Imagine you arrive at the office one day and get this assignment: Take charge of everything HR-related in splitting up a company with 260,000 employees spread over 160 countries. Oh, and you have eight months to do it.
That happened to Cheryl Mohr. And she survived.
“This is probably one of the most challenging opportunities I’ve ever had” in more than 30 years in HR with the global tech firm, Mohr told a rapt audience of practitioners on Tuesday at the SHRM 2016 Annual Conference and Exhibition in Washington, D.C.
Despite her long experience, “you find out a lot of things you never knew” about HR in the process, Mohr said.
The challenge began in October 2014 with an announcement that Hewlett-Packard Co. would divide into two new companies. Hewlett Packard Enterprise, with about 220,000 workers, would keep all the service-related business. HP Inc., with about 50,000 employees, would keep the printer and PC business. “Day One” of the split was to be Nov. 1, 2015.
But the company — and Deloitte, which had the contract to manage the project — didn’t have a full year to plan. CEO Meg Whitman wanted the separation in place on Aug. 1 to make sure all the bugs were worked out before the formal division, Mohr said. That meant eight months to create two global companies out of one — and her job was to manage the people part.
In the end, “We did have a seamless Day One,” she said. But it wasn’t easy.
For starters, the business had to keep running — and hitting its goals — while the split occurred. That meant elevating or hiring leaders to replace about 1,000 people who were dedicated full-time to separation planning, Mohr said.
Among key strategies the company employed was a process dubbed “clone and go.” That meant replicating the current arrangement in both new companies with a minimum of tinkering, Mohr said. The philosophy was “speed over elegance,” she said. “In some cases we just had to get it done.”
“We didn’t have a lot of time to think ‘Do we really want this policy?’ “ she said.
That included sticking with technology that the company was using at the time. In HR, that meant keeping Workday for information systems and Taleo for recruitment in both new companies. And it meant keeping largely the same benefits packages.
Another strategy was adopting transition service agreements between the two future companies to dictate how they would help each other after Day One for up to two years. These agreements were especially important in functions that are especially complex to separate, such as IT, real estate and finance.
For HR, among the most important first steps was allocating employees to their new companies and roles — and doing it quickly, for the sake of other departments that needed that information to do their own planning. Mohr wanted a deadline of September 2015. With the accelerated schedule, IT said it needed those assignments by May.
“At the end of the day, I lost,” Mohr said. And by this point, that was just four months away.
That process started by defining 12 employee layers in the two new organizations, from CEO on down. At the management levels, that sometimes required recruiting from outside to fill a duplicated role. More often the company did it by promoting a top lieutenant, Mohr said.
Luckily, “we had a lot of good succession planning” that helped, she said. In the end, the company hired just 2,700 people to fill new roles — not bad, Mohr said, considering the size of the workforce.
Another task was spreading new people around, so that one company didn’t keep all the experience. One example from within HR: Hewlett-Packard had 59 people working on HR systems. The two new companies each would need a similar-sized HR systems staff. That mean hiring another set of people and distributing them equally between the two new companies.
Once decisions were made, all 260,000 employees needed offer letters spelling out their new employers and roles. Multiply the complexity of this by specific laws around the globe, including some governing how the letters were delivered and how people could sign them — electronically or on paper. In 22 countries, government approvals were involved.
The company used many approaches to get this work done in a hurry, Mohr said. In Russia, for example, where local laws required signatures on paper,, it held “signing parties” in company cafeterias.
HR also had to organize monthly training sessions for managers on separation issues. It also implemented an personalized interactive guides on the company intranet to help employees manage the transition. These electronic timelines told workers what they should do and when, allowing them to catch up on missed deadlines and see decisions they would need to make down the line.
It all got done by Aug. 1, Mohr said. But there were some issues, which led to some lessons learned.
Principal among them was that some data got lost when HR data in a planning database was transferred into Workday, Mohr said. It overwrote some 75,000 day-to-day entries that managers had been making in the course of normal business. That work had to be done over.
Now, seven months after the split, the two companies are in a “transformational phase,” said Mohr, who became a senior vice president for global HR with HP Inc. The two companies now have time to reexamine the processes they cloned from Hewlett-Packard and retool them as needed for their narrower missions.
“Separation does not end on Day One,” she said.
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