Center for Advanced Human Resource Studies

Over the last 18 months, The Hanover Insurance Group’s Human Resources team has designed and implemented an extensive reorganization. CHRO Bryan Allen offers four important lessons from that process.

Allen joined The Hanover in 2006, coming from the position of Managing Director/Head of Human Resources at US Trust. Prior to that, he held a variety of positions with the human resources organization at Morgan Stanley.

When he arrived at The Hanover, the company was well into a successful turnaround effort it has since completed, strengthening the organization on every dimension.

"Fred Eppinger was appointed chief executive officer at The Hanover in August 2003, and, soon after, made the strategic decision to sell its struggling life insurance business and focus the energy and resources of the 150-year-old organization on a singular goal—to become a world class property and casualty company," Allen says.

"Since then, the company has dramatically improved its financial foundation and flexibility, earning excellent ratings from the industry's leading independent analysts. In addition, we've assembled one of the best teams in the business and made unprecedented investments in our product and service capabilities, enabling us to continue to meet the needs of our agent partners and their customers, and achieving profitable growth in all of our businesses."

Lessons in restructuring HR

The growth of The Hanover meant that HR had to restructure as well. "We needed more agility in our talent and deeper knowledge of our industry and the competitive marketplace," Allen explains. "We actively started the organizational assessment in March 2009, in consultation with The Hanover’s executive leadership and an outside consulting firm—to keep us honest. In September 2009, we began rolling out the new model in stages."

Essentially, Allen made three major changes in HR’s approach. The new organization needed to shift its focus from: administration/operations toward a more analytic and strategic capability; technical competency to consultative problem-solving; and oversight/planning to supporting The Hanover’s business strategy and planning.

"We are now organized into three core functions," explains Allen. "Our Business Partners team is organized around our key business leaders and functions, requiring deeper business knowledge and strong organizational design and effectiveness expertise. Our Shared Services team delivers human resource services, from managing talent acquisition and employee relations, to policy management. And, our Talent Solutions team is responsible for talent management, employee rewards, HR effectiveness, and community relations."

"It was a significant change in the way we did the work, both operationally and in partnering with key constituents,” Allen says. He cites four main lessons that emerged from the experience.

First, "involve everyone at the leadership level in the change process," Allen advises. "The early stages of discussion should be designed for feedback so people will feel some control. Always choose to be more inclusive."

Second, says Allen, "it’s important to move quickly through the changes so that people aren't left hanging. The faster decisions are made, the better, especially if there is a lot of change occurring simultaneously in the broader enterprise."

Allen also notes that he and the HR leadership team were clear about what the restructuring would mean, telling employees that with this organizational change, their individual roles would give them broader exposure to the business and across the HR functions.

"If you’re not looking to develop new skills, you will likely make a change out of the organization in time," he notes. That directness paid off. Many people were reinvigorated by their new roles and future opportunities.

Third, "it will get easier again," Allen counsels. "We had a cross-organizational and cross-level working group to test the model and the process, design jobs and assess their levels." With that level of inclusiveness, "we didn’t have a lot of push-back in the end," says Allen. "The organization is all of ours."

Finally, Allen says, it’s important that HR capabilities support business goals. "My time is 75 percent talent and new business acquisition, organizational and leadership development and effectiveness, and corporate governance," he explains. "I need direct reports who can work laterally, across the HR organization, so that business issues and HR capability meet to solve business problems."

"We’ve realized some important benefits of this alignment already, but it’s going to take additional time to fully develop the distinctive capabilities we need to be a world class organization," Allen concludes.

The next generation of HR leaders

Allen believes partnering with the Center for Advanced Human Resource Studies (CAHRS) will provide him and his leadership team access to more senior level HR development opportunities and advice.

"Every major consulting firm talks about the key issues, but we are always trying to identify new ways to get more of the solutions into our business," he says. "The Center is a one-stop resource we believe will help us develop alternatives and think through options."

One of his major questions—where do we get the next generation of HR leaders? "Unlike the accounting world, where CPAs can just move up to the next level, HR doesn’t have a set of skills that get developed in a common way," Allen explains. "People in HR come from a variety of backgrounds."

To build this HR leadership pipeline, Allen expects to develop a plan that grounds his staff even more in the relevant business issues, helping them develop a broader range of HR technical skills through more rotations across the HR organization and the business. Through this focused development, the talent in the organization will attain broader problem-solving skills, enabling them to be stronger business partners.

Developing a clear vision of the future and then executing along the pathway is key. "We are a professional services firm and we are paid to solve problems," Allen concludes.