Learning from the lessons of the recession

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When recession hit in 2008, beer manufacturer Molson Coors realised it needed to become leaner to survive.

Head of HR and facilities Katie Pearce’s team were tasked with supporting a significant redesign of the organisation, involving restructuring at every level.

“There wasn’t one structure or function that didn’t go into some form of consultation. It was pretty immense,” says Pearce. “At the time we started the organisational change we had about 2,350 employees, and we now have 1,950.

“Life suddenly moved to a really strong focus on cost. From a strategy perspective things like our normal day-to-day business around development and engagement fell to the wayside.”

The biggest change made was taking “a whole layer of the leadership team out”, reports Pearce. While this “could have completely disrupted the business”, in fact it’s left it in a much stronger position, she says: “That actually connected the leadership team much more closely with the business.”

In fact, though very much a tough love approach, the process has been a hugely positive one. “This was a consequence of the recession, but actually to right-size the organisation to make sure we continually stay the right size was the correct thing to do anyway, looking back,” says Pearce.

This isn’t a mentality Pearce and her company are willing to lose sight of. For Molson Coors, continuously scrutinising staffing levels and business structures to check they’re as efficient and effective as possible is now very much the new normal.

“I expect my business partners to continually push on organisational design,” she says. “That’s not necessarily about cost cutting. It’s about: is the business the right shape and size for what we need and are there opportunities we should be looking out for? That’s a really different mindset to where we’ve been in the past. It’s just become what we do as part of continuous improvement.”

“Cost used to be a dirty word, nobody particularly wanted to talk about how much it cost to hire and develop people. But now it’s really clear.”

Cutting costs not only through restructuring but also on the rewards and benefits side of things also taught Pearce some key lessons she’s keen to hang on to into the upturn and beyond. Chiefly: not to underestimate the importance of small benefits.

“One of the biggest things I’ve learnt is it’s not about the big flashy things, it’s about the small perks. One of the things we definitely got wrong was taking all our coffee machines away. That didn’t even save that much money. Did it look good on a piece of paper? Yes – it seemed a luxury at the time. But that actually really annoyed people.

“So yes you need to develop your employees with great training courses, and stretch them and give them big roles and projects, but you can’t forget the basics.”

But this focus on bringing positive lessons forwards doesn’t mean that Pearce’s team isn’t re-strategising now the economic outlook is rosier.

“Even though we came out of the restructure in a leaner place our engagement took a massive dip,” she says, explaining that this is being combatted through communicating why change had to happen.

“It’s showing people that even though we’ve been through a big period of change this is actually business as usual now,” she explains. “It’s trying to give people the message that it’s all of our responsibilities to make sure the organisation is now fit for purpose, so we don’t ever have to restructure again.”

It’s also important that recruitment and L&D budgets are now expanded back out, says Pearce. “My budget is now less than it was before the recession but only slightly less. So the business is very committed to developing individuals and investing in that.”

Further reading

Can HR remember how to lead in an upturn?

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