HR Management & Compliance

Innovation Inside and Out

By Craig Haydamack, SPHR

If you want to systematically deliver innovations that culminate in an inflection point, you cannot ignore your foundation. Without a proper base, your highest hopes, years of work and millions of dollars can be reduced to a cloud of dirt and debris so fast you won’t know what happened. Like many HR organizations, Intel’s HR team faces the challenge of driving innovation and service improvements while simultaneously controlling operating expenses.

Intel’s HR team supports more than 100,000 employees across 67 countries, as well as retirees and incoming job candidates. In addition to its strategic role in planning and supporting Intel’s business needs, Intel human resources delivers more than 5.5 million “customer experiences” per year, ranging from payroll, business travel and relocation to training, staffing, new-employee integration, employee relations support and intern programs.

To address these challenges, Intel human resources strives for inside innovation in its internal operations to free resources for outside innovation in the products and services it provides to Intel’s employees. Inside innovation feeds outside innovation.

Inside Innovation
Inside innovation focuses on the sustaining services and operations that human resources delivers day in and day out across the company. These functions include payroll processing, relocation support, business travel support, immigration, HR data management, training-course logistics, administrative support for hiring actions and general employee support. Our internal goals are to maintain greater than 99 percent “defect-free rates” for our services, customer satisfaction rates above 90 percent and costs at or below industry average benchmarks.

Intel estimates that the average HR organization achieves approximately 4 percent in efficiencies each year, so our goal is to reach 8 percent. This allows us to stay ahead of the industry cost curve and to free additional resources for reinvestment in new services each year. This business model has been so successful over the past five or so years that, in 2012, it led to the Intel Quality Award, which is the highest corporate award given to top-performing organizations. The award recognizes Intel teams that deliver plans effectively, take risks, continuously learn and consistently deliver extraordinary results.

To create an innovative culture that delivers results, Intel human resources has integrated a range of new employees from many different backgrounds: finance, sales and marketing, IT, information security, risk management, manufacturing, certified project management, user experience and Lean Six Sigma professionals. Blending the diverse skill sets with our existing HR expertise has helped to create an innovative, collaborative and effective team that can work together in tackling our toughest challenges.

Another big source of our inside innovation and efficiency has been our move to a shared services model. Since 2009, Intel human resources has developed shared service centers in Costa Rica, Malaysia and Poland and has successfully transitioned the sustaining support for more than 900 complex processes covering a range of functions, including payroll, relocation, staffing, training delivery, HR data maintenance, travel support, benefits and employee support. The shared services teams have maintained the quality and service levels of the functions they inherited and have strengthened and streamlined the underlying business processes in each area, generating an average efficiency savings of 8 percent per year. Having new groups of employees examine and assess processes that have been in place for a long time has invariably opened the door to new thinking, new approaches and measurable improvements. Overall, the shared service centers’ ability to maintain performance levels while driving down costs has created a true strategic advantage for Intel human resources.

In addition to the shared service centers, Intel human resources adapted the Lean Six Sigma principles, training and culture found across its manufacturing environment. Lean Six Sigma is a production process centered on the concept of preserving value with less work. The Intel HR team hired several manufacturing Lean experts to provide training, coaching and direct support for complex HR challenges. At first, some were skeptical about how Lean Six Sigma could benefit an HR organization, but the results have been significant. During a three-year period, more than 1,000 HR employees completed some level of Lean Six Sigma training, and 80 employees earned their Lean Six Sigma Green Belt, Black Belt or Master Black Belt certification. The Lean Six Sigma projects generated more than $3 million in savings during the first three years of the program. We are now integrating Lean Six Sigma methods and certified employees into all of our projects, and we are training our project management community to make full use of these capabilities as part of our continuous improvement culture.

Based on the Lean experience, Intel human resources encouraged and empowered its employees to “bust bureaucracy.” Employees completed seminars on how to identify common types of waste (overprocessing, rework, waiting time) and made changes to their processes to eliminate that waste in their areas of responsibility. To drive excitement and passion around this initiative, Intel human resources tracked the results, and the team with the highest-impact “bureaucracy busting” results was able to share a $20,000 prize and a celebration party. Employees appreciated the opportunity to learn new skills and loved the competition; more than 3,000 waste-reduction improvements were completed in 2.5 years as a result. Human resources also extended its Lean Six Sigma culture to the area of risk and controls. It inventoried and reviewed about 500 controls across the business processes, looking for broken, redundant or useless controls that could be eliminated without creating risk for the business. Internal organizational health survey results jumped significantly following these programs, because employees appreciated the opportunity to learn new skills and felt empowered to make changes in their day-to-day work.