Changing Culture and Creating Consortiums as Key Ingredients in Hershey’s GBS Success

Let’s spend a minute on the softer side of shared services and sourcing: culture.  Putting leadership, time, and effort into changing behaviors continually increases the value of shared services and sourcing to the business, as discussed recently in an HfS Research-KPMG webinar, How to Fast Track Your Global Business Services Maturity Journey.

The webinar featured the example of the Hershey Company. A focus on culture has enabled: (1) the shared services organization to be increasingly valued and integral to the company’s long term success, and (2) the model to mature beyond shared services for a single function to end to end processes and integration with third party service providers as well.

Our research shows that in companies with more than $10 billion in annual revenue, over one-third want to be in a global business services model in the next couple of years. Changing behaviors to drive collaboration through trusted relationships is a critical ingredient.

It’s one thing to create a structure for shared services or global business services, but the real challenge is in changing the behavior of the leadership across the company. At the Hershey Company, Jeff Kemmerer, VP Global Shared Services, says,  “It starts with the culture we established in our shared services organization as being problem solvers not just transaction executors.” A+B=C transactions have been automated, or moved to the hands of a third party that can do them more cost effectively with high quality. In the five years since it launched global business services, the centralized team has proven they know how to take issues and solve them, partner across internal and external units, and get value out of streamlining the activity. The key partners in the effort are the global process owners (GPOs) who are the interface from the business function to the centralized group.

This alignment has also forced people together to govern the shared services that would not have sat together previously because they were from all over the organization. There are now a handful of “consortiums.” For example, for order to cash, one person from logistics served as the point person from the business function to the shared services group. But, as Jeff notes, a person can’t set guidelines from logistics without consulting with the chief accounting officer regarding broader impact. As a result, the order-to-cash global process owner partners up with the record-to-report GPO in a consortium that has a joint interface to the global business shared services in order to re-think and plan the end-to-end process for results, versus addressing it by task or activity within a function. A similar consortium was created for consumer relations. No one person could own consumer relations interface to shared services because marketing, legal, corporate communications, and quality all have a stake in how the strategy is executed by Hershey’s GSS which took on, for example, customer master data management and analytics.

The success to date in changing the culture is one that is attributed by Jeff to the CEO and Chief Strategy Officer. They share the belief that they can further the corporate strategy faster if they can rely on the capability built in the business services organization. “It’s not easy,” says Jeff, “and it is a win one at a time, but comes down to trusted relationships. Nothing works perfectly and when things go wrong, you need CEO, CSO, and senior leaders to say… let’s not overreact. What’s our strategy, what were we trying to accomplish, let’s assess the facts and see how we are doing in moving down that path.”

While this example draws on the experience of global business services, the same principles can be applied in companies working with external service providers. The relationship will be a more valuable one if the company has a trusted relationship and a shared strategy for driving results, looks across the processes rather than piecemeal at the tasks, creates consortiums, and takes the time, when things go wrong, to step back, evaluate, and put in place a plan to move forward.