Nevertheless, in January 2008, Terra Firma announced the global restructuring of the business across 26 countries, with the loss of 1,500-2,000 jobs and cost reductions of £200 million. Remarkably, this feat was to be achieved within six months and without disrupting the everyday running of the business.
As a specialist in major corporate restructuring programmes (at BMW/Rover, Marconi and Northern Foods), I was parachuted into EMI as interim president of HR. It was to be a complex and challenging project but one, despite media reports, that did have successful outcomes, not least the trebling of operating profits and securing of job reductions without business disruption or any individual claims. Ultimately, as a result of the change programme, EMI was put into better operating shape and this remains the case today.
One of the first tasks of the restructuring programme was the appointment of highly experienced senior leaders at board level who would drive change through the organisation. Once in place, this operating group set about changing the business model from one with a geographical focus, where each country within the EMI Group managed its affairs autonomously, to a global functional matrix. This was critical to minimising waste and achieving efficiency throughout the business.
The new structure of the organisation was mirrored within the HR function itself, with global business partners taking the place of HR managers. An HR Service Centre with improved global HR data collation and reporting was also created to improve efficiency.
A key element of the EMI restructuring programme was an almost 40% reduction in headcount over a six-month period. This involved establishing appropriate consultative mechanisms with UK employee representatives. Across the rest of Europe, attention was also paid to the formation and agreement of social plans, as well as extensive negotiations with Works Councils. A key feature of the programme was a commitment to regular communication and consultation, so that employees were kept fully informed of developments. At the peak of the change programme, some meetings were held on a daily basis. All employees were given the chance to apply and be selected for roles in the new, streamlined organisation, feedback was given to successful and unsuccessful employees and support mechanisms such as outplacement were also put in place. As a result, job reductions were achieved within the specified time-frame and to the agreed budget and critically, without individual claims.
The reduction of EMI's cost base required a major cultural transformation across the organisation. In an industry where senior executives had been receiving substantial remuneration packages without any reference to personal performance, the introduction of a global performance management system was an early priority for the new company leadership. Profligacy was evident in many areas, including an annual taxi bill for executives of over £700k - confirmed by the hire firm as the second highest in the whole of London at the time. Not surprisingly, the subsequent spending and expense claim clamp-down came as something of a culture shock.
Communicating a return to EMI's core vision and values was an essential part of the new drive for efficiency, cohesion and improved performance, with the core vision focused on re-establishing EMI as the premier consumer-led global music company.
The implementation of an online global talent review, which reviewed the top 70 leaders across the globe over a six-week period, accelerated the deployment of the best talent. High Potentials were identified to provide a global senior management succession plan and talent pools were created of individuals who could best continue EMI's transformation and drive the development of a new digital business.
These elements were supported by the implementation of a new global reward strategy that accurately reflected market conditions as well as the revised business model. Innovative board packages and long-term incentive plans were established to encourage staff retention and stability and meet the business needs of EMI's private equity owners. A global levelling project was undertaken to ensure consistent benchmarking, while contractual arrangements, rewards and benefits were harmonised against external best practice.
All of these changes were completed in a challengingly short time-scale and provided an excellent platform to deliver improved business performance. But while the restructuring programme succeeded in increasing operating profits from £175m in 2008 to £334m in the year to March 2010, it won't be enough to save EMI from its most likely fate - a takeover by another big music industry player or being broken up and sold to other media groups and/or venture capitalists. Either way, it will be the end of a once thriving music institution.
Harry Dunlevy (pictured) is a director of HR consultancy, Independent
