Global HR issues: an interview with Martin Moehrle
Interview by: Alistair Craven
From 2002-2008, Martin Moehrle was Chief Learning Officer, Global Head of HR Development and a member of the Global HR Committee at Deutsche Bank.
This role got broader over the years and together with his team, he managed all learning and development practices in the bank, be it on divisional, regional, or corporate level. Since he joined Deutsche Bank in 1994, Martin led many initiatives to help develop it into an agile, learning, global and diverse organization.
Before his career at Deutsche Bank, Martin worked with Simon Kucher & Partners strategy and marketing consultants. He completed an engineering and business degree at the Technical University of Karlsruhe and studied international economics and finance at the university of Paris (Pantheon-Sorbonne). He lectured management and marketing at Bielefeld and Mainz, and was Visiting Fellow in the PhD programme at the Wharton School of the University of Pennsylvania. He received a doctorate in business from Gutenberg University Mainz, and is a member of numerous advisory councils and boards of business schools and HR think-tanks.
He is now self-employed, working as a consultant for major international companies. He lives with his wife and two sons in Frankfurt.
AC: You were part of a working group looking at how to help the HR community around the world be better equipped to deliver high value under continuously changing conditions. Can you tell us about this project?
In early 2009, on the request of several of its members, ICEDR, a leading global network of corporations and business schools in the area of leadership, learning and talent management, carried out a study on the high value/ high flex HR team. The question at hand was how HR can best create value in the turbulent times we currently live in. Alongside colleagues from China, Canada and the US, I was member of this research team and, amongst others, conducted some 20 interviews.
In our research report we distinguish between three stages of HR value contribution:
- HR as service deliverer
- HR as strategy enabler
- HR as transformation agent
We found HR to be active predominantly at stage 1 with a focus on its contribution to the overall cost containment effort, however, with a limited industrialization of basic HR processes. In addition, HR could have been more creative and proactive when it comes to aligning to and executing strategy in this critical time and, more often than not, it was not ‘really at the table’. And despite the multitude of transformation programmes currently being executed, HR seems not to be a driver of many of these. However, there has been light and shadow and quite a few great cases to learn from.
AC: Generally speaking, what are the key challenges facing HR teams today?
The key challenge is not to be swamped by the pressures of the day and the speed with which businesses move on these days, but to actively liaise with managers and businesses, create transparency with easy to understand and relevant data, do workforce scenario planning, support change efforts and coach managers who struggle with it, secure open communication and fair play and develop overall an engaged workforce.
AC: What is your opinion on the often contentious issue of HR outsourcing?
HR’s identity is, amongst others, defined by securing work and employment, and this partially stems from its historic industrial relations role and tends to oppose the idea of outsourcing. In addition, HR has difficulty sometimes in applying a pure systems and process view to the operations of its service delivery, in fear of losing the human touch. However, there are many situations in which outsourcing parts of the HR value chain makes good sense. Either there is a scale effect which makes things cheaper, or one can variabilise fixed cost or tap into expertise in certain topical or geographical areas where one has been relatively weak.
“When revenues collapse and markets get unpredictable, management has no choice but to adjust the cost base and manage cash very carefully.”
Outsourcing large parts or all of HR will continue to be, in my eyes, a rare case, but outsourcing specific aspects of HR service delivery will continue to become the norm. Corresponding decisions, however, need experience and there has been some naivety in the past in how to solve all kinds of problems by just outsourcing them.
AC: Your research paints a pretty bleak picture of the HR area. For example, 70 per cent of companies were engaged in reducing headcount, 60 per cent had reduced training budgets, and 45 per cent had implemented a hiring freeze. Can you comment on the implications of these findings?
When revenues collapse and markets get unpredictable, management has no choice but to adjust the cost base and manage cash very carefully. Measures such as making staff redundant, banning their replacement or limiting discretionary spend such as travel and training expenses are part of the usual toolkit. You are right, this is not the dream scenario of HR people. Letting people go is highly emotional and stressful.
However, there have been many cases of creative cost reductions which helped to avoid layoffs, at least to a certain point, and to which HR has significantly contributed. HR has a role to play in managing the cost base, especially in service industries where compensation cost counts for half or more of total cost.
These tough times are also an opportunity for HR to partner even better with the line to secure tight performance management and to do more with a lighter training budget. For example, by engaging internal leaders and experts in the learning process and thereby moving learning back again to the reality of the workplace.
AC: You worked as global Chief Learning Officer at Deutsche Bank. Can you tell us about your challenges and experiences in this role?
The first five years were governed by the transformation of Deutsche Bank from a conservative, somehow aristocratic, hierarchical commercial bank with a German management and the large bulk of its revenues coming from Germany into a global, diverse, agile and learning organization with a strong capital markets orientation. Recruiting and bringing in a different kind of talent, facilitating growth overseas and increasingly in the Asia region, supporting the global integration of a so-far regionally run bank, the implementation of a matrix organization, driving culture change and the re-establishment of leadership unity were the name of the game. This was an enormously dynamic and perilous time that freed up lots of entrepreneurial energy.
The second half of my tenure centred around the professionalization and the lean management of a global L&D function overseeing an extraordinarily broad product range, including all learning, talent management, leadership and organizational development and diversity management, sharing a joint operational platform, learning from each other and yet at the same time very much aligning deliverables to the specific needs of the different globally run business divisions.
AC: What would you say was your biggest achievement in your role at Deutsche Bank?
In retrospect, I have fond memories of forming a global team that represented all dimensions of Deutsche Bank’s organization, i.e. global business divisions, geography and corporate (which normally are separate entities), and thereby to a considerable degree overcoming the inherent barriers to collaboration associated with more traditional structures.
AC: With regard to best practice in executive education, you note that we should try to “link individual with collective learning within real business context to drive knowledge, culture and change.” Can you elaborate on this?
In a zero change environment, the individual is the only ‘learning unit’ in the organization, passing on knowledge and skills from master to apprentice. Most training functions have been focusing just on this. However, the increasing rate of change triggers learning and adaptation needs for teams and businesses, and – later on – for the organization as a whole, culminating in corporate transformation initiatives.
Instead of having separate individual and organizational learning processes, I very much recommend an integrated effort, e.g. via action learning where organizational challenges are tackled in teams and in a reflective learning context. The outcomes of the learning process are enhanced individual knowledge and skills, organizational solutions and capabilities, and a culture of collaboration. The best place to start with this, and sometimes the only place where this makes sense, is executive development.
AC: An article in The Independent newspaper stated that “Deutsche Bank, in particular, has felt the sting of talented employees leaving to carry on learning, only to join another company later.” Is this a common problem for learning organizations in general? If so, what do you think can be done about it?
This is certainly an issue for intellectual capital-rich industries. We had quite a few colleagues join us as undergraduates to leave after a few years for graduate studies. This bleeding is regarded as somehow normal in the industry, as long as it is not beyond standards. It didn’t trigger too large a lament.
“A strong culture guides behaviours by setting clear expectations. And strong cultures attract and retain talent that fits, and they drive performance.”
However, it does mean writing off the investments in the growth of the respective associate and with the most talented of them, it hurts. Therefore, specific career management initiatives such as mentoring, mini-MBA programmes or an intensive continuous education effort have been initiated to signal to the respective cohort at risk that staying at the bank is as good or better a choice than going for MBA studies. One has to recognize, though, that if all top jobs are occupied by MBAs and Ph.D.s, this leaves second thoughts. Alternatively, one can keep in touch with the alumni and maybe recruit them back later in their careers.
AC: We hear the term “global leadership” a lot these days. In your opinion, does the term have any real and tangible meaning?
The notion of global management emerged in the early nineties to describe a new form of organizational design: the hitherto multinational corporation had strong and independent operating units with rather limited lateral connectivity throughout the company. The globally integrated company, however, leverages its resources and talents increasingly across the enterprise, sharing systems, processes and strategies. The matrix organization emerges and so far independent managers find themselves more and more interdependent. This ‘internal globalization’ of organizations has significant implications for structure, culture and management practices. However, in the past decade or so, the word ‘global’ got so much overused that it lost almost entirely its meaning. In my opinion, the original concept remains highly relevant though.
AC: In a discussion about the global corporation, you note that “corporate culture has to be defined more broadly and to become more independent from culture attributes of a home market.” What exactly do you mean by this?
The classical multinational corporation has been operating around the world, with the country organization as a pretty autonomous entity governed by a remote head office that, again, has been largely staffed with colleagues from the home country. The talent pipeline doesn’t represent the diversity of the worldwide staff but more or less the home country only, as does top management. The corporate culture is defined by cultural norms of the home market. However, local cultures can vary significantly and normalization happens at the senior management level only.
With the a.m. trend toward global integration, the workforce at large will experience cultural diversity on an ongoing basis, not only senior management as in the past. This gives way to the emergence of a meta-culture which reflects the richness of the various national and business-specific cultures within the enterprise. Many organizations have embarked at such point on an inclusive process of articulating their core values, as a foundation of a renewed culture permeating the whole enterprise. However, this doesn’t mean that organizations should deny their roots as it would only diminish their brand potential and, if one thinks about it, their integrity.
AC: Can you give us your definition of culture in a corporate context? How important is the concept of culture across a global organization?
To put it simply: culture stands for how things are done in a certain social system such as a corporation. Culture is shaped by the personality of the company’s founder, by management practices, by its mission and by industry-specific patterns. Insiders might not realize any more the specifics of their company’s culture, but new joiners do.
A strong culture guides behaviours by setting clear expectations. And strong cultures attract and retain talent that fits, and they drive performance. If management and staff go the extra mile and believe self-confidently in their mission, then this is for sure driven by a strong performance culture. When the competitive context changes, then a culture needs to adapt. What to preserve and what to refresh is then one of the major challenges of top management.
The concept of culture is as important in a global context as it is on a local level. However, it is more complex: one finds much more cultural diversity and the challenge is now to make diversity a source of inspiration and identity. This implies respect, curiosity and a certain tolerance for ambiguity.
AC: Finally, are there any closing comments you wish to make?
Since quite some time, the rising importance of intangibles and the coming of the knowledge society have given way to the idea that the management of talent and human resources will become a differentiating force and as a consequence, a mature or even a scientific profession. So far, HR has not yet risen to the challenge. But I believe in the trend, not necessarily however, in that the HR function of the future will continue to look as it does today.
Global HR issues: an interview with Martin Moehrle