Welland Water is a large water company which, as pointed out by the Managing Director, operates 'in a monopolistic situation, providing a service that is absolutely fundamental to life'. But he also stated that: 'we recognize that our organization must not abuse that situation and that we must implant in the company values that would be appropriate in a competitive environment'. He went on to say that:
We can demonstrate that the services we are giving our customers are improving dramatically, year on year… We have an ongoing commitment to invoLVe our customers – we were the first water company to actually prepare an annual report for them… We carry out frequent tracking research which shows that our customers' perceptions of us are improving, on occasions despite a contrary trend in the national water industry… But the critical success factor which allows all this to happen is the level of employee satisfaction and commitment we have, because without that we can't achieve any of the other things. And we know about this because we get consultants to carry out periODic employee surveys which we discuss with everyone.
The Managing Director described the approach to formulating business strategy as follows:
Our strategic approach is very simple. It is summarized in our vision statement: we AIm to provide the level of services our customers demand at a level of charges that our customers would see as acceptable. Our business strategies are formed essentially from top-down setting of the parameters and then bottom-up preparation of business plans in which all our people are involved. They prepare all their own business plans, which reflect the top-down constraints, and because they are preparing them that automatically buys their commitment to them.
Our best ideas for policies and strategies come from the people who carry out the work. We don't have people locked in little rooms thinking: 'What's the next strategic move for the business?'
What you need are people who are in tune with what's happening tHRoughout the organization; who are listening, talking, picking up all the ideas… What we try to do is to capture all that knowledge, all those initiatives, all that expertise, and reflect that in the way we take the business forward.
I like to talk about getting values in place rather than constructing strategies.
The Finance Director explained the significance of the vision statement in developing business strategies:
The company developed a vision statement which encompasses the key forward-looking strategy over a period of time but without timescales having been set down. This has set the guidelines for future initiatives and any such initiative in the rolling five-year business plan is judged on whether it fits in with that vision.
The Managing Director made the point that:
The only human resource strategy you really need is the tangible expression of values and the implementation of values… unless you get the human resource values right you can forget all the rest.
The Finance Director commented that:
There's a lot of interaction, prior to and during the top board discussion, which tends to be concerned with culturally based issues and the way we manage people.
And the Director of Operations indicated that the organization developed its HR strategy:
Through evolution; it's an aggregation of things that have come together, not necessarily in the right order.
The approach to developing HR strategy was described by the Head of HR as follows:
In our original HR strategy we tried to encompass the emerging values and principles that we felt should determine how we should conduct our business in terms of people. HR strategies come from the ideas we share together and the problems and issues that managers are working on… It's very much a team effort, working with line colleagues in whatever they do… I use the intranet to flash ideas round to groUPS of managers and thus build up draft policy papers. The intranet is a very powerful device for getting ideas back rapidly.
Comment on the approach to HR strategy adopted at Welland Water. What lessons can be learnt from this?
This is a good example of a relatively unstructured but shared process of evolving HR strategy as part of the business strategy.