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HRD Interview with Tom Brown, Director - Human Resources, Rolls-Royce

Tom Brown and his family were settled in Australia, his family established in the Australian way of life. He says: "That was it as far as we were concerned". Then a call changed all that: "Tom, what about Rolls-Royce?" The caller didn't need to ask if he was interested. Jason Spiller finds out what changed his mind.

Tom Brown is the Director of Human Resources for Rolls Royce. He was interviewed by editor Jason Spiller and photographed by Gary Batchelor at the organisations' London headquarters.

Was HR the career plan from the beginning?

It's fair to say, I didn't choose HR. I graduated from University and went to work for Burroughs, a big US computer company, which subsequently became Unisys. I did a two years training programme, in the marketing side of the business. Anything that was sold had to be installed, I quickly realised I didn't like selling, but I did like the installation of the systems, and at the heart of that enjoyment was the fact that in the process of installation of new systems, it was about change. I recall one particular installation, a big, family run business of electronic stores in Aberdeen, which was putting in a computer system for the first time. The MD asked me to come up with the reasons why he was doing this, essentially to make the business case for this new way of running the business. I went away and scripted out what I thought should be said and I told him I think it would be better coming from him. He came back and said: "That went well, but how do I choose the right people from my staff to run computerised systems?" Although I didn't realise it at the time, these were real change issues. So again, I went away and thought about it and went back with an idea of how to run the selection process. He liked the process and asked, "Will you do it?". I did, and I really enjoyed it.

This was 1980. Shortly after this, my wife and I were at a dinner with a couple we had met for the first time. He was the HR Director of Mobil Aberdeen and he asked me what I did. In the context I related this story to him, and he said, you should be in HR, to which my response was ‘what the hell is that?' He called me some time later, and said, if you're interested, I've got a job. The rest is history and I spent the next 16 years with Mobil.

Yours has been a largely international career, what impact has that had on you and your family?

Yes, HR has been my life for the past 30 years, and only five of those years have actually been spent working in the UK. At Mobil, I started in Aberdeen, went to London and then spent a couple of years in Camaroon, Africa. In 1984 we moved to the States and spent 12 years there, with Mobil in six different locations, across exploration and production headquarters, petro chemicals, and chemical manufacturing. Much of it was change management, for example we took five E&P affiliates in the USA and combined them into a single entity. We took over the largest independent oil manufacturer in the US and I was heavily involved in the integration of the company into Mobil. As I say it was very change driven work, which is what I really love to be involved with.

On a couple of these projects I had worked with a senior executive in Mobil called John O'Connor. He had been recruited to be CEO of BHP (the Australian resources giant) petroleum business. In late 1995 he approached me to join BHP in Melbourne to help in the transformation of the business. In every way it was a life changing decision. In between I have had a couple of periods back in London, the latest of which is now with Rolls-Royce.

What strikes me is, you were inexperienced in HR and HR was not fully evolved at this time. On this grand scale, this must have been a stab in the dark for you?

Rex Adams was head of HR at Mobil when I was there. In a meeting one day he said to me, "You know Tom? What you need to know about HR you can learn on a wet Sunday afternoon. The rest of it is common sense." I absolutely believe that.

I was fortunate to grow up in HR terms in Mobil - the mantra there was that you were a business professional first and HR professional second. I didn't know there was any other way. So for me it was taking this thing called HR and applying it to finding solutions to drive results for the business. It's not about what is functionally excellent or best practice, or getting papers published in the HR media. It's about being practical, finding fit-for-purpose solutions for the business, to help drive it forward. I had a very good career going in Mobil, getting exposure to varied and interesting projects - fast-tracking through. I certainly felt that I was in charge of my career.

Would that be a tip that you would give to others?

There are two. First, take charge of your own career. Know your external value (a warning here though - you might find that it's not as high as you think), because you can never know your internal value without this understanding. For me it worked well. In Mobil my career was tracking along well. I felt I was in charge, making decisions on roles I was offered. It was only when I stepped tentatively outside and took the BHP role that I fully realised my external value and also what the excellent development ground Mobil had given me in terms of a career and vantage. This was reinforced a couple of years after I moved, in the 1998 film The Truman Story. Carrey's character believes he is in control of his life in an idyllic town setting. He discovers it is actually a reality TV show watched by millions and there is a real world outside of his perfect life. It is similar to careers spent in large global corporations. You realise that you are being controlled more than being in control. Really it's only when you actually step outside that ‘reality' you really understand what you are really capable of.

The second is, don't look for the HR challenge in a role. Look at the business challenge - what is it really trying to accomplish. That's what needs to excite you. You can be absolutely certain that if the business challenge is a compelling one, then the HR challenge will be similarly compelling.

I get the feeling that you think HR can be somewhat over-analysed?

I do think HR can be its own worst enemy. We desperately seek credibility as a business partner and a seat at the table but we seem to think it is our right, that we don't have to earn credibility and therefore justify our seat at the table. We can only get there by demonstrating that we understand the business and the external environment in which the business is operating, and that through this understanding we can offer the businesses fit for purpose solutions.

Why does HR have to fight for this recognition as a business partner, to constantly have this reaffirmed?

We still have to overcome our ‘personnel' roots. We began life in an administrative role. The rise of the trade unions offered a growth opportunity where we inserted ourselves into a ‘middleman' role between management and the Unions. As business has become more global and trade unionism has declined HR has struggled to find its new identity in this fast paced world. We need to clearly demonstrate how we can support the business success in the ever shifting environment which is now the norm.

Do you think a part of the reason HR evolved was as a buffer, or mediator between union, employee, employer and Government?

Yes, I think HR ‘middleman' role was a ‘growth spurt' in HR's evolution. HR grew up because there needed to be this link between management and the represented workforce, simply because the managers could not and in some cases didn't want to talk to the unions, so HR became this middleman.

Part of the growth of HR as a function was as the link between management and the represented workforce - often because the managers could not, or did not want to, talk to the unions, so HR became this 'middleman'.

This role built on HR's other evolutionary path as the ‘personnel' function. But I also think at that point, the growth stalled. The gap from there to the business partner role we seek is not so much a long jump - it's more like a triple jump and many HR functions have not proven to be very athletic!

At Rolls-Royce we are making that leap in many ways. However, at the highest level, we are doing exactly what the business does. We are a global power systems company - we build engines and in HR we are doing just the same - building the ‘People Engine' which powers the global power systems company. In this way we bring the language of the business and HR into alignment.

What do you think HR means to employees today?

I think that depends. For many, they will still see HR as the transactional function since that will be all they experience through shared service centres etc. I would hope however that many experience a very different view of HR as the employee advocate. But that is not an exclusive role - for it to be successfully executed, it needs to be a role shared with line managers. Also, I believe that some of what we do will - and should - remain invisible to employees. The systems and processes we design, and managers use in their leadership of their employees, should not get in the way but simply provide the means to maximise an employees engagement and performance.

Rolls-Royce has expanded internationally very quickly, the nature of its business has changed and so has the world. This must have been a tough HR challenge? RHr test to keep up

Rolls-Royce, of course, is traditionally a British aerospace company. If you go back 20 years when it came out of public ownership, 60 percent of its revenues were generated in the UK. We are now well on our way to being a global power systems company, operating around three ‘hubs' in the UK, Singapore and the US. Fourty percent of our revenues are now generated from Asia. Fifty-five of our revenue comes from the after market business. These changes are dramatic and require major changes to our HR approach. As I said earlier, find a compelling business challenge and a similarly compelling HR challenge is lurking nearby. As a British Aerospace business, we ran our business on a multi-insular basis, with everybody doing their own thing. As a global power systems company that approach will not work. Every aspect of what we do in HR has to be challenged and made fit for purpose in this very different environment - and it has to be achieved at pace. Our competition is not standing still.

What were the most difficult aspects of creating the HR infrastructure to cope with this change and growth?

Rolls-Royce is a long term business. We have an order book which stands at over £57 billion which takes us well into the 2020s. Our business strategy was put in place by our CEO, Sir John Rose, over ten years ago and it is still as relevant today as it was then. It enables our global growth and entry into new business such as civil nuclear.

Around the relative calm of the strategy however, changing the way we operate to be truly global and more competitive creates a bit of a maelstrom. In HR, we had reflected the ‘British Aerospace Company' mindset for many years. Changing that mindset with our own HR community has been one of the major challenges. Add to that the challenges of global IT solutions, designing and influencing global process solutions and engaging line managers in the change process and you have some idea of the challenge we face.

How have you set up your global HR team?

We are building the global function around the platform of shared services. If that platform is not solid then the rest of the structure is destined to collapse. We have established the SSC in the UK and are now expanding the service into our other major hubs in the US and Singapore and also into Germany and Northern Europe. We have four global centres of excellence for resourcing and deployment, learning and development, reward and the global employment framework. These are our four pillars. And finally there is the business partner role which faces into the businesses, supporting line management in achieving their business objectives, utilising the systems, processes and services of both the COEs and the SSC organisations. The function is led by an HR executive comprised of the leaders of each element of the organisation including the sector HRDs. We are bound together by a shared way of working and a shared responsibility for the leadership of the function globally within Rolls-Royce.

How can you make sure that systems are working and will be sustainable long-term, particularly in an industry that looks ahead 20 plus years?

This is a long-term business and our systems have to be sustainable. But that does not mean they stand still. The world around us is constantly changing and that will continue. You have to start by putting in place the structure, systems and processes which you need for the near-term. Our HR program is a three year programme currently going out to 2011. In addition to laying out our work priorities, it also includes implementing the global structure and reducing our headcount by over 40 percent from our start point at the end of 2007. It is a three year journey but at the end of each year we look forward, to ensure that what we are planning to do is still appropriate for the business and get that signed off by our office of the chief executive (OCE). Key enablers in that plan are standardisation, upgrading the capability of the HR function globally, and a global IT infrastructure. Getting these right will help ensure we are sustainable and not static.

You come across as a very systems and technology reliant HR practitioner - is this the case?

This is to help us get from where we started to where we need to be. IT systems and technology is not a ‘nice to have' - they are essential. I don't see IT as simply a technology - it is an enabler of change, especially in a global environment. IT provides the tracks which enable us to span the globe in terms of systems and processes.

What is the most important part of making sure this scale of change management is successfully implemented?

In any change, regardless of scale, employees need to understand why. Nobody likes change. I remember the first slide I ever saw on change management. It was a picture of a baby, naked on a changing mat, with a big smile. The caption said: "The only person who likes change is a baby with a wet nappy". You have to start from there and then give people enough information to understand a) why: b) what will be different after the change and, most importantly, c) what it means for them. From there it is about consistency. Be consistent in delivery - do what you say you are going to do and link delivery back to the message to reinforce it.

Surely the bigger the organisation, the more difficult this is to do effectively? What is the formula to achieve this?

Change is not the outcome of a mathematical process - even in an engineering company such as Rolls-Royce. So there is no formula. There is a way of doing it which I referred to above but what that looks like in practice differs from company to company. One example in Rolls-Royce which shows how we do this on an ongoing basis is our ‘storyboard' process. For the last two years, using 400 trained employees, we take the story to all our employees, explaining what is happening in the external environment, corporate context, impact on our sectors and what our plans are to meet the challenges. These are delivered in a discussion format to maximise both participation and understanding. In this way, when we make decisions during the year, our employees have the context within which to understand the decision - even if they don't particularly like it.

How effective is the Rolls-Royce brand in terms of attraction and engagement?

It is hugely effective. It's an attraction, mentioning Rolls-Royce evokes two reactions. First, a picture of a car flashes into their minds even though we haven't been in the car making business since 1973. That is not important - what is important is what it evokes: engineering excellence, quality, safety, trust etc. These values are what Rolls-Royce is about whether we are in the car business or not.  The second reaction is a simple, three-letter word - wow!

From an engagement point of view, the brand is equally powerful. We conducted our most recent global survey at the end of last year in partnership with a new global provider, SIROTA. They were amazed at the scores across the global organisation in reaction to the statement: "I am proud to work for Rolls-Royce" which were well ahead of the benchmark. And an added benefit of the brand is our ability to retain our employees. As a result we have been able to create opportunities to bring in more capability and also develop the capability of our current employees. This includes significantly increasing our recruitment of graduates from across our three hubs. The Rolls-Royce business challenge is exciting and, consequently, so is our challenge in HR. The combination of both provides a fantastic environment for us to be able to attract, retain and develop HR professional globally.

How do you relate the connection of the individual to the organisation, in terms of performance? Do you think you've got this right?

In one word - feedback. Having a formal process is important to link the various elements of the management system together from objective setting to reward for performance. But what really makes the difference is the informal and ongoing feedback to each employee on how they are doing - recognising achievements and giving course directions. It is this behaviour that builds a performance improvement criteria in an organisation, not simply having the process. In answer to your question, we are not there yet but we are on our way.

You are significantly reducing the HR numbers across the board. Has the recession meant that you have slowed down the numbers that you are recruiting?

We are on track towards our goal but as I said earlier, one of the key enablers, in addition to standardisation and IT solutions, is increasing the capability of the HR community. We have gone through a rigorous assessment centre process which has helped us identify, along with our own performance management system, where the strengths and weaknesses were in the function. Importantly, the centres also delivered the message that the performance bar had been raised.

How is Rolls-Royce positioned with regards to recession and what are long-term objectives?

Rolls-Royce is essentially operating on three fronts. First is making the business more competitive by addressing critical areas such as unit cost and operational excellence. Secondly, we have to address the impact of the economic downturn, particularly on our customers and suppliers, and make the necessary adjustments to our workforce and overall operating costs. Thirdly, growth. We have already announced global expansion in Singapore and in Virginia in the USA as well as our entry into the civil nuclear business. We are also looking at possible inorganic growth opportunities. Bottom line, our aim is to exit this current downturn fitter and more competitive than we entered it. All of these mean significant and exciting challenges for the function, not to mention our own functional journey. Longer term, the aim is to build a business-focused HR function which is recognised internally for the value it delivers, as a place where HR professionals are proud to work and externally as an experience the most capable HR people want to have on their resumés.