S04 HRM HRTransformation tsmc

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Published on January 22, 2008

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Slide1:  HR Transformation @tsmc - The Journey Covered and The Lessons Learned S. H. Lee shlee@mx.nthu.edu.tw leesh@alumni.standfordgsb.org Slide2:  Part I Background TSMC in Brief:  TSMC in Brief Founded in 1987, the first and the largest pure IC foundry in the world IPO in Taiwan Stock Exchange in 1994 The first Taiwan company listed on NYSE (ADR, 1997) The first Taiwan company to transfer technology to and built a wafer fab in the U.S. CEO Dr. Morris Chang was selected as one of the “Top 25 Managers of the Year (1997)” by BusinessWeek BancAmerica named Dr. Morris Chang one of the most significant contributors in the 50 years of semiconductor industry TSMC Changed the Rules of Semiconductor Industry:  Integrated Device Manufacturers Fabless Design Houses Foundry Assembly & Testing Design Wafer Fabrication Assembly and Testing Design Wafer Fabrication Assembly and Testing Marketing and Sales Marketing and Sales TSMC Changed the Rules of Semiconductor Industry Slide5:  Diverse Customer Portfolio Fabless Design Houses Integrated Device Manufacturers System Companies Slide6:  TSMC Worldwide 1998 Slide7:  Core Strategy Premium Services at Premium Prices Vision To be the most reputable, service-oriented and maximum-total-benefits silicon foundry in the world, and thus earn the reward of being also the largest and most profitable. TSMC Vision TSMC’s Business Principles:  Integrity Focus on core business -- IC foundry Globalization Long-term vision and strategies Treating customers as partners Building quality into all aspects of our business Unceasing innovation Fostering a dynamic and fun work environment Keeping communication channels open Caring for employees and shareholders, and being a good corporate citizen TSMC’s Business Principles Business Results 1993 ~ 1998:  Business Results 1993 ~ 1998 93‘~98’ CAGR = 26% 93‘~98’ CAGR = 30% 93‘~98’ CAGR = 32% 93‘~98’ CAGR = 21% People Productivity 1993 ~ 1998:  People Productivity 1993 ~ 1998 Slide11:  TSMC Market Cap Slide12:  Employee Survey on Business Principles - 1998 A:Integrity B:Maintaining a Consistent Focus on Core Business : IC Foundry C:Globalization D:Long-term Vision and Strategies E:Treating customers as partners F:Building quality into all aspects of our business G:Unceasing Innovation H:Fostering a Dynamic and Fun Work Environment I:Keeping communication channels open J:Caring for employees and share holders and being a good corporate citizen K:Employee engagement(No 1998 data) TSMC People Profile 1998:  TSMC People Profile 1998 Total Employees: 5908 Average Age: 29.7 By Job Function By Age By Education By Organization Slide14:  Administrator, Gate-Keeper, Controller Bureaucratic, passive, no credibility, lack confidence, slow & easy, dumping ground Functional Organization 1987 ~ 1998 HR Productivity & People Profile -’98:  HR Productivity & People Profile -’98 Major Business Challenges:  Rapid growth - Speed, Size, Complexity Attracting and developing talents Steep competition Manufacturing orientation to Service orientation Keeping core value and culture Managing through alliance, JVs, M&As Build vs Buy Future challenges are different from past success People Management and Development Major Business Challenges The New HR VP - Aug.‘98:  44 years old, male, Singaporean Just completed EMBA (Sloan Fellow) at Stanford University (97/98, California) No previous HR background Previous experience Regional VP, Asia-Pacific Lucent Technologies (94-98, Hong Kong) General Manager, Greater China, Polaroid (91-94, Hong Kong) Country Manager, China, GE Medical System (89-91, Beijing) Regional Sales Manager, S/E Asia, Du Pont (81-89, Singapore) The New HR VP - Aug.‘98 Slide18:  Part II The Journey of Transformation Slide19:  Virtual Professional Services Company Managers are partners investing own money TSMC the only customer Total HR services & solutions Must add value: Better, Faster, Cheaper, Easier 6 months Termination Clause on service contract Customer Orientation Service Orientation Business Orientation Sense of Crisis & Urgency “HR PS Inc.” - Aug.’98 Slide20:  Decentralized Organization - Jan.’99 Slide21:  Premium Services at Premium Prices World class HR for World Class TSMC with World Class People TSMC Vision To be the most reputable, service-oriented and maximum-total-benefits silicon foundry in the world, and thus earn the reward of being also the largest and most profitable. From Company Vision to HR Vision Slide22:  Challenging Journey Slide23:  Strategic Partner Service Provider Change Agent Employee Champion Administrator Gate-Keeper Controller Cultivating new mindset Building new capability & capacity Repositioning HR ADMINI- STRATION PLAN & STRATEGY DESIGN & EXECUTE SOLUTIONS HR Mission:  HR Mission To realize TSMC’s vision, values, and business objectives by partnering line managers in building our organizational capabilities and in engaging our employees. Linking HRM to Business:  Linking HRM to Business Slide26:  HR/ Line Managers Partnership DAY-TO-DAY / OPERATIONAL FOCUS PROCESS PEOPLE FUTURE/STRATEGIC FOCUS Social Contract:  Social Contract Open & Constructive Communication We will communicate honestly, openly and directly to each other. We support each other with coaching and constructive feedback. We will not involve unrelated third parties unless they have a need to know or can help in resolving the problem. We will not participate in rumors, gossips or office politicking. Commitment & Accountability We honor our commitments to each other and to our customers. We take personal accountability in meeting every commitment unless they are renegotiated. We believe that missing commitment is an irresponsible and unacceptable behavior that will hurt both personal and team credibility and effectiveness Continuous Learning & Innovation We are committed to continuous learning and innovation, individually and collectively. We value new and diverse ideas and encourage ‘out of box’ thinking Striving for Excellence We strive to do the right things right, with the right people. We set high standards with the focus on end results and adding value for our customers. We take personal initiatives and constantly look for opportunities to improve efficiency and effectiveness Building a High-Performance Team We strive to be a High Performance Team with stretched goals, effective execution, individual excellence and mutual support. We will break down walls and barriers that obstruct teamwork and cross team collaboration. We are committed to individual accountability and in shared leadership responsibility. We treat each other with trust, respect and care Slide28:  e-HR Platform - Jan. ‘99 HR Camps For HR Managers:  HR Camps For HR Managers Teaming Up Blue Print for Transformation Visioning for Y2000 Building HPT Building HPT Business is our Business HR Next Transformation May.1999 Nov.1999 Jun.2000 Nov.2001 Mar.2001 May.2002 Dec.2002 HR Next Transformation Aug.2003 nderstand lign ommit Slide30:  Commitment on vision, mission and social contract Cultivating new mindset Teaming up Teaming Up - May ‘99 Slide31:  Blueprint for HR Transformation - Nov. ‘99 Dissolution of Traditional HR Dissolution of Traditional HR 1 HR Servicing Line Organization HR Servicing Line Organization 2 Performance Consulting Performance Consulting 3 Managing People Asset Managing People Asset 4 1.1 HR Self-Service Delivery System 1.2 Centralized Call Center 1.3 HR Event Re-engineering Outsourcing 1.4 Activity-Based Costing 1.5 Strategic Vendor partnering 1.6 Vendor Management Service Provider Orientation 2.1 HR Account Representative 2.2 HR Strategic Account Plan 2.3 HR Product Development & Life Cycle Management Business Orientation 2.4 Value Creation and Cost-Value Analysis 2.5 Understanding Customer (internal & external) Needs and Expectation 2.6 ROI and Productivity of people Asset Organization Effectiveness & Development 3.1 Team Effectiveness Assessment & Audit 3.2 Organization Culture 3.3 Teambuilding and Organization Development Performance Consulting 3.4 Individual Development & Career planning 3.5 Organization & Succession planning 3.6 Integrated Internal Consultancy Knowledge Management 4.1 People Asset “ yellow Page” 4.2 Knowledge Transfer Engineering 4.3 Organizational network Mapping People Asset Strategy 4.4 Core Competency Management 4.5 People Asset planning & accounting 4.6 Asset Manager on Human Capital Self-service employees & managers Slide32:  10 Business Principles Personal Attributes Working with Partners Leadership Attributes Making Things Happen Business Orientation HR Competency Model - Nov. ‘99 Slide33:  Merging WSMC & TASMC - Jan. ~ Jun. ‘00 Double Headcount from 7400 in Dec. ‘99 to 14,600 in Dec. ‘00 Merged 3,000 people + Hired 5,000 people Keeping core values & culture with more new than old employees 3 HR Teams, HR policies and practices, payrolls, …. First M&A in TSMC HR Team still in storming phase Low morale, confused, stressed, … extremely high pressure Slide34:  VP HR Account Service Account Manager Operations Account Manager R&D Account Manager WWMS Account Manager Q&R Account Manager Corp. Functions Overseas Operations TSMC NA TSMC Europe TSMC Japan WaferTech Integrated Organization - Jul. ‘00 Slide35:  Metrics and Measurements Social Contract and Team Norms Stretched goals & strategic focus Excellent Execution & change management Mutual support with trust, care & respect High Performance Team Initiative, ownership & Individual Excellence Customer centric Building High Performance Team - ‘01 Slide36:  Model on Leveraging People Asset - May ‘02 Slide37:  Above the line (Billable) Line Managers HR Talent Recruiting and Assimilation Process Talent Development Process HR service product development and marketing process HR Effectiveness - people development & engagement process - knowledge development & management process Below the line (Not Billable) Engagement Process HR/Line Engagement Process - May ‘02 Corporate Transformation - Oct.’02:  Corporate Transformation - Oct.’02 1. 企業願景 (使命感) Corporate Vision (Missionary Zeal) 2. 企業價值觀 Corporate Value 3. 商務流程暢通化 Business Process Effectiveness 4. 流體組織 Fluid Organization 5. 客戶導向 Customer Orientation 6. 動態管理 Dynamic Management 7. 要求創新 Strive for Innovation 8. 要求主動 Strive for Initiatives 關鍵要素 Critical Elements TSMC Vision - Updated Oct. ‘02:  TSMC Vision - Updated Oct. ‘02 “Our vision is to be the most advanced, innovative and largest provider of foundry services, and in partnership with our customers, to forge a most powerful force in the semiconductor industry. To realize our vision, we must be: (1) a technology leader, competitive with industry leaders, (2) the manufacturing leader, (3) the most reputable and service-oriented; and the greatest total-benefits provider.” Slide40:  Evaluation & Reward Orientation & Assimilation Deployment Commitment & Engagement Business Results People Process Customer Financials Vision/Strategy/Culture Business Requirements Talent Requirements Attraction of talent Potential Employees Development People Management Process - Dec.’02 Line Manager/HR Partnership Slide41:  Threats Lack of HR talent Talent retention Managing stress Opportunities Line/HR job rotation Young talent liberation More line manager ownership Weaknesses Low business acumen among HR managers Too “activity-focused” - need to be more strategic Too many initiatives - need to prioritize and focus Strengths Committed and high-energy team with service orientation Very strong “learning” and “doing” team culture One of the best HR team in Asia HR Organization SWOT- Dec. ‘02 HR Next Transformation - Dec. ‘02 Do the right things right with the right people:  HR Next Transformation - Dec. ‘02 Do the right things right with the right people Change Agent Performance Consulting People Engagement and Manager Quality People Asset management Employer Branding Execution Excellence Our mission is to support the realization of TSMC vision Slide43:  Transforming Organization DNA Slide44:  Managing Productivity During Change HR Services HR(A) Recruiting, Staffing, Compensation & Benefits, Learning & Development, Employee Relations, EWC New HR(A1) Business HR/Account Services including Organization Development, Leadership development, HR Information System. ES(B) Janitor/Dispatch/Dormitory/Canteen, Nurses and Reception Wellness program, in-house clinic, Call Center New Value Added Services ‘98-’03:  New Value Added Services ‘98-’03 Leveraging TSMC ‘brand’ and ‘size’ to attract new service partners with very low or zero company funds 7-Eleven Starbucks Medical and Dental Clinics Laundry services Bill payment services Travel Services Improved Cafeteria services Discounts from many stores, restaurants, ... Slide46:  HR Service Survey ‘99 ~ ‘03 Slide47:  對主管看法的平均分數 對同仁看法的平均分數 HR Social Contract Survey - 1999 ~ 2003 註: 1. “對主管的看法“2003下降項目: “追求卓越、精益求精” 2. “對同仁的看法” 2003下降項目: “追求卓越、精益求精”及“不斷學習、持續創新” Slide48:  Employee Survey on Business Philosophy A: Integrity B: Maintaining a Consistent Focus on Core Business : IC Foundry C: Globalization D: Long-term Vision and Strategies E: Treating customers as partners F: Building quality into all aspects of our business G: Unceasing Innovation H: Fostering a Dynamic and Fun Work Environment I: Keeping communication channels open J: Caring for employees and share holders and being a good corporate citizen Slide49:  Best Employers in Asia - 2001 Top 5 in Taiwan 70 73 69 92 57 42 61 77 78 35 77 79 66 90 64 60 67 80 78 53 59 65 45 77 51 44 52 68 70 46 0 10 20 30 40 50 60 70 80 90 100 Engagement Work Environment Pay & Benefits Purpose Opportunities Work Activities Senior Leadership Managers Co–Workers Work/Life Balance Percentage Slide50:  Best Employers in Asia - 2003 Top 20 in Asia, Top 5 in Taiwan TSMC Best Employers in Taiwan Best Employers in Asia Slide51:  Taiwan's Most Admired Company - 6 Consecutive Years 1997 to 2002, Commonwealth magazine TSMC ranked first in 8 categories: - Vision - Customer centric products and services - Financial capabilities - Attract and develop talents - Effective use of technology and information - Global management - Long term investment value - Corporate citizenship Taiwan’s Most Preferred Employer By College Graduates 2002, Global View magazine Most Admired Company Business Results 1993~2003 fcs.:  Business Results 1993~2003 fcs. 93‘~98’ CAGR = 26% 93‘~98’ CAGR = 30% 93‘~98’ CAGR = 32% 93‘~98’ CAGR = 21% 98‘~03’ CAGR = 28% 98‘~03’ CAGR = 22% 98‘~03’ CAGR = 21% 98‘~03’ CAGR = 25% Slide53:  TSMC Share Price Slide54:  TSMC Market Cap NT$Bn TSMC’s Growing Market Share:  TSMC’s Growing Market Share WW Pure Foundry Industry by Revenue 2002 $8.12 Billion TSMC 57% Chartered 6% UMC 27% 2001 $6.97 Billion TSMC 54% Other 10% Chartered 7% UMC 29% Other 10% Slide56:  TSMC Worldwide 2003 People Productivity -1993~2003:  People Productivity -1993~2003 TSMC People Profile - July 2003:  TSMC People Profile - July 2003 Total Employee: 15,505 Average Age: 30.3 Passing The Torch - Aug. ‘03:  Passing The Torch - Aug. ‘03 The HR VP handed over to his successor What are the major anticipated Challenges and opportunities? What would you do if you are the new HR VP? What would you do differently if you have the chance to re-start the journey again? What were the major lessons learned along the journey? Slide60:  Part III The Lessons Learned Slide61:  The Change Process - Managing the Present from the Future Visioning Mobilize Diagnose Design Plan Execute - Break - Build Measure Review Communication Motivation Managing Contention nderstand lign ommit Purpose Desired Outcome Actions & Actual Outcome Milestones Management Slide62:  Confusion Curiosity Results Unconsciousness Denial Certainty Righteousness Time True competence Practice & Feedback Experimentation* * Method of Experimentation Establish premise/hypothesis Design & conduct experiments Make observation & gather data Analyze data & reach conclusions Apply conclusions to real issues Discovery  Insights The Learning Curve Slide63:  The Continuous Renewal Process Success becomes the engine of failure Initiate change or force to change Deep change or slow death Results Time Slide64:  The Revival of the Fittest 成功不墜, 最適者生存 Relationships 關係 Culture 價值 Resources 資源 Success Formula 成功方程式 Strategic Blinders 眼罩 Processes Constraints 例行作業 Culture Constraints 價值 Resources Constraints 重擔 Active Inertia 行動慣性 Strategic Frames 架構 Processes 流程 Relationships 關係 Culture 價值 Resources 資源 Relationships Constraints 桎梏 Source: Donald N. Sull, The Revival of the Fittest Slide65:  Key Challenges of Transformation Developing shared vision and values Aligning with key stakeholders Mobilizing and allocating resources Building a real team Overcoming inertia Acting with courage and virtue Gaining credibility, confidence, and trust Focusing on fundamentals Acquiring new capability and capacity Maintaining motivation and momentum Managing priorities and focus Managing conflict and contention Ensuring continuous renewal Rome is not built in a day:  Rome is not built in a day Chicken and egg The fly wheel You need …:  You need … Vision and Courage to initiate change Wisdom and Discipline to execute change Determination and Endurance to sustain change Transformation:  Transformation A butterfly is not a better or improved caterpillar, it looks and feels completely different, and has completely new capabilities The new capabilities liberate and free the creature from the world of the caterpillar to the “new” world of the butterfly The vision of change is always beautiful and exciting, but the change process is messy and painful, and takes a lot of passion, courage, determination and wisdom. But the benefit and satisfaction of “Discovering a New World” makes all the effort and sacrifice worthwhile. Questions …?:  Questions …? …Thank you !! S. H. Lee leesh@tsmc.com leesh@alumni.standfordgsb.org

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