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Human Resource Management in Times of Change.

Human Resource Management in Times of Change. Dr. Schmidt-Reintjes, BMW Group. Agenda. BMW Group – A history of change and challenges How is change managed at BMW Group? Discussion / Q&A. BMW Group. Overview. BMW Group. Cars BMW, MINI, Rolls-Royce. Motorcycles. Financial Services.

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Human Resource Management in Times of Change.

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  1. Human Resource Management in Times of Change. Dr. Schmidt-Reintjes, BMW Group.

  2. Agenda. BMW Group – A history of change and challenges How is change managed at BMW Group? Discussion / Q&A

  3. BMW Group.Overview. BMW Group CarsBMW, MINI, Rolls-Royce Motorcycles Financial Services

  4. BMW Group. Global Vendor of Premium Vehicles. Locations in Germany Production Plants CKD Plants R&D Joint Ventures

  5. BMW Group.Annual Comparison 2005 to 2009. 3rd Quarter 2010 Profit before tax 3.166m EUR

  6. BMW Group.A short history of change (1/2). • 1917: Foundation of BMW GmbH as a limited company. Registration of the white-and- • Blue logo as the Company‘s official trademark. Production of the first aircraft engine. 1923: Developed within just a few weeks, the R 32 motorcycle hails the advent of BMW‘s great tradition in the two-wheeler market. 1928: Taking over Fahrzeugfabrik Eisenach, BMW enters the car business (Dixi). 1945: Following destruction and dismantling of its facilities, BMW starts to re-built in a very hard process. 1952-1955: Large saloons, coupés, convertibles and roadsters in the 501 – 507 model range continue BMW car production after the war, now for the first time at the Munich Plant. The BMW Isetta, BMW 600 and BMW 700 meet customer demand in the post- war years 1959: At the Annual General Meeting on 9 December 1959, small shareholders and Dealers prevent the company from being sold off. With BMW thus making a new Start as an independent mobility enterprise, Dr Herbert Quandt becomes the Major shareholder. 1962: BMW successfully makes its way out of the crisis with the sporting and compact midsize New Class Saloons.

  7. BMW Group.A short history of change (2/2). • 1972: The new Headquarter designed by Professor Karl Schwanzer is completed • For the 1972 Olympic Games. To this day the Four-Cylinder Building characterizes • the Munich skyline. 1986: The new Research and Innovation Centre (Forschungs- und Innovationszentrum, or FIZ) is built near the Group Headquarters and the Munich Plant. The FIZ is the hub of the Group‘s global research and development network. 1992: BMW AG took the decision to built a car production plant in the USA: the Spartanburg Plant. 1994: Purchasing Rover Group Ltd with its main brand ROVER, LAND ROVER, MG and MINI, BMW AG enters new market segments. 2000-2007: “Rover Demerger” and concentration on premium segments with the BMW, MINI and Rolls-Royce brands. 2007: “Strategy Number ONE” and new mission towards a sustainable economic management. 2008/2009: Mastering world financial and economic crisis. 2010: Strong growth in BRIC markets, record performance on operating level. 2011ff. More to come…

  8. BMW Group. Strategy Number One has raised the necessity for continuing change. Annual Report 2007

  9. BMW Group. New challengesandneeds for changeareunderway… Challenges and trends External challenges Market, customers und competitors • Shortage of raw materials • Tighter legislation • Changing values • Mega-cities • Demographic effect • Sustainability • Economic developments • Capital market • Growth in premium segment • Opening up new customer segments • Differentiation and individual mobility • Product differentiation • Downsizing/Downgrading Internal challenges Innovations and targeted business model design • Efficiency and profitability • Demographic effects • Discernible customer benefits • Partner management • Changes to sales channels • Service and after-sales business

  10. Changes in emissions legislation.CO2 regulations becoming much stricter worldwide. Gewichtsklasse, Hubraumklasse) Japan EU 27 China USA CO2 Group fleet 2008 2010 -10% -10% by2015 • 5% • to-20% > -20% -20% -25% as of 2013under discussion as of 2015 • 25% • to-30% by2016 -30% as of 2020

  11. Customer requirements.Understanding future customer requirementswill demand a more international approach.

  12. Agenda. BMW Group – A history of change and challenges How is change managed at BMW Group? Discussion / Q&A

  13. Implementation Want Can Unfreeze Leader-ship Sustain- ability Know May Analysis Leading Change – Situation Analysis. Factors of success in the change process. Alignment of managers Reward /Sanctioning Enabling Mobilisation Resources Communication Dialogue Structures Processes Guidelines Outward Orientiation • BMW‘s Change Model is based upon • Concrete experience in BMW change projects • Kotter (1997) Leading Change • Results of empiric research to Change Management by Cap Gemini (2005) / TU München (2006) Change Objective Basic Principles Strategy Content Challenges

  14. Leading Change – Situation Analysis. “Ability to change and implement.”* Change of company Change of individual 1. Company’s Change requirements: Conviction that company must change. 2. Company’s Vision: Support for the company’s future vision of itself 3. Company’s transformation plan: Knowledge of an adequate plan for conducting the change 4. Company’s performance: Trust in the company’s ability to change 5. Leading and Advice: Conviction that practical change support will be given Push Factors Pull Factors Path Factors Energy Factors Engagement Factors 6. Personal wish for change: Ambition and readiness for personal change 7. Personal match of values perception that personal and company values are matched 8. Personal transformation plan: Knowledge of an target oriented plan for personal change 9. Personal efficiency: Trust in the individual ability and energy to change 10. Integration and participation: Perception that one is part of the company’s change activities Binding Processes *for self-study Source: Harvard Business Review, Cracking the code of Change, May (2000)

  15. Leading Change – Change progress and implementation. Change direction is determined by the change concept followed. high Change Map Securing survival Crisis Management/ organizational restructuring Radical repositioning Strategic turnaround/organizational redesign Renewal Growth potentials Current necessity for change Learning organization Market responsiveness Mobilizing Adaptability and developmental capacity low Change capability/readiness high Source: Doujak, Corporate Development

  16. 5 Leading Change – Change progress and implementation. Leaders in the role of Change manager. Personally perceived competence for change 7. INTEGRATION …of successful processes and behaviours in ones own active repertoire False sense of security; exaggerated view of own process and behavioural competence 2. DENIAL 3. RATIONAL INSIGHT …that new processes and behaviour are necessary 6. RECOGNITION …why certain processes and behaviours are successful, and others not 5. TRIAL AND ERROR Trying new processes and behaviours: Successes – Failures – Confusions - Frustrations 1. SHOCK Major discrepancy between own and others‘ expectations, and actual reality …of reality; letting go of old processes and behaviour 4. EMOTIONAL ACCEPTANCE Time INFORMATION COMMUNICATION QUALIFICATION COACHING MONITORING Source: Change Works

  17. Change Competences – HR perspective. Changed competence needs on a corporate level are broken down to the level of individual employees and realized. Competence On a corporate level, competence means necessary abilities of the enterprise which ensure current and future success in business. On the individual level, competence means usable abilities, skills and knowledge which employees are able to use to contribute to the achievement of corporate requirements and targets in the degree expected. ? Strategic and operating Competence Management The more change is necessary, the more HR processes need to work hand in hand and in a larger context to deliver expected results.

  18. How can competence be structured?One proposal among many. Top Level Job Families Job Families Overall Competence Level General Job Profile Detailed Job Families Personal Skills Functional Skills Specific Job Description Skill level Functions, Technologies, Services, Products, Markets, …

  19. Change Competences – HR perspective.A process to propagate change from corporate down to employee level was successfully piloted in a division of BMW. Strategy Direction of inhouse vs. external service provision Financial and employee headcount planning Consistent development targets and general framework Challenges Strategy and Long Range Planning Critical tasks Resource allocation ? Development/ business plans Detailed plans Decomposition to departmental level Business division development General framework Target state, measures Competence increase / decrease / change Required Competence Consistent competence catalogue Targets for change in competence Adequate qualification budget HR processes All relevant HR processes need to be aligned to pursue targeted changes in competence EmployeeCompetence covered / potentials for coverage Multi-year competence requirements on a departmental level Competence Management Individual skills in relation to existing / new position Skills relevant for specific job profiles / for specific positions

  20. Change Competences – HR perspective. Complementary to this top-down approach, possibilities are currently investigated to strengthen employee self-organization and responsibility. Daily needs of employees and supervisors Synergy potentials of an internal Social Network Easy search of expert knowledge and transfer, identification of candidates for new areas / shifting employment focus. Future contact point for structured competence management. Strengthening of networks / self-organization / change in habits. Spread of knowledge to groups instead of focusing on few experts. Efficient co-work, savings in time spent, increased quality. Reproducible exchange on parallel topics as part of daily work. Transparency across countries and time zones. Find or found by myself professional topic groups Find experts / co-workers or be identified as an expert or as a contributor myself. Work on professional topics together, deliver individual contributions. Stay informed on any topic of interest / adapt my interests as needed.

  21. It is People who will make the Change work.Thank you for your attention.

  22. Agenda. BMW Group – A history of change and challenges How is change managed at BMW Group? Discussion / Q&A

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