Breaking down hierarchies
Getting employees back onside was the first major challenge for Deputy in an organisation where morale was low and frustration was high. “There was this parent/child-style relationship going on between the executive suite and the rest of the organisation, where people were constantly told ‘everything is fine’,” she says. “Employees thought Aviva was doing really well so they were shocked to find out that wasn’t the case. There were some really big holes we needed sorting.”
The company had already undergone a major cost-cutting operation in 2012, prompted by the arrival of chairman John McFarlane, who came in and “shook the foundations” of Aviva by making significant changes to the executive team.
A more streamlined employee structure was implemented, which resulted in no employee being more than seven layers away from the CEO. But this, says Deputy, left an organisation clueless on how to operate in this new way. “We had to keep cutting as we hadn’t got what we needed in order to deliver our promise to the investment community, but within that we needed to find a way to work better together,” she says.
While Aviva was effective from a front-line perspective and had developed strong customer relationships, there was an acknowledgement among the leadership team that the organisation needed to become more functional – with the right culture underpinning it. “We knew that we couldn’t continue if we didn’t sort it out,” she adds.
CEO Mark Wilson – who had been appointed in January 2013 – quickly announced plans to eliminate 2,000 jobs, cut the dividend by 44%, freeze bonuses for 400 managers and sell off or reorganise units. He subsequently challenged the executive team to oversee and implement a people thesis, customer thesis, investor thesis and a distribution thesis.
Deputy was tasked with the people thesis, and needed to come up with an operating model which would align with the new commercial reality that Aviva was dealing with – and deliver a much leaner, faster-moving, less bureaucratic organisation.
“In the first year, we spent a lot of time working out what we stood for – we had to reconnect with customers and employees,” she says. “We listened to them, gathered feedback on Mark, the group executive and the organisation, so we could understand how people saw us and our decisions.”
And feedback was intense. “People said: ‘we don’t know what you’re doing’, ‘we don’t trust what you are doing’, ‘we have no idea what the strategy is,’ ‘we don’t feel part of a global organisation’,” she reveals. “A significant amount of hard truths came out, and it was tough.”
Indeed, the numbers were not pretty. Engagement was at 56% and trust in executive leadership had plummeted to just 48%. Coupled with that, the share price had dropped to 373p. And for an organisation where business is built largely on the strength of front-line relationships with customers, something needed to be done – and quickly.
Stripping the organisation back to its roots was key for Deputy. “I started with a 300-year-old business which had been built on myriad acquisitions and mergers. We had to start our operating model at the customer and get the leadership team to build the story.