Managing-Organisation-Effectiveness-within-Vodafone-Europe-Paul-Chesworth.ppt

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1. C3 –Company Confidential
Managing Organisation Effectiveness within
Vodafone Europe
The ‘Organisation Efficiency Review’
CRF Presentation
2 March 2011

2. C3 –Company Confidential2 December 2009
Overview
1.Vodafone Context
-The origins of the ‘Organisation Effectiveness Review’ (OER)
2.The ‘OER’ structure
(I) Review against the Vodafone Organisation Design principles
(II) Management efficiency KPI’s
(III) General ‘Organisation efficiency’ KPI’s
(IV) The Opco ‘Organisation health template’
3. So how does the overall process work ?
4. Benefits so far
5. Key learnings

3. C3 –Company Confidential3 December 2009
Vodafone in context…
Established in 1985, now Global leader in mobile telecommunications
-c.£45bn annual service revenue
-c.35% operating profit
-c.90,000 global workforce
Global footprint split into 2 Regions:
Emerging Markets Region: India, South Africa, Egypt, Australia, NZ
Europe Region: Still represents c.75% of global revenue/assets
The VF Europe Region comprises 14 Operating Companies in national
markets across Central and Western Europe.
The ‘big four’:UK, Germany, Italy, Spain (SR £5-7bn)
W Europe Medium: Portugal, Ireland, NL, Greece (SR c.£1bn)
E Europe Medium:Turkey (£3bn) Czech, Hungary, Rumania (£600m-1bn)
Small:Malta, Albania ( £300m)

4. C3 –Company Confidential4 December 2009
The origins of the ‘Organisation Efficiency Review’
Europe now a very mature market still in recession
-Mobile telco market reduced by c.10% over past 3 years
-Vodafone Service Revenue reduced in line, leading to a strong focus on
Operating Expenditure to sustain profitability
Employment cost typically represents c.40% of overall OPEX
-Initially headcount/FTE’s became the classic target, but unsophisticated
and unfair, given our varying opco sourcing models
Led to the creation of the OER process, the aim of which was to;
(i)Evaluate all Europe opcos against a common suite of organisation
efficiency/effectiveness indicators
(ii)Establish relative internal best practice and give it visibility
(iii)Create organisation efficiency targets/actions bespoke to each opco to
drive year on year operational efficiency improvement
-

5. C3 –Company Confidential5 December 2009
(I) Organisation design review
-ReviewOpco structure againstthe ’mature market OD principles’
(II) Reviewof management organisation efficiency
-Opco Management Spans and Layers
-Management Ratios
(III) Review ofGeneral organisation efficiency/effectiveness KPI’s
-OPEX as % Service Revenue
-Total Employment Costs as % OPEX
-Total Employment Costs as % Service Revenue
-Distribution of Employment Costs across the organisation
-Opco Sourcing model: In house versus outsourcing
…..Narrowed down from a list of thousands !
(IV) Completion of the overall Opco ‘Organisation health’ template
Organisation Effectiveness Review (OER) structure
NB: Employment Costs = Payroll, Contractors and Outsourced people costs

6. C3 –Company Confidential6 December 2009
(I) The Organisation Design Review

7. C3 –Company Confidential7 December 2009
2007 “Mature Market” Organisation Design Principles
Commercial
•Consumer and Enterprise Business Units will have full P&L accountability and report directly to the CEO
•Customer Operations should be a shared service function residing outside of CBU and EBU
•Online and all directly owned resources should report direct to the CEO
•Terminals should have dotted line into CBU with a solid line to Group Terminals and provide services across both CBU/ EBU
•Brand lead should either sit as direct report to CEO or CBU
Technology
•Hub CTO has a dotted line into CEO with a solid line into the Group CTO, Spoke CTO has a dotted line into CEO with a solid
line into Hub CTO
Support Functions
•Corporate Affairs and Legal and Regulatory should be stand alone functions reporting to the CEO
•A combined Strategy, Wholesale and Business Improvement Function should exist as a single unit reporting to the CEO
•Where the CEO has a large span of control, the Strategy, Wholesale and BI function could be combined as a single unit with
Legal, Regulatory and FRS
•The HR function should hold responsibility for Internal Communications, Health Safety & Wellbeing, and Property
•Finance should have dotted line responsibility for Internal Audit and SCM with a solid line to Group SCM/Audit
General
•For every group programme, there must be an identifiable single contact within the Local Market organisation reporting directly
into a Local Market SLT member e.g. CVM,

8. C3 –Company Confidential8 December 2009
2007 ‘Mature Market’ Management Team OD principles
CEO
CBU
Customer
Operations
Strategy and
Wholesale
HRD CTO CFOEBU
Legal and
Regulatory
Corporate
Affairs
CTO (Hub/Spoke
Europe CEO
•Strategy
•Wholesale/
MVNO
•Business
Improvement
•HR
•Internal
Comms
•Property
•HS&W
•Network
•IS
•Decision
Support
•Finance
Operations
•Customer
Operations
•Customer
Value
Management
•Commercial
Law
•Regulatory
•FRS
•External
Comms
•CSR
•P+L for Cons
business
•Cons product
roadmap
•Go to market
marketing
•Cons sales
channels (retail
etc.)
•Brand and
Customer
Experience
•P+L for Ent
business
•Ent product
roadmap
•Go to market
marketing
•Ent sales
channels
•VIS
•Terminals
•Internal Audit
•SCM
Solid line reporting
into Group
Online
•Online
•VIS if not
CBU

9. C3 –Company Confidential9 December 2009
(II) The Management Organisation Review
-Local Market Management Spans and Layers
-Management Ratios

10. C3 –Company Confidential10 December 2009
Vodafone Management Spans and layers policy guidelines
c.5%c.7%c.30%
Banding Ratios
(A-F Band roles as %of
total roles. 5-7% target)
6 layers
7 layers6 layers
Management Layers
(maximum no. inc. CEO)
No “one on one” or “two on one” reporting
Target = 10
Min = 8 Max 15
Target = 8
Min = 6 Max =10
Target = 6
Min = 4 Max = 8Management Spans
(Average span of
control)
Commercial and
Customer Operations
Technology
Governance/Support
Functions
No A-D single contributors, E Band by exceptionSingle Contributors
Generic principles

11. C3 –Company Confidential11 December 2009
Management ‘Layers’ by function: Europe large markets
Layers: Observations
•Technology:Opco’s A and B have 7 layers, against 6 in Opco’s D and C. Main driver for a 7th layer is the number of FTEs
in the area.
•Consumer:Opco’s A, B, C have reduced one layer. 7
th
layer in Opco D associated to the high number of own shops.
•Business:Opco D the only country with 7 layers, plan in place to adhere layers to the target, upon full integration of a
recent acquisition.
•Customer Operations:plans to reduce 7
th
layer in Opco D (Enterprise Customer Services) by June 2011.
•Support:in general, Support Functions have 5 layers. Finance Planning and Control generates a 6
th
layer in Finance. 7
th
layer in Opco B located in HR, under the Training Unit.Band A-F
2009
Band A-F
2010
2009 2010 2009 2010 2009 2010 2009 2010 2009 2010
Germany 5.6% 5.3% 7 7 6 6 6 6 6 6 6 6
Italy 7.0% 6.9% 7 7 7 6 7 6 7 6 6 7
Spain 11.3% 11.0% 6 6 7 6 6 6 7 6 6 6
UK 4.8% 4.6% 8 6 8 7 8 7 8 7 8 6
A-F% and Layers
SupportTechnology
Commercial
Consumer
Commercial
Business
Customer
Operations
Opco A
Opco B
Opco C
Opco D

12. C3 –Company Confidential12 December 2009
Management ‘spans’ by function: Europe large markets
Spans: Observations
•Average Manager Span within lean organisation guidelines for all large local markets
•All improved average manager spans since OER Nov09 with the exception of Opco C with a slight decrease
•Remarkable improvement in Opco D previously under guidelines in several areas
•Outstanding improvement in Opco A having reduced significantly the population of managers in bands F and G in Technology,
Consumer and Customer Operations.Overall 2009Overall 20102009 2010 2009 2010 2009 2010 2009 2010 2009 2010
Germany 7.6 12.3 5.810.67.915.914.59.8 6.117.77.1 6.5
Italy 8.0 8.8 7.5 7.5 6.0 6.0 4.9 6.813.114.64.3 5.4
Spain 8.1 8.0 8.3 8.210.911.38.1 7.8 9.3 9.2 4.6 5.2
UK 6.1 8.3 4.5 6.0 6.110.55.9 7.1 8.3 9.2 3.6 4.3
Average Span
SupportTechnology
Commercial
Consumer
Commercial
Business
Customer
Operations
Opco A
Opco B
Opco C
Opco D

13. C3 –Company Confidential13 December 2009
Management ratios as % workforce: all Europe markets
Notes:
•Includes verticalsA-F Distribution
94.7%93.1%
89.1%
95.4%94.2%
90.0%
91.7%
90.3%
93.9%95.5%
92.9%94.6%93.8%
90.7%
5.3% 6.9%
10.9%
4.6% 5.8%
10.0%8.3% 9.7%
6.1% 4.5%
7.1% 5.4% 6.2%
9.3%
60.00%
65.00%
70.00%
75.00%
80.00%
85.00%
90.00%
95.00%
100.00%
Germany Italy Spain UK Greece IrelandNetherlandsPortugal Turkey Czech Hungary Romania Albania Malta
Staff as % of workforceA-F as % of workforce
Large Markets
•Highest percentage of A-F population in Opco C with 10,9%, lowest in Opco D with 4.6%
•E band: highest number in Opco B with 141, lowest in Opco D with 76
•F Band: highest number in Opco A with 489, lowest in Opco D with 307
Medium Markets
•Highest percentage of A-F population in Opco F with 10,0%, lowest in Opco J with 4,5%
•E band: highest number in Opco L with 44, lowest in Opco F with 25
•F Band: highest number in Opco G with 179, lowest in Opco K with 58
Opco
A
Opco
B
Opco
C
Opco
D
Opco
E
Opco F Opco
G
Opco
H
Opco I Opco J Opco
K
Opco
L
Opco
M
Opco
N
…target range 5-6% but sourcing model impacts

14. C3 –Company Confidential14 December 2009
Management ratios: all Europe markets shown another way…
Notes:
•Includes verticalsSLT Distribution
0.11%
0.14%
0.25%
0.11%
0.29%
0.51%
0.38%0.39%
0.25%
0.18%
0.47%
0.15%
0.23%
0.32%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
Germany Italy Spain UK Greece IrelandNetherlandsPortugal Turkey Czech Hungary Romania Albania Malta
SLT as % of workforceAverage
12
11
11
9
8
6
10 6
7
5
6
6
1
SLT Population = 99
1 Band F Distribution
4.3%
4.9%
8.3%
3.6%
4.3%
7.3%
6.8%
7.4%
4.5%
3.3%
4.5%
4.1%
4.6%
7.4%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Germany Italy Spain UK Greece IrelandNetherlandsPortugal Turkey Czech Hungary Romania Albania Malta
Band F DistributionAverage
SLT Population = 2497
489
375
369
307
105
84
179
114
126
89
58 159 20
23 Band E Distribution
0.90%
1.84%
2.44%
0.89%
1.20%
2.18%
1.14%
1.95%
1.39%
1.10%
2.17%
1.11%
1.37%
1.61%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
Germany Italy Spain UK Greece IrelandNetherlandsPortugal Turkey Czech Hungary Romania Albania Malta
Band E as % of WorkforceAverage
Band E Population = 693
102
141
109
76
28 25 30
30
39
30
28
44 6 5
F
Opco NOpco MOpco LOpco KOpco JOpco IOpco HOpco GOpco FOpco EOpco DOpco COpco BOpco A
Opco NOpco MOpco LOpco KOpco JOpco IOpco HOpco GOpco FOpco EOpco DOpco COpco BOpco A
Opco NOpco MOpco LOpco KOpco JOpco IOpco HOpco GOpco FOpco EOpco DOpco COpco BOpco A

15. C3 –Company Confidential15 December 2009
(III) General ‘Organisation efficiency’ KPI’s
-OPEX as % Service Revenue
-Employment Costs as % OPEX
-Employment Costs as % service Revenue
-Distribution of Employment Costs
-Opco Sourcing model

16. C3 –Company Confidential16 December 2009
Opex as % of Service Revenue
•Large markets: all keep a stable ratio around 20%.
•Medium markets: in the case of Opco’s E, J and K, percentage around 30% due to a significant decrease in Service
Revenues. Opco I is in expansion phase with high expenditures in network and commercial. Opco G best performer, has been
able to adequate cost structure while improve revenues significantly.
Op Ex % of Service Revenue
20.1% 20.1% 20.5% 20.8%
31.2%
26.2%
18.9%
24.1%
32.8%
30.5%
29.2%
24.8%
24.3%
26.2%
22.3%
20.6% 20.2%
22.9%
29.6%
25.5%
19.6%
25.1%
36.5%
27.9%
28.8%
23.3%
21.2%
26.2%
0.0%
10.0%
20.0%
30.0%
40.0%
5+7 FY11 Actual FY10

17. C3 –Company Confidential17 December 2009
Employment Costs as % of OPEX
Overall Europe average of EC as % OPEX 45% driven by predominantly by Opco A ratio
•Large markets: High correlation with EC as % SR
•Medium markets: Opco’s E and I low. Opco’s G, H, J and K over 40%, the first two decreasing and the last two increasing
against YE09/10
Employment Costs % of Op Ex
54.8%
42.1%
40.6%
45.0%
33.4%
38.9%
41.3%
43.7%
29.3%
42.2%
41.1%
35.4%
19.1%
47.5%
43.9%
47.2%
27.8%
49.2%
18.9%
33.6%
40.8%
39.4%39.5%
30.7%
44.5%
40.6%
42.0%
52.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
5+7 FY11 Actual FY10

18. C3 –Company Confidential18 December 2009
Employment Cost as % of Service Revenue by Opco
Employments Costs as % of Service Revenue 9.2%
•Large markets: Scale typically helps. Opco D and Opco A highest reduction against YE09-10 (0,8% and 0,7% respectively)
•Medium markets: Opco G best performing with 0,9% reduction. Opco’s J,K, and N worst performing. Deterioration in Opco’s J,
E, L, and K.
Employment Costs % of Service Revenue
8.3%
9.4%
10.4%
10.8%
8.3%
9.4%
9.6%
12.9%
12.0%
8.8%
4.6%
12.4%
11.7%
10.2%
9.2%
9.9%
10.2%
12.9%
11.0%
8.5%
8.2%
9.1%
11.2%
4.0%
11.7%
7.8%
11.0%
8.6%
-
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
5+7 FY11 Actual FY10

19. C3 –Company Confidential19 December 2009
EC as a % SR excluding Sales and Distribution Costs
•Large markets: overall relative performance similar but Opco A and Opco D close the gap with Opco B and Opco C significantly
•Medium markets: Opco’s J and K closer to other medium Opco’s. Opco H increases gap with the other medium.
Employment Costs % of Service Revenue (Excluding Sales & Distribution)
8.5%
7.4%
6.5% 6.7%
7.9%
7.3%
8.8%
5.9%
8.7%
9.8% 9.8%
6.0%
3.9%
10.5%
8.9%
7.6%
6.5%
7.2%
7.0%
7.8%
9.4%
6.4%
9.2%
8.4%
9.7%
5.2%
3.5%
10.8%
-
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Employee cost (excl S&D) % Service Revenue 5+7 FY11Employee cost (excl S&D) % Service Revenue Actual FY10

20. C3 –Company Confidential20 December 2009
Distribution of Employment Costs
Overall Europe balance driving future targets…
•Commercial –59.9%
•Technology –28.8%
•Support Functions –11.3%....
•Large markets:
-Opco’s C, D better overall profiles than Opco’s A, B
•Medium markets:
-Technology costs in Opco’s I and K % high
-Support function costs Opco’s I, E and K high.
Commercial Employment Costs % of Total Employment Costs
56.9%
59.8%
66.8%
62.7%
51.7%
57.7%
59.8%
52.9%
33.3%
56.5%
43.1%
59.9%
41.9%
45.3%
56.7%
59.5%
69.9%
67.9%
52.1%
49.6%
60.5%
49.7%
32.9%
53.8%
40.7%
61.5%
40.6%
43.2%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
5+7 FY11 Actual FY10
Technology Employment Costs % Total Employment Costs
32.3%
27.6%
21.2%21.7%
27.2%26.9%
26.1%
28.1%
47.5%
29.1%
37.1%
25.7%
28.8%28.9%
31.7%
26.7%
20.0%
24.6%
27.4%
34.4%
24.8%
26.1%
47.0%
31.9%
39.8%
24.8%
33.0%
30.1%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
55.0%
5+7 FY11 Actual FY10
Support Function Employment Costs % of Total Employment Costs
9.0%
9.5% 9.3%
12.7%
16.7%
13.6%
11.6%
14.9%
17.2%
12.6%
16.6%
11.9%
26.8%
22.8%
9.8%
11.4%
7.5%
4.6%
16.3%
14.4%
12.5%
20.6%
17.6%
12.5%
17.0%
12.1%
23.7%
24.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
5+7 FY11 Actual FY10

21. C3 –Company Confidential21 December 2009
Distribution of Employment costs shown another way…
*
Local Employment Costs Distribution 5+7 FY11 (£m)
-
72
44
128
2
19
4
13
13
38
47
53
44
489
41
56
377
82
36
287
278
-
154
63
163
2
17
2
16
10
26
25
28
23
277
17
26
174
36
16
99
88
11
50
23
43
2
7
2
-
5
13
15
15
10
77
11
13
60
16
7
58
39
0
16
3
5
0
1
0
-
-
2
4
4
1
16
3
2
20
3
2
13
11
0% 25% 50% 75% 100%
Opco O
Opco P
Opco I
Opco Q
Opco M
Opco K
Opco N
Opco R
Opco S
Opco T
Opco E
Opco H
Opco J
Opco A
Egypt
Opco F
Opco B
Opco G
Opco L
Opco D
Opco C
Commercial TechnologySupport FunctionsShare Based Payments

22. C3 –Company Confidential22 December 2009
Opco Sourcing models
Overall 22.3% of Vodafone Europe Employment Costs are outsourced
•Large markets: strong correlation between extent of outsourcing and overall EC performance
•Medium markets: large variation in sourcing models driven by maturity of outsourcing options.
Insourcing / Outsourcing
87.2%
70.9%
56.6%
73.3%
95.9%
91.6%
84.9%
65.0%
87.8%
91.6%
84.6%
99.7%
92.0%
96.5%
12.8%
29.1%
43.4%
26.7%
4.1%
8.4%
15.1%
35.0%
12.2%
8.4%
15.4%
8.0%
3.5%0.3%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
5+7 FY11 Insourced5+7 FY11 Outsourced

23. C3 –Company Confidential
(IV) The Local Market ‘Health assessment’ template

24. C3 –Company Confidential24 December 2009
Example: Local Market “Health Assessment” template:
Opco A
Strengths
Weaknesses
11/12 Budget Considerations
•Continue traction on EC savings to achieve another reduction of c. ?m by
YE 11/12
•Explore and define actions to target the internal FTE number to ? by YE
11/12
•Still the highest Employment Costs as % Service Revenue of
the large markets at 11.0%, although 0,7% reduction 5+7 vs YE10
•Employment costs as % Opex increased in 2.7% 5+7 vs YE10
•Distribution of Employment Cost lowest Commercial focus and
highest Technology focus of the big four
•Still further FTE efficiency opportunities
•EC and FTE’s in Finance and HR still high
•Technology still looks heavy
•Customer Operations costs still high. 100% outbound
and 75% inbound calls outsourced, but still 3,650 internal
FTE’s
•Organisation Model broadly aligned to the ‘mature market OD
principles’
•On track to deliver 10/11 Employment cost reduction target
•On track to deliver FTE reduction target
•Field Maintenance outsourcing completed
•100 civil servants transferred out of the company
•Forced/managed attritionprogramme on track
•Fixed Line integration brought significant management cost
savings:
•Management A-F is now 5.3% of population
•Reduction of 110 band A-F since last OER exercise
•Good progress on spans and layers10.7
8.7
32.4
56.7
51.6
9.0
11.7
22.6
5+7 FC
09/10
Employment Cost reduction
leads to higher overall efficiency
11.011.211.7Employment cost as % of Service Revenue
12.1
9.7
31.7
56.5
52.1
9.1
22.4
YE 09/10
12.8
9.0
32.3
56.9
54.8
8.5
20.1
5+7 FC
57.6Commercial employment cost as % of overall
Employment cost
9.3Support function employment cost as % of overall
Employment cost
31.2Technology employment cost as % of overall
Employment cost
Increased level of outsourcing
due to Field Service outsourcing
12.5Level of Outsourcing (outsource opexas % of
total employment cost)
-Tech
-Comm
-Staff
Disproportionately high total
OPEX reduction
54.5Employment cost as % of OpEx
Impact of EC reduction mainly in
non S&D function
8.5Employment cost (excluding S&D) as % of SR
Overall significant OPEX
reduction
20.5OpEx as % of Service Revenue
CommentsDB 10/11
10.7
8.7
32.4
56.7
51.6
9.0
11.7
22.6
5+7 FC
09/10
Employment Cost reduction
leads to higher overall efficiency
11.011.211.7Employment cost as % of Service Revenue
12.1
9.7
31.7
56.5
52.1
9.1
22.4
YE 09/10
12.8
9.0
32.3
56.9
54.8
8.5
20.1
5+7 FC
57.6Commercial employment cost as % of overall
Employment cost
9.3Support function employment cost as % of overall
Employment cost
31.2Technology employment cost as % of overall
Employment cost
Increased level of outsourcing
due to Field Service outsourcing
12.5Level of Outsourcing (outsource opexas % of
total employment cost)
-Tech
-Comm
-Staff
Disproportionately high total
OPEX reduction
54.5Employment cost as % of OpEx
Impact of EC reduction mainly in
non S&D function
8.5Employment cost (excluding S&D) as % of SR
Overall significant OPEX
reduction
20.5OpEx as % of Service Revenue
CommentsDB 10/11 Internal FTE evolution (WD included)
12,409
12,247
11,788
11,443
11,177
10,500
11,500
12,500
13,500
FY10 5+7F YE10 DB10/11 Oct10 ActFY11 5+7F

25. C3 –Company Confidential
3. So how does the overall process work ?

26. C3 –Company Confidential26 December 2009
Organisation Effectiveness Review: the overall process
PHASE 1 PHASE 2 PHASE 3
“Data collection
and analysis”
“Data review and
action planning”
“Baking targets into
budgets and People
Plans”
OPCO ‘OER’
TEMPLATES
COMPLETED
OPCO OER’S (x14)
Europe CEO / HRD
with Opco CEO / HRD
“DB” ANNUAL
BUDGET
CREATION
OD alignment
Review KPI’s
Agree action planning
“Initial” EC targets inserted in
Opco pre-budget guidance
Opco DB submissions (including
EC and FTE targets) reviewed and
approved
REGIONAL
CONSOLIDATION
OF OPCO OER DATA
GROUP CEO OER
Group CEO / HRD
With Europe CEO/ HRD
OPCO ANNUAL
PEOPLE
PLANNING
KPI analysis with
Europe wide results
transparency
Visibility of Opco actions
Regional / global actions
Establish “Initial” DB
employment cost targets
OER actions baked into
overall Opco “People Plans”
within the “Organisation and
Change touch point”
OCTOBER -DECEMBER JANUARY-MARCH

27. C3 –Company Confidential
4. OER outcomes to date…

28. C3 –Company Confidential28 December 2009
Qualitative benefits so far…
•Drives alignment to the Vodafone OD Principles
•Eliminating organisational complexity
•Clearer line of sightbetween Vodafone Group organisation and the
Operating Companies
•Provides internal reference point for OE benchmarking and OD
practice sharing which is enabling efficiency improvement.
•Enables intelligent OE target settingrather than ‘FTE focused’
targets
•Provides a platform for HRto drive the OD and organisational
efficiency agenda.
•Positive effect on line management mindset on organisational
efficiency

29. C3 –Company Confidential29 December 2009
Quantitative benefits so far…
•Annual employment costs reduced by c. £275m over 2 years
•Employment Costs as a % of Service Revenue improved from 10.1% to 9.2%
•FTE’s reduced by 12%
Employment costs and FTEs
Management efficiency gains
•Management to workforce ratio improved by 1.5% to 6.2%
•Layers:5/6 layers now the norm from CEO to frontline staff
•Spans: Almost complete compliance against our span guidelines
•Single contributors: All A-E Band single contributors eliminated

30. C3 –Company Confidential
5. Key learnings…

31. C3 –Company Confidential31 December 2009
Key learnings…
•Gaining Group CEO advocacyreally helped !
•Opco Comparability drives tool ‘usefulness’
•Results transparency drives best practice…avoiding judgements a key enabler
•Tool development
•Fewer more impactful measures
•Inclusive approach to tool development
•Institutionalise the process
•Must be linked to business outcomes and consequences
•HR capabilitykey and develops with experience/depth of knowledge
...as does that of the line managers and their HR input/support expectations !
•The process provokes questions and inevitably further OD interventions
e.g. Outsourcing review, Support Functions structure review, COP’s role expansion ?

32. C3 –Company Confidential
Questions/discussion…