„Change to Survive, Change to Win“Anna HudákováPresident of HR Association, Slovakia

Introduction Anna HudákováPresident HR Association, since 2003ConsultantCareer history: Historian: Eastern Slovakia Museum, History of SportAfter 1989: Sales Manager Coca Cola Amatil HR Director Cocal Cola Amatil HR Director for Czech and Slovak republics, Reemtsma, tobacco Chief HR Officer, Board member, Slovak Telekom

Business Challenges• global financial and economic crises• efficiency• proactivity• competition• fast changing environment• performance improvement• talent war / talent management• globalisation• creativity and preserving value• leadership

• downsizing• governance• risk• industrial relations• social partners• innovation and

technology• regulation• operation• strategy and growth• sustainability and

climate change

There is only one thing

constant in business...

CHANGE

Transition

Management

Relationship

Management

Negotiation and Conflict Resolution

Leadership and

Organizational

Development

Change

CHANGE MANAGEMENT

SATISFACTION/ COMPLACEMENT„This has nothing to do with me“

DENIAL/ REJECTION„Why change anyway?“

„I am already doing a good job“

ANGER/ RESISTANCE„I don´t believe in this“

„No one has explained why this is right“

ANGER„I disagree with what is happening“

I have another agenda“

COMMITMENT/ EXCITEMENT„I believe in this“

„I´m living and breathing it“

ENTHUSIASM/ HOPE„I´m making a difference“„I want to do this“ ACCEPTANCE/ CURIOSITY

„I´ve had my challenge to contribute“„I know my role in this“

„I´ve got the right tools to do it“

UNDERSTANDING/ AMBIVALENCE„I know why it´s happening“

„I´ve seen examples“AWARENESS„I have been told what this is“

The change curve

ANGER ENGAGED

8

Set the Change1. create a sense of urgency

2. pull together the Guiding Team – identification of powerful group

– opinion leaders, change ambassadors

Decide What To Do3. develop the change vision and strategy, clarify how future will be

different from past, how can you make that future a reality

Eight Step Process of Successful Change (Kotter)

Eight Step Process of Successful Change (Kotter)

02/04/2009

Author / Presentation title

9

Make it happen

4. communicate the understanding and buy-in-vision and strategy

acceptance and understanding

5. empowerment others to act – remove barriers

6. produce short term wins – create visible unambiouguous

success as soon as possible

7. don´t let up – press harder and faster after the first success

Make it stick

8. Create a new culture – hold on to the new ways of behaving and make sure they succeed until they become strong enough to replace old tradition

10

Eight Step Process of Successful Change (Kotter)

Steps After Realisation of Change

02/04/2009

Author / Presentation title

11

• Customers and Shareholders – handling of the reaction to change

• Thinking in Systems

• Big System Changes – Pluses and Minuses

Changes in Slovenské Telekomunikácie/ Slovak Telecom / Slovak Telekom in Years 2000 - 2008Strategic partner Deutsche Telecom – 51% share

Efficiency and productivity increase: Y 2000 – 12,345 employees Y 2002 – 8,075 employees Y 2004 – 5,659 employees Y 2006 – 4,016 employees Y 2008 – 3,704 employees

New strategy, vision, valuesNew products & services Liberalization of the telecommunications market, competitive environment,

fixed to mobile substitutionCustomer orientationNew strategy of marketing & salesNew telecommunications technologiesRebranding - new brand in 2004 and in 2006NGN implementationBroadband and IPTV

Main attribute: CHANGE

Reorganization & restructuring – from branches to centralized management

Transformation eNGine 2004 - 2006

Save for service 2008 - 2010

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Ongoing Transformation of ST A balanced mix of activities with impact on the top line and bottom line have to be accomplished in order to secure ST's transformation

Efficiency Improvement

Fault incidence Provisioning times Headcount reduction Automation Streamlining and

simplification

Innovation and growth

Top-line growth

Revenue stabilization Boosting broadband

penetration IT solutions Business solutions Broadband/NGN

implementation Network optimization Triple Play

Key targets of the transformation

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To change thinkingA challenge of changing our own view from “inside-out” to “outside-in”:- listen to the Voice Of the Customer (VOC) - translate VOC into our internal activities to align products, services, organization, procedures, people, communication … and remove non-value adding activities

To involve peopleA challenge of involving people in situation when they may not see any reason for a change. How to increase awareness of the need? Who to involve at the beginning and how to develop a network of people willing to cooperate? How to make the transformation meaningful for them? How to make it a part of their daily life?

To manage the scope of the programtransformation includes all areas of the business: how to integrate and simplify at the same time? How to ensure thorough execution of the projects and strategies? And, at the same time, to maintain and improve the market position, customers, financial results and the key people.

Three major challenges of ST transformation

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Culture Change Project Scope:

Communicate Vision, Mission, Strategy and ValuesDefine, communicate and implement general and specific ST-

wide customer behaviour and communication standards, to support the main strategic objective

Focused management development according to leadership principles

Define, communicate, standardize defined leadership principles

Identify Key Players (experts and managers) crucial for ST current and future performance

Implementation of Code principles through inter-active activities with Management & employees

Start-up the Performance Management system (payment for performance, rewarding for achievements)

Define key competencies and follow-up with focused development and retention plans active activities with

Management & employees

Define, communicate Code of ST employee

eNGine for PeopleMajor subprojects:

1. SUPPORT MANAGERS to perform transformation via enlargement of change management portfolio through training, workshops, consulting, different tools and leadership development

2. Consulting and SUPPORTING EMPLOYEES to become prepared for ST as NGO via introduction and communication of opportunities for new orientation in ST or outplacement, outsourcing and contracting externally and providing them with different targeted options and opportunities to get ready to master this challenges based on eNGine and personal needs.

3. Establishing PROJECT MANAGEMENT Education & Communication as a tool for new organization and management of ST – to support integrative management approach in ST and support the company by transition from line oriented business to more and more cross-functional, project-oriented business

4. Set up COMMUNICATION ACTIVITIES via internal communication channels in order to support the understanding of the changes, to increase cooperation and commitment of the managers and employees and to get a proper and objective feedback of the all activities and ensure the right action in the right moment

Changes in HR ManagementVISION, STRATEGY AND

VALUES OF ST, . Remuneration Trainings anddevelopment

Performancemanagement

Employee satisfaction

Recruiting

Retention

Communication

Organization

Exit Management / Outplacement

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Vision, strategy and values:Huge ongoing effort in communication of new vision,

strategy and values, using all channels of internal communication, meetings, workshops, road-shows. Now new wave – Story Box – managers are communicating Strategy / Brand / Customer service/ Company Values.

Remuneration:Unified system of remuneration based on individual

and company performance with the aim to be externally competitive and internally fair.

Training and Development:New centralized system of T&D – technical,

managerial, personal, sales training , INGN competence centre. eLearning, etc

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Organization:Centralization, restructuring, reorganization, redesign

of processes, organization effectiveness and efficiency improvement, Quality Management. Communication:

Critical success factor in time of changes – workshops, meetings, road-shows, offlines, company magazine, intranet, company TV, blog etc.

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Performance Management:Performance Management system based on individual

and company performance – all employees , Performance-Potential Review – all managers.Employee Satisfaction:

Corporate Culture Change project, regular monitoring of employee satisfaction and feedback from employees – Pulse check (2-3 months) Employee satisfaction survey (2 years)

Retention:Key players project – HiPo, (High potentials), HiPro

(High Professionals)

Recruiting:New system for recruiting, more than 2500 new

employees hired from external market, building of attractive employer brand, cooperation with secondary schools and universities, Telekom Day, Conference for technical schools teachers, etc.Exit management:

Support leaving employees, counseling information support (booklet), arctive job searching, requalification, etc.

2002/04/2009

External customers

ST Units Headcount Development 2000-2010

12 345

10 405

8 075

6 750

5 6595 058

4 016 3 770 3 701 3 592 3 311

0

2000

4000

6000

8000

10000

12000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

S4S Prognosis

2102

Based on the statistics of Slovak Job Centres – less than 10% of dismissed employees of ST were officaly registered as unemployed

External customers

2,7%

28,1%

54,5%

14,7%

1,8%

19,2%

54,8%

24,3%

0,6%

14,9%

54,0%

30,5%

0,5%11,9%

53,8%

33,8%

0,5%10,4%

53,6%

35,6%

0,2%6,4%

51,8%

41,7%

0,2%6,5%

50,8%

42,6%

0,2%6,5%

49,6%

43,8%

2001 2002 2003 2004 2005 2006 2007 2008,31.3

University graduated

Secondary school withleaving exam

Secondary school w/oleaving exam

Primary school

Employees Structure excl. RK by Education(Development 2001-2008, 31.March)

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Responsibility Towards EmployeesST employee

WORKWORK – LIFE

BALANCE PROGRAM

LEISURE TIME

• Performance management(remuneration system)• Flexible Benefits System• Employee development• Safety, Health and Protection at Work• Health Care, Benefits • Puls Check, Satisfaction Surveys• Cooperation with schools• Code of Conduct• T-Spirit Values

• Social aid:Collective Labour AgreementHelp in need

• Program for mothers/fathers

• Exit management

• Children camp• Call Centres (Children`s Day, St. Nicholas Day)• Benefits (Section - recuperation)• Regular Offline parties• Christmas party• T-Com Beach Olympic Games

• Education

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Employees Reaction: Motivation and engagement

Measured by : Employee Satisfaction Survey (every 2nd year)

spirit@telekom – pulse check (4 x a year) - participation around 70 % and more

82 % of ST employee would recommend our products to their friends and relatives loyalty index 4 (1 – 5 scale) 89 % of employees like the job in ST 56 % are motivated to work in ST even with more

effort as required 63 % are motivated to improve their performance 89 % consider the working tasks in ST as the

challenge2402/0

4/2009

Customers ReactionTRI*M Index – Customer Retention Intensity Measured By One KPI

TRI*MINDEX40-70

TRI*MINDEX40-70

TRI*MINDEX40-70

TRI*MINDEX40-70

VIRTUALLYLOST

VULNERABLE

POSSIBLYVULNERABLE

RETAINED

European benchmark - average for fixed line operators: 54

10 - 40 70-100

TRI * MINDEX<10

INDEX INDEX INDEX>100

TRI * MTRI * M TRI * M

HIGHLY RETAINED

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Positive TRI*M Development 2001-2007All Customers

European average 54

2002 2003 2004 2005 2006 2007

2602/04/2009

It is not necessary to change.

Survival is not mandatory.

W. Edwards Deming

2702/04/2009

Thank you for your time and attention