Siemens was slightly more formal and hierarchal in nature compared to Nokia. However, changing the mindsets of the employees from both sides was a considerable challenge.
“This is where the Values Jam discussion comes into play, where people are openly debating the positive and negative aspects of a company culture as well as discussing what things needs to be changed,” Chunkath said.
While the Values Jam was a one-off event, the HR team followed it up with a scheme called the Peoples Choice award, which rewards employees who have shown attributes that best relate to the given core values. The winner who is then selected as the “Value Ambassador” later undertakes the responsibility of explaining the values to new employees.
In addition to that, the company found that being open and transparent in its dealings was also important as a new company.
To do so, the company flattened the hierarchy structure – with a maximum of five to six rungs between the top global executive of a function and the lowest employee. According to Chunkath, this was done in order to facilitate communication as well as empower employees when it comes to decision –making, especially since many of the employee’s line managers did not sit in the same office as each other. “Employees are empowered to make decisions along the hierarchy. Unless a person is making a wrong decision ethically, no one is going to question just because a person made a mistake. This helps empower our employees.”
Facilitating communication also meant that NSN opted to do away with all offices. Employees, and even the regional head of NSN, would sit in an open office space. “So you don’t have to formally set up a meeting and get into someone’s office to have a quick discussion. The open space has helped improves openness and communication between people.”
Dropping out
Although Chunkath wasn’t expecting an easy road ahead in the joint-venture, he did admit that the problem of attrition was one that grew larger than he had initially expected it to be. Although NSN was expecting a certain amount of attrition, certain functions in countries such as India saw people dropping out at a rate of 30% for certain functions. People were dropping out due to concerns over their job security and the career development, says Chunkath.
Once the employee organisational structure of company was defined, team managers were encouraged to meet and communicate with their subordinates to sketch out their job scopes and to communicate the vision and strategy of the company. “Once that communication started going down, people had a much better understanding of the direction the company is taking.” However, to establish the line of communication was tricky, with subordinates sitting in different countries other than their own, which saw NSN establishing its own virtual communications network.
Another action step that NSN took was to conduct a monthly pulse survey since June 2007 which measures how the employees were grappling with change at a grassroots level. A task force was set up in Asia Pacific using a cross-section of the various business functions to analyse the issues that cropped up among employees. The team, which comprised of people in marketing, the business excellence team, human resources and communications was set up at the sub-regional and country levels, and would produce specific action plans that aimed to deal with those issues. It would then be followed up with weekly Wednesday telephone meetings where the task force would discuss the progress of the action plans.
“As a result of that, our latest survey results which we received in November showed that we have made very significant progress in terms of employees’ perception of the company change,” Chunkath says.
Starting from scratch
It is easy for HR practitioners to take automated HR processes such as incentive payment tools for granted. But those processes and tools are in the midst of being developed for the new company. Hence, the 90-strong Asia Pacific HR team has to go back to basics and work everything out on a manual basis.
“It used to be relatively easy to get simple things like the headcount in different countries or different functions with the click of the button. But today, such processes have to be compiled manually because we do not have a common database or the tools which enable us to do so,” Chunkath says.
Developing such tools will be one of the many things that Chunkath plans to work on. Within the first half of this year, Chunkath’s focus will revolve around building a common information database, benefits and incentives system for the company for the Asia Pacific region.
In the meantime, Chunkath says that the past months since the official inception of the company have been the most challenging. Describing each day as a new challenge, Chunkath feels as though he has been building up NSN’s HR functions from scratch.
“Afterall, it’s almost like starting up a new company.”
The rumours started circulating in early 2006 that the telecommunication industry had started hush-hush talks over the possibility of merger of network giants.
In April that same year, French-based Alcatel bought out Lucent from American telco, AT&T to form Alcatel-Lucent. Ericsson had also announced its buy-out of British firm Marconi a few months earlier. It became increasingly apparent to those working in the industry that to stay in the game, you would need bulk.
At the time Georgie Anthony Chunkath, who was managing the HR function for Nokia’s mobile devices and telecommunications across Southeast Asia and South Asia, says he heard speculation about the mergers back then, but he never expected he would be heading the newly formed Nokia Siemens Networks (NSN).
When the news that Nokia and Siemens were about to merge their network business was broken by the management teams of the respective companies, in the last week of June 2006, Chunkath who is NSN’s head of HR for Asia Pacific, says he was in the dark about Siemens’ work culture or the way they ran the company.
“At Nokia, we had little interaction with Siemens. While we had a few common elements, such as being a large conglomerate, I only found after the merger that they were actually one of the largest private sector employers in the world,” Chunkath says.
Despite the fact that Chunkath would not know for another three months that he would be heading the HR NSN team, Chunkath quickly got back to work. The management teams of both companies had a set target of 10 to 15% reduction in staff, and this meant that Chunkath had to manage the concern among employees.
Describing the employee’s reactions to the announcement, Chunkath says their initial apprehension over the merger’s impact was about their job security.
“The second reaction employees had was, ‘In this merger, would I get the position that I want to get?’ As each of the employees have their own career aspirations, employees wanted to know if those aspirations would be able to be fulfilled through this merger,” he says.
After the announcements were made on the global management level, smaller town hall meetings were conducted at a regional and company level. In it, local management team members helped address pressing issues such as the rationale for the merger, the implications and what the future bodes for the industry. Chunkath says that HR leaders were represented alongside the regional management team in order to help address issues that were close to the heart of employees. Issues that employees raised were along the lines of job security, career development opportunities, compensation and benefits and new policies and processes which may be put in place in the future.
One key issue in some countries such as Indonesia and Thailand that emerged was pension schemes. While Nokia had a vested pension scheme, Siemens had built their pension withdrawals into their retention scheme.
Essentially, Chunkath says, not one employee was worst off than what they were before the merger. “The philosophy we had was that nobody should be worst off after the merger. Keeping that in mind, if someone is losing a particular benefit, it will be compensated somehow.
Chunkath says the local management was always open and honest with employees – even on difficult topics such as restructuring.
“We told employees: ‘Yes we would be restructuring in certain places where there are duplications of roles’. We were also very transparent in how we carried out that restructuring as well,” says Chunkath.
Get together and open up
When NSN emerged as a legal entity on the 1st of April 2007, Chunkath found himself in charge of over 7,000 employees across all locations Asia Pacific with the exception of China. The 50:50 joint-venture dealt in the business functions of radio access, service core and applications, operation support systems, broadband access, IP/transport, and services.
Merging two conglomerates is not an easy feat, admits Chunkath, especially when both companies have equally long and outstanding histories.
To make employees feel like they were part of one company meant that NSN had to start building a new office culture from scratch. NSN also ensured that the company bore no resemblance of either parent company. Even the physical infrastructure was not spared as the new office layout was decked out in the new company’s colours.
Physical structures aside, the culture of NSN also had to be built from scratch. Describing culture as an important differentiator between companies, Chunkath says without a sense of company culture, it would be less effective in retaining workers. “If you think if you take competitive compensation structure as a basic given, the next critical differentiating factor between companies is their culture. Whether an employee decides to stay or leave the company, the primary decision is based on the company’s culture and values.”
Chunkath said the company did not want a top-down directive on the company’s new values. Instead, it looked towards the employees by creating a 72-hour online discussion channel. Titled “Values Jam”, employees over the world debated with their fellow colleagues and senior management on the values which their companies should adopt.
Once the Values Jam was completed, it helped crystallise the five company values of: Inspire, Focus on Customer, Win Together, Innovate and Communicate Openly.
Chunkath found the Values Jam was instrumental in helping change the mindsets of both ex-Siemens and Nokia employees who were not initially comfortable with the change in company. While each company had common elements such as its focus on the customer, there
were differences in people issues due to each company’s long histories, for instance Siemens was slightly more formal and hierarchal in nature compared to Nokia. However, changing the mindsets of the employees from both sides was a considerable challenge.
“This is where the Values Jam discussion comes into play, where people are openly debating the positive and negative aspects of a company culture as well as discussing what things needs to be changed,” Chunkath said.
While the Values Jam was a one-off event, the HR team followed it up with a scheme called the Peoples Choice award, which rewards employees who have shown attributes that best relate to the given core values. The winner who is then selected as the “Value Ambassador” later undertakes the responsibility of explaining the values to new employees.
In addition to that, the company found that being open and transparent in its dealings was also important as a new company.
To do so, the company flattened the hierarchy structure – with a maximum of five to six rungs between the top global executive of a function and the lowest employee. According to Chunkath, this was done in order to facilitate communication as well as empower employees when it comes to decision –making, especially since many of the employee’s line managers did not sit in the same office as each other. “Employees are empowered to make decisions along the hierarchy. Unless a person is making a wrong decision ethically, no one is going to question just because a person made a mistake. This helps empower our employees.”
Facilitating communication also meant that NSN opted to do away with all offices. Employees, and even the regional head of NSN, would sit in an open office space. “So you don’t have to formally set up a meeting and get into someone’s office to have a quick discussion. The open space has helped improves openness and communication between people.”
Dropping out
Although Chunkath wasn’t expecting an easy road ahead in the joint-venture, he did admit that the problem of attrition was one that grew larger than he had initially expected it to be. Although NSN was expecting a certain amount of attrition, certain functions in countries such as India saw people dropping out at a rate of 30% for certain functions. People were dropping out due to concerns over their job security and the career development, says Chunkath.
Once the employee organisational structure of company was defined, team managers were encouraged to meet and communicate with their subordinates to sketch out their job scopes and to communicate the vision and strategy of the company. “Once that communication started going down, people had a much better understanding of the direction the company is taking.” However, to establish the line of communication was tricky, with subordinates sitting in different countries other than their own, which saw NSN establishing its own virtual communications network.
Another action step that NSN took was to conduct a monthly pulse survey since June 2007 which measures how the employees were grappling with change at a grassroots level. A task force was set up in Asia Pacific using a cross-section of the various business functions to analyse the issues that cropped up among employees. The team, which comprised of people in marketing, the business excellence team, human resources and communications was set up at the sub-regional and country levels, and would produce specific action plans that aimed to deal with those issues. It would then be followed up with weekly Wednesday telephone meetings where the task force would discuss the progress of the action plans.
“As a result of that, our latest survey results which we received in November showed that we have made very significant progress in terms of employees’ perception of the company change,” Chunkath says.
Starting from scratch
It is easy for HR practitioners to take automated HR processes such as incentive payment tools for granted. But those processes and tools are in the midst of being developed for the new company. Hence, the 90-strong Asia Pacific HR team has to go back to basics and work everything out on a manual basis.
“It used to be relatively easy to get simple things like the headcount in different countries or different functions with the click of the button. But today, such processes have to be compiled manually because we do not have a common database or the tools which enable us to do so,” Chunkath says.
Developing such tools will be one of the many things that Chunkath plans to work on. Within the first half of this year, Chunkath’s focus will revolve around building a common information database, benefits and incentives system for the company for the Asia Pacific region.
In the meantime, Chunkath says that the past months since the official inception of the company have been the most challenging. Describing each day as a new challenge, Chunkath feels as though he has been building up NSN’s HR functions from scratch.
“Afterall, it’s almost like starting up a new company.”
