european reward conference 2017- "reward in fast changing environments" (breakout session)

Reward in fast changing environments

© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.

Tom Hellier and Carl Saunders

9 February 2017, Barcelona

Introductions

© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. 2

Tom Hellier

Director at Willis Towers Watson in London

GB reward practice lead

10 years with the company in GB, EMEA and Canada

Carl Saunders

VP, Rewards and Recognition

Coca-Cola European Partners

17 years with the company in GB, Belgium, Sweden and USA

What we are talking about today


Reward in fast changing environments

1 Setting the scene

2 Modernisation scenarios

3 Lessons learned – WTW and CCEP

4 Key take aways

Today’s fast changing environment is putting companies under increased pressure to modernise in

order to stay relevant


Disruption / transformation of work

AI – role replacement vs. role enablement

Economic volatility

Increased protectionism / ‘nostalgic nationalism’

Emergence of the ‘gig’ economy

Movement towards ‘agile’

More generations than ever before in the workforce

Ageing populations in most developed countries

New talentdynamics

Demographic

shift

Fast-changing

technology

Shifting

Political sands

Disruption of ‘traditional’ industries

Competing for innovation

Fast-changing

market

The modernisation agenda looks different from organisation to organisation but generally falls into

one of a handful of scenarios


Organic

Business

Spin

Merger

Acquisition

Alliance

Divest (sell)

Joint Venture

Refocus

Transform

Expand

Maintain

Strategy

Organic growth can be driven in a number of ways, each of which will have different implications for

reward


New products /

market

adjacencies

Stress on existing structures

and process

Geographic

expansion

Organisation-wide consistency

vs. country-specific needs

New business

lines / internal

“start-ups”

One size fits all vs. segmented

Strategy Reward implicationOrganic

Spin

Merger

Acquisition

Alliance

Divest (sell)

Joint Venture

Supporting organic growth means really understanding and aligning to key strategic business

priorities…


Innovation

• Tolerance for

risk taking

• Diverse

opinion

• Anticipating

future needs

• Recognition

of new ideas

• Leadership

vision

Customer

Service

• Information

sharing

• Team

relationships

• Customer

orientation

• Retention

• Push for

autonomy

Reputation /

Brand

• Embedded

brand

• Strong belief

in product

• Deep pride

• Consistent

employee

experience

• Cohesive

leadership

Quality

• Best in class

processes

• Best practice

exchanges

• Continuous

improvement

• Long-term

focus

Efficiency

• Clear goals

• Clear roles

• Data-driven

• Automation

• Cost

Reward programmes that encourage…

Employee

experience

Long-term

careers

Entrepreneuria

l spiritProductivity

Continual

improvement

…which will inform a flexible blueprint for the design of total rewards programmes


Business Priorities

Talent

Acquisition

Performance

Management

RewardCareer

Management

Succession

Planning

Workforce

Planning

HR Structure HR Technology Role of the Manager Change and

Communications

Two separate companies

B2B

Customer

focus

13countries

25,000employees

Bottling and

distribution, customer

marketing, market

execution and

innovation

590+Employees

100Years in

Western Europe

Consumer

focus

Brand ownership,

product development

and innovation;

brand marketing

and advertising

Transactions often have a more overt impact on reward but there’s no such thing as a standard

transaction


‘Complimentary’

Merger

Centralised vs. decentralised

design and governance

Acquisition of

competitor /

supplier (etc.)

To integrate or not to

integrate…

Diversification One size fits all vs. segmented

Strategy Reward implicationOrganic

Spin

Merger

Acquisition

Alliance

Divest (sell)

Joint Venture

Understanding the business drivers that underpin any deal is key…


Buying / Merging with Competitors Buying / Merging with Suppliers

• Expand geographically

• Gain market share

• Acquire people or technology

• Increase pipeline

• Reduce costs

• Secure raw materials/inputs

• Improve quality

• Reduce costs

• Acquire hard-to-duplicate assets

• Respond to deregulation

• Enter higher-margin industry segment

Diversification Buying Customers

• Balance market risks

• Expand product portfolios

• Enter entirely new businesses

• Integrate product line

• Own distribution network

• Freeze out competitors

• Reduce costs

• Improve identity/visibility

…and will determine the integration model and resulting HR and reward implications


Holding Company

Company A Company B

Company A Company B

Integrated new

company

Best of

company A

Best of

company B

Integrated new

company

Best of

company A

Best of

company B

External practice Preferred practice

Limited integration Dominant player absorption

Best of Both Integration Transformation to NewCo

““Coca-Cola” and Lippincot Ribbon is a registered trademark of the Coca-Cola Company”

The CCEP merger completed May 2016

““Coca-Cola” and Lippincot Ribbon is a registered trademark of the Coca-Cola Company”

CCEP in a nutshell

300million consumers

2.5 billionunit cases

sold annually

13countries

25,000employees

90%of products

made locally

ListedEuronext Amsterdam,

Euronext London, NYSE,

Spanish Stock Exchange

€11 billionnet sales

6,200sales force

Key takeaways


What looked good ten years ago probably won’t cut it today

5 Be prepared for flexibility

1

2

3

4

Change is happening – don’t let yourself be caught out

Understand where the business is heading and stay ahead

Planning for the long-term can be futile!