Page 441 - Operations Strategy

caSe Study
10 Hartford Building Society: to

meaSure, or not to meaSure? 1

Jane’s dilemma
It was 6 p.m. and Jane Gardner, Director of Strategy at Hartford Building Society, was
ready to leave the office. She had spent the afternoon preparing for the quarterly per-
formance meeting with all the Society’s directors tomorrow. These meetings, which
should be central to guiding the Society’s strategic direction, to Jane, often felt like
a formulaic rehearsal of what everybody already knew. Yet, in the last two to three
years, there had been a serious attempt to match the organisation’s performance
management system (PMS) with its strategic ambitions. Over several months, the
Society had progressively removed all performance league tables, personal incentives
and numerical targets from their branches. The Society’s performance mantra had
become ‘sales through service’ and rather than basing ‘performance’ on the achieve-
ment of quantitative figures, the ‘success’ of all parts of the organisation, all teams,
and all individuals was now judged on the basis of how decisions and behaviours
were aligned with Hartford’s core values. In fact, most traditional data (e.g. num-
ber of mortgages sold, number of new savings accounts opened, footfall traffic in
branches, etc.) were still collected, but they were not made visible to employees, in
order to avoid potential distortions in their performance. As a method of managing
performance, it had been a radical change and a rare move for a relatively conserva-
tive financial services business.
As Jane was leaving, Adam Davies, a branch manager, put his head round her door,
obviously eager to speak. ‘Jane, I know you have the performance meeting with the senior
team tomorrow. I’m not sure whether this will come up, but for us working in the branches
– and I heard in the call centre it’s the same – there’s a feeling that we’re losing focus on the
company objectives. We say we are a “members come first” organisation that needs to make
decisions and promote behaviours that are “in accordance with our values”, yet, when my
people question me on how to do their job better, or how well the Hartford is performing I
struggle to know what to tell them. We give the employees plenty of time by being on the
floor with them and hosting monthly group discussions. But, to be honest, without visibility
of any performance information I myself don’t know what I’m meant to be changing on a
day-to-day basis.’
Jane was taken aback by what seemed to be this strategic confusion from an expe-
rienced branch manager. Would it be worthwhile to address this point tomorrow?
Or would the CEO reply with his usual statement: ‘other businesses may have num-
bers; we have things to do first’? Yet Adam’s confusion had raised some important
points. Is the ‘soft-touch’ PMS approach being used at Hartford really working?
Also, are all employee voices captured? And is this lack of formal systems a really
good thing?

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