Wachovia Case Study

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    Filing Information: October 2006, IDC #204157, Volume: 1

    Corporate Learning and Performance: Buyer Case Study

    B U Y E R C A S E S T U D Y

    T h e I n t e g r a t i o n o f P e r f o r m a n c e a n d L e a r n i n g a t W a c h o v i a

    Lisa Rowan Peter McStravick

    I D C O P I N I O N

    In February 2006, Wachovia Corp. rolled out its newly integrated learning and

    performance capabilities in the first phase of what will eventually be an enterprisewide

    implementation. As IDC has reported previously, the integration of these two

    processes can provide organizations with improved visibility into the talent pool,

    deliver more targeted learning and development, and improve the overall quality of

    manager/employee interactions around performance. IDC believes that the Wachovia

    story exemplifies the effort that is required by organizations to successfully integrate

    the processes and technologies around learning and performance. Key findings from

    this case study include:

    ! Integrated learning and performance management (PM) can save an

    organization a significant amount of time and improve an employee's level of

    engagement in the process.

    ! Amid the war for talent, integrated learning and performance gives employees

    more control over their own career development and can thus serve as an

    integral part of a company's retention strategy.

    ! Integrating learning and performance creates a climate for more meaningful

    discussions between managers and employees around career development.

    ! An integrated system helps more accurately demonstrate and quantify the impact

    of learning.

    ! Companies that focus on standardizing their learning and performance

    processes first will find the adoption of new and integrated platforms easier.

    ! Companies should incorporate change management strategies into their rollout.

    I N T H I S B U Y E R C A S E S T U D Y

    This IDC Buyer Case Study examines Wachovia Corp.'s efforts to integrate learning

    and performance management. It observes the company's evolution from being adecentralized organization to being a company with standardized processes and

    platforms for learning and performance. This study is based on phone interviews and

    product demonstrations with Dean Williams, Wachovia's chief learning officer;

    Eleanor Reali, organizational effectiveness consultant with the leadership practices

    group; and Michelle Gasiorowski,learning services manager.

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    S I T U A T I O N O V E R V I E W

    O r g a n i z a t i o n O v e r v i e w

    Wachovia Corp. is one of the nation's largest diversified financial services companies,providing a broad range of retail banking and brokerage, asset and wealth

    management, and corporate and investment banking products and services. Including

    the Golden West merger, which closed on October 1, 2006, Wachovia has retail and

    commercial banking operations in 21 states, with 3,400 retail banking offices from

    Connecticut to Florida and west to Texas and California. In addition, two core

    businesses operate under the Wachovia Securities brand name: retail brokerage with

    737 offices in 49 states and in Latin America, and corporate and investment banking

    in selected industries nationwide. Other nationwide businesses include mortgage

    lending in 39 states and auto finance covering 46 states. Globally, Wachovia serves

    clients through more than 40 international offices. As of September 30, 2006,

    Wachovia had assets of $559.9 billion and market capitalization of $88.2 billion.

    Not unlike most financial institutions, Wachovia evolved from a number of mergers

    with other banks, the most significant being when First Union and Wachovia merged

    in 2001, officially becoming the entity it is today.

    This merger in particular served as a catalyst for Wachovia because it was at this

    time when the company's leadership began to realize that to become better equipped

    to manage its projected growth, the company needed to begin to standardize some of

    its key processes. Two in particular, which until this time had remained largely

    disparate and decentralized, were learning and performance management. The

    learning environment, for instance, within both Wachovia and the legacy First Union

    bank, were quite different. While neither company had standardized on any one

    learning management platform, First Union had operated with a corporate university-based model that was centralized, while Wachovia was more decentralized, with the

    bulk of its training functions embedded within the individual lines of business as well

    as the Wachovia Center for Learning that focused on leadership, creativity, and other

    programs with organizational reach and relevance. Equally dissimilar were the

    performance management processes in place across the company. While some

    general guidelines had been established by First Union around PM, each line of

    business controlled its own performance management system and determined how it

    was created, operated, and maintained. A companywide performance management

    process, including core competencies and support by a new technology tool, had

    been rolled out in legacy Wachovia but was not scalable to the larger merged

    organization. From an enterprise perspective, not only did this prevent visibility into

    individual and organizational performance across and into the different lines of

    business, but as the new Wachovia continued to grow and as people moved between

    business units, it became increasingly apparent that the inconsistencies that existed

    in these processes could no longer be ignored.

    Wachovia CEO Ken Thompson recognized that to move his company forward in how

    it performed as an enterprise, Wachovia would need to eliminate the use of multiple

    disparate systems. Different types of employee performance, compensation, and

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    learning information were being stored in different systems, each with its own

    interface, creating a confusing experience for Wachovia employees. Thompson and

    Shannon McFayden, Wachovia's head of human resources (HR) and corporate

    relations, made the decision to centralize the core HR processes and make them

    more accessible and user friendly. Specifically within the learning function, Williams,

    Wachovia's chief learning officer, picked up the charge by adopting a new five-word

    mantra for his team: "Make Learning Easy and Effective."

    To achieve this, Wachovia's HR group set several goals:

    ! Improve the overall quality, efficiency, and consistency of Wachovia's learning

    and performance management systems

    ! Better integrate the two processes and systems

    ! Standardize on a single learning platform and integrate it with a single

    performance management system

    ! Provide employees with easier access to the performance and development toolsthey need to be successful in their jobs

    ! Provide training to Wachovia employees while keeping them engaged in their

    jobs and interfering as little as possible with their daily responsibilities

    ! Remove frustration from the system and replace it with fluidity

    ! Reduce the need to toggle in and out of different applications

    ! Improve tracking and reporting capabilities

    ! Take an employee-centric view embed the processes around learning and

    performance into the employees' workflow as best as possible

    The HR group recognized also that a move in this direction for the company was

    going to be a challenge from a cultural standpoint. In many cases, the integration of

    technology is easier than the integration of long-established processes and

    workflows. To maximize the odds for success, Wachovia made the important decision

    to first reengineer and standardize on the processes the company used around

    learning and performance management before selecting specific technology

    solutions. Once the work on processes was completed, the organization agreed to a

    phased approach for implementation. First the company would roll out its learning

    management system (LMS) and then it would select and implement a performance

    management tool. A critical requirement for selection of a PM tool was the ability to

    integrate seamlessly with the LMS.

    Business Case for Integrating Learning and Performance in the

    Context of the War for Talent

    While the primary driver for Wachovia to integrate its learning and performance

    technologies was the need to create a more consistent model for its employees

    across all business lines, there were other forces driving this decision as well. In

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    particular was the current talent shortage affecting the financial services industry. Like

    many financial institutions, Wachovia has found that despite its offshoring and

    outsourcing strategies, it was still facing a skills shortage. With the company looking

    to grow its business further and establish itself as a national franchise, talent

    development and retention became key initiatives. Today, Wachovia is shifting its

    strategy to grooming its own talent rather than acquiring it from outside the

    organization. This shift required that Wachovia reexamine the ways in which it

    measured and tracked internal competencies and performance. It also meant that the

    bank consider ways in which it could ensure that it remain an employer of choice a

    place where people want to work and more importantly want to stay.

    Williams, Wachovia's CLO, believes that the integration of learning and performance

    played a key role in a couple of ways and standardization made for a much stronger

    business case. For example:

    ! With consistent processes for learning and performance management, enabled

    by robust technology, Wachovia would gain greater visibility into its talent pool

    across the company and be able to develop and retain top performers more

    effectively. These tools, and the leadership behaviors they support, would have a

    positive impact on the manager/employee relationship as well as the potential to

    lift performance at the individual, team, and organizational levels.

    ! Similarly, happy employees tend to stay with their companies and so when

    feedback from employee surveys told Wachovia that its workers wanted more

    control over their careers, the company set out to provide that. The integration of

    learning and performance systems not only made the development and

    performance functions easier for management, but it empowered Wachovia

    employees to be more involved and take greater ownership over their career

    plans. The integration of the two functions gives employees greater visibility into

    their performance and development goals.

    C h a l l e n g e s a n d S o l u t i o n

    Hybrid-Solution (Centralized/Decentralized)

    While Wachovia's leadership agreed that it made business sense to standardize on

    one platform each for learning and performance, the company did not want to lose the

    flexibility and freedom the individual business lines had to customize each process to

    their own specific needs. As a result, Wachovia chose to apply a hybrid model to the

    two functions. Centralization of the learning and performance processes would create

    a more consistent and efficient experience across the company and give Wachovia

    better tracking and reporting capabilities as well as an ability to address

    enterprisewide training needs. However, to address the unique learning needs of

    each business line, Wachovia created learning teams embedded within each line of

    business whose responsibility it was to identify the specific development goals for

    their particular clients, whether the general bank, a retail securities group, a corporate

    investment bank, the wealth management group, and so forth.

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    Vendor Selection Process and Implementation Timeline

    Wachovia issued its request for proposal (RFP) for a learning management system in

    2001 at which point it began evaluating vendors. Having come up with the functional

    requirements it was looking for in a platform, Wachovia's selection committee

    narrowed the list down to three vendors and then invited each of those vendors in for

    a demonstration. To make comparisons between vendors as accurate as possible,Wachovia used a scripted scenario that it had each vendor perform.

    In addition to the demonstration, Wachovia had a number of key criteria that

    influenced its decision:

    ! Product usability. Wachovia performed a number of usability tests with the final

    three LMS products with different stakeholders to gain "hands-on" experience

    with each product and assess its ease of use.

    ! Scalability. It was important that the LMS product be able to scale to meet the

    demands of Wachovia's growing company as well as be able to provide unique

    learning environments for each of the companies' individual business units.

    ! Reporting capability. Wachovia needed an LMS product that would allow it to

    run detailed tracking reports across the entire organization and within each line of

    business. In what is a highly regulated industry, it is critical for Wachovia to be

    able to quickly determine what training is being delivered as well as who has

    taken it and who has not and how much of it has been taken.

    ! Strategic direction. Wachovia's leadership met with the leadership of each LMS

    vendor to ascertain that the two companies were strategically aligned and were

    essentially headed in the same direction.

    ! Financial stability. Wachovia wanted to ensure that it partnered with a learning

    company that was financially stable and would be around for the long term.

    After completing its evaluation of LMS vendors, Wachovia chose the Docent learning

    management platform and began implementing the system throughout its enterprise

    in March 2003. Although the LMS platform came with basic performance

    management modules, Wachovia chose to leave these turned off and commenced its

    search for a best-of-breed performance management system.

    During this time also, as part of the company's drive to standardize key processes,

    Wachovia began developing and then using a set competency model. Competencies

    were defined for the company's three primary job roles: individual contributor, leader,

    and executive leader. These competencies were integrated into the company's

    existing performance management and learning processes. Reali, Wachovia's

    organizational effectiveness consultant, was part of the team that implemented thecore competency strategy and served as the competency lead as part of the

    performance management project team. In addition to working on PM design that

    integrated learning with effective PM, Reali kept focus on the way competencies

    could be used to support employee performance and development as supported by

    the two platforms. Joining Reali and the performance management project team was

    Gasiorowski, from Wachovia's learning services group, who would help ensure that

    the performance management product integrated well with the LMS platform.

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    In 2003, Wachovia began the vendor selection process; the first step was to hold a

    requirements meeting with key stakeholders. This generated a list of some 800

    requirements that Wachovia then put into its RFP. One set of requirements

    addressed the integration of PM with learning in detail, including functionality, user

    experience, and technology integration.

    At the end of the evaluation process, the SuccessFactors performance management

    platform was chosen by the selection committee. One thing the committee in

    particular liked was the platform's configurability such that it could be tailored to

    address the unique performance management needs of Wachovia's different lines of

    business.

    In 2004, Docent and Click2Learn merged to form SumTotal Systems. The design of

    the Docent 6.5 LMS gave Wachovia an integration path to link SumTotal's and

    SuccessFactors' tools.

    In February 2006, Wachovia rolled out its integrated performance and learning

    management system to first-phase participants, which included the human resources

    and corporate relations division and parts of the operations, IT, and ecommercegroups. Wachovia recently purchased SumTotal's newest LMS platform, Total LMS

    Version 7, which also includes a path for integration to SuccessFactors' PM tool. The

    company plans to roll out the integrated systems to the rest of the company in

    November 2006.

    What Integration Looks LikeToday, the integration of SumTotal and SuccessFactors at Wachovia has changed

    the way managers and employees engage around learning and performance. Prior to

    the integration of these two platforms, managers typically wrote performance reviews

    for each of their direct reports from scratch at the end of the year, using the forms and

    tools that were in place for their business area. This meant having to recallemployees' goals and accomplishments for the past year and assign ratings

    accordingly. Individual development plans were typically created and managed

    separately. Conversations around performance and development typically happened

    once a year because managers simply didn't have the time or the tools to do

    otherwise. With the new system in place, managers and employees can access an

    integrated performance and development plan (PDP) any time from Wachovia's HR

    portal. A single sign-on gives prepopulated access to an employee's current plan,

    which includes the employee's goals for the year, the appropriate competencies and

    behaviors, and a detailed development plan that can include formal and nonformal

    development activities. From within the development plan, learning activities housed

    in the company's LMS can be searched by competency and added to the plan as

    needed by either the manager or the employee at any time. The development plans

    keep an up-to-date record of the status of each learning activity, showing when the

    employee enrolled and tracking his or her progress and logging when the learning

    was completed.

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    In this way, the performance and development plan has become a dynamic document

    used continuously throughout out the year, initially as an ongoing performance journal

    and eventually as the final appraisal document. Its accessibility gives managers and

    employees:

    ! A simple means of discussing performance goal and competency expectations,

    either in person or virtually at the beginning of the performance cycle

    ! A way of aligning individual goals to the company's organizational goals

    ! A method for assessing the employee's current state of proficiency by

    competency

    ! The capability to assign development strategies as needed throughout the year

    Figure 1 shows Wachovia's learning and development portal. From this page,

    Wachovia employees can access both the SumTotal LMS (rebranded as My Learning

    Connection) and the SuccessFactors performance management system.

    F I G U R E 1

    W a c h o v i a ' s L e a r n i n g a n d D e v e l o p m e n t P o r t a l

    Access to

    Performance

    Management System

    Access to Learning

    Management System

    Access to

    Performance

    Management System

    Access to Learning

    Management System

    Source: IDC, 2006

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    8 #204157 2006 IDC

    Figure 2 shows Wachovia's My Learning Connection with the navigation link to the

    performance management tool. Clicking on this link gives Wachovia employees

    access to the performance management tool without the need for a second log-in.

    Similarly, employees can navigate seamlessly back to the learning management

    platform from within the SuccessFactors platform by clicking on a similar link shown in

    Figure 3.

    Figure 4 shows how the integration between the learning and performance systems

    allows Wachovia employees to search for learning content by competency.

    F I G U R E 2

    W a c h o v i a ' s M y L e a r n i n g C o n n e c t i o n w i t h N a v i g a t i o n a l L i n k

    Source: IDC, 2006

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    F I G U R E 3

    W a c h o v i a ' s N a v i g a t i o n a l L i n k

    Navigationallink back to

    learningplatform

    Navigationallink back to

    learningplatform

    Source: IDC, 2006

    F I G U R E 4

    W a c h o v i a ' s M y L e a r n i n g C o n n e c t i o n S e a r c h P a g e

    Ability tosearch by

    competency

    Ability tosearch by

    competency

    Source: IDC, 2006

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    R e s u l t s

    While the rollout of the integrated system is still in its first phase, Wachovia does

    expect a number of benefits once the system is implemented across the entire

    enterprise. These include:

    ! Time savings for managers. Previously, managers may have taken as much as

    two weeks of their work time at the end of each year reviewing files and

    employee goals, writing development plans, and delivering appraisals. The

    integrated system reduces the amount of time needed to complete the

    performance appraisal process, allows for some of the onus for the process to be

    pushed down to the employee, and spreads the time required to keep the system

    up to date over the entire year. Wachovia CLO Williams estimates that the

    automated components of the system alone will save Wachovia management

    over 500,000 hours per year.

    ! Improved quality of engagement between manager and employee. Because

    historically many performance reviews occurred during the final weeks before

    they were due, this gave managers little time to have quality discussions around

    performance and development with their team members and still get the required

    materials submitted on time. The automation and integration of their learning and

    performance systems now encourages managers and employees to engage

    more frequently, allowing for more meaningful discussions throughout the year

    regarding individual performance and development.

    ! Greater visibility into the Wachovia talent pool. Wachovia's executives have a

    better ability to identify their top performers so they can support and develop

    them for leadership roles within the bank. The integrated approach will help

    identify who those people are and enable the learning to take them to the next

    level of their careers, within their current business area or as "corporate talent"

    that can be leveraged effectively across the company.

    ! Improved ability to assimilate merging workforces. Typical of many

    companies within the financial service industry, Wachovia Corp. has evolved

    through a series of mergers and acquisitions. An integrated performance

    management and learning system will play an important role in potential future

    merger and acquisition activity by assisting the company in more seamlessly

    assimilating newly acquired talent into the incumbent talent pool. Because

    Wachovia is a public company, this may also have a positive effect on Wall

    Street, where financial analysts often weigh a company's reputation around

    merger integration in its evaluation.

    ! Improved career development capability. Management will not be the only groupto benefit from the increased visibility that the integrated learning and performance

    management systems will bring to Wachovia. Employees interested in career

    advancement will have a better sense of their overall strengths and weaknesses

    and be able to benchmark themselves against the competency levels required for

    more senior positions within the company. Where development opportunities exist,

    employees will be able to access Wachovia's learning catalogue and incorporate

    learning into their individual development plans.

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    ! Better measurement of learning's impact. With the two functions linked together,

    Wachovia will now be able to better measure the impact learning has had on an

    employee's performance. Ratings given prior to the completion of training can be

    compared with those that follow, indicating whether there were improvements.

    E S S E N T I A L G U I D A N C E

    Wachovia's experience in the redesign and implementation of integrated learning and

    performance management hold important lessons to buyers and vendors of these

    platforms:

    ! Start with the end in mind. Wachovia CLO Williams believes that companies

    should begin the process by envisioning and then articulating the end state or

    environment they are trying to create before speaking to vendors about a

    potential solution. Ignoring this important step can allow an organization to

    become enamored with a technology and its capabilities even though it doesn't

    fulfill the necessary business requirements.

    ! Focus on the processes first. Similarly, Wachovia spent a lot of time

    standardizing upon and reengineering its performance management process up

    front such that it had a clear idea of what it needed its technological solution to

    do. The investment Wachovia made in evaluating and reworking its processes

    facilitated the adoption of the integrated system since stakeholders were involved

    in the process throughout. The best technology cannot excel around badly

    designed processes, so this is a vital step.

    ! Use business metrics to gain sponsorship. While sponsorship wasn't a

    significant challenge at Wachovia because the project had the support of CEO

    Thompson, HR used business metrics to build a case for the initiative. Rather

    than highlighting the number of employees that would have access to the new

    system, HR used metrics such as the number of hours management would saveper year and the impact this kind of system would have on the company's ability

    to retain, develop, and attract employees amid the shortage for talent.

    ! Consider change management issues. Given that Wachovia had largely been

    a decentralized organization, the conversion to centralized learning and

    performance was a big step for the company. As a result, the Wachovia project

    team decided to roll out the integrated system in stages to give itself an

    opportunity to address any early issues before the system went full scale.

    Similarly, to help managers and employees get used to the practice of linking

    learning content to organizational competencies, the system was set up initially

    so that employees could retrofit courses that had already been completed with a

    development goal. The aim going forward, however, is to have that linkage doneup front before a course is completed.

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    L E A R N M O R E

    R e l a t e d R e s e a r c h

    ! 2006 Talent Survey: Candidate Shortages Still Prevalent(IDC #202442, July

    2006)

    ! Plateau Systems: Integrating Learning and Performance (IDC #201774, June

    2006)

    ! Worldwide and U.S. Corporate eLearning 20062010 Forecast(IDC #35032,

    March 2006)

    ! Worldwide Workforce Performance Management 20062010 Forecast(IDC

    #34907, February 2006)

    C o p y r i g h t N o t i c e

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    Published Under Services: Corporate Learning and Performance; HR and Talent

    Management Services