In the world of IT solutions, compatibility is key. Kevin Pennington, executive vice president of HR for Fiserv Inc., realized this when he joined the information management and electronic-commerce systems provider and found it a complex enterprise of more than 70 component companies with proprietary products and a culture of competition. Achieving a balance between assimilation and recognition of the businesses that built Fiserv into a $4.5 billion company, Pennington introduced enterprise-wide values in 2009.
What was the Fiserv culture like before you implemented enterprise-wide values?
Kevin Pennington: We used to be an autonomous set of 77 companies made up of more than 150 acquisitions. The business units did what they needed to make a profit but didn’t care if they were competing with sister companies. Independence and self-reliance are some of our strengths, but were also hindering the way we worked together, so the challenge was to shift how we collaborated without losing those strengths. We began by refocusing our portfolio on financial services and technology, and dropping health care and insurance solutions. Then we took a cohesive approach to our company culture through a focus on new enterprise-wide values.
How did changes in your industry affect your decision to unify the companies?
Pennington: After 26 years of double-digit earnings per share growth, we owe our tradition of high performance to financial solutions, driven by an analysis of our markets and where clients needed us to be. They needed us to reduce costs and, since the crash in 2008, our clients have been under pressure to increase revenue. We shifted our business to align specifically to these market demands with integrated solutions that support the reinvention of the financial-services industry.
What guiding principles helped you develop the enterprise culture?
Pennington: We wanted to maintain a focus on the client and improving the experience of our clients’ customers experience. That starts with knowing the client’s business and what role Fiserv can play in improving performance. Finally, we wanted our leaders to drive the culture by demonstrating and expecting accountability, collaboration, courage, engagement, and execution.
What challenges did you have to overcome?
Pennington: Most of our people grew up in start-up or highly entrepreneurial environments that were very focused, self-contained businesses where they could talk to whomever they needed by walking down the hall. Now the organization has become more complicated because of the interdependency demanded by our clients. It’s a bit like an interstate highway system. When each company had its own infrastructure, or “highway,” it could design products to work on those channels. Unifying requires products and people to think, work, and act differently across businesses. Technology is helping us to speed that transition, but it’s an evolution, not a revolution, because the cost, complexity, and risk to do so are high. We also have to deal with those businesses we continue to acquire. It’s a little bit like fixing a flat while you’re going down the road. You have to transform the business without destroying your current strengths or affecting current performance.
What role did Globoforce play in the transition? How did its influence change employee recognition at Fiserv?
Pennington: Earlier this year we enhanced our recognition process. We had very few recognition programs that allowed peer-to-peer or peer-to-peers recognition, and nothing that allowed you to give an award to someone outside of your business. We created one inclusive, web-based recognition program that broadly promotes and acknowledges associate achievement of and commitment to all the Fiserv Values. With the establishment of this enterprise program, we promote recognition, equity, and consistency to help increase associate engagement and loyalty, which in turn enhances the company’s overall performance.
What systems have to be in place for a transition like this to be successful?
Pennington: From the top, leadership and governance have to drive engagement among employees. Objectives must be clear, from what you expect from your people to how they can achieve it. And there must be a focus on what differentiates the company and gives it a competitive advantage. For Fiserv, that’s the client experience.
Employees can only operate in an environment created by the top. We’re cultivating that environment through leadership training and development, coaching on a daily basis, and identifying and encouraging the behaviors we believe define a high-achieving team. Many of our employees have, for 25 years, been creating a financially vibrant business that they’re proud of. We wouldn’t be engaging them if we just treated everything they did to get us here as if it were wrong. We have to honor and respect their strengths and help people begin thinking about growth through deeper relationships with clients in addition to acquisition or new clients. We’re always looking to increase our market share, but people aren’t forming banks at the rate they once did, so the real opportunities for growth for us are with those clients we already have.
How would you advise other HR executives taking on a similar task of assimilating companies under a single culture?
Pennington: It’s a journey of successive phases, not an overnight transformation. You must find the strengths of your organization and leverage them for the future, keeping in mind they may need to be lived differently. Each business unit can maintain its own sources of uniqueness on the local level. What must be universal is the understanding of what practices and strategies will be beneficial to the company overall and a commitment to them by the component parts.