Eamonn McCoy

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Eamonn McCoy eircom Employee Relations
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- Introduction background
-External Market Factors-Industrial
RelationsChange in1997-ESOP Strategy Change
Agenda -Partnership Process in eircom
ASocial Dialogue Case Study-Transformation in
eircom
Eamonn McCoy--eircom Employee Relations
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eircom Basic Metrics
Staff - 8,500 Lines - 1.6m PSTN 70k
ISDN Switches - 52 Core 1,100 Edge Data - 563
Nodes Internet - 32 POPs Mobile - no business
product - no 3G licence
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Telecoms Industry Environment ( 1997 )
COMPETITION
GLOBALISATION
PRIVATISATION
TECHNOLOGY
CONVERGENCE
CUSTOMER DEMANDS
REGULATION/ LIBERALISATION
ALLIANCES, MERGERS, ACQUISITIONS
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Context --eircom Vision 2000
RATE OF MARKET CHANGE

GAP

• Rate of change accelerates
• GAP must be closed
• Radical Change

TIME
1980
1990
2000
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Shared Market Analysis/eircom Vision 2000

• Prices will fall dramatically
• Costs must fall dramatically
• Debt must reduce dramatically
• Volume growth to replace revenue loss
• New products and services
• Higher service quality and productivity
• Investment in new revenue streams

Improve Productivity
Reduce Cost Base
Business Transformation
New Work Practices
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eircom HR Strategy - people at the centre
From short-term to longer-term focus. From ad-hoc
change initiatives to integrated cohesive
agenda . From collective processes on a
win-lose basis , to trust involvement to share
on a win-win basis.
Improve Productivity
Reduce Cost Base
Business Transformation
New Work Practices
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Industrial Relations and Partnership in eircom
We needed to manage change differently
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eircom Industrial Relations---Background from
1997 .

• The Telecom Partnership Agreement -a new way of
  working to address change.
• 1. ESOP - fit with strategy objectives
• 2. Agenda-agreed by management union
• 3 . Partnership structures change (reflect
  business structures requirements )

Improve Productivity
Reduce Cost Base
Business Transformation
New Work Practices
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Content of 1997 Partnership Agreement

• The need for changeshared analysis
• Structures for eircom Partnership and change
  management
• New industrial relations structures
• Transformation business agenda
• Payroll cost base reductions

All above based on creation of eircom ESOP
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ESOP Business TransformationInextricably Linked
Business Transformation
Getting started --1998
Partnership
ESOP
The concept !
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Creation of eircom ESOP-1998

• Trilateral negotiations Government/eircom/Unions
• Abreakthroughconceptstaff to hold 14.9 of
  equity.
• Shareholding for all staff,based on service,not
  status.
• Difficult negotiations, elaborate structures to
  be established ( financial , legal , corporate )
  .
• Requirement to measure and report progress and
  benefits,for shareholders, eircom and consumers--
  the Monitors and Measures report-- to
  earn equity.

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eircom ESOP Strategic Objectives

• Offer demonstrable long term benefit to all key
  stakeholders ie.shareholders,consumers and
  employees
• Achieve radical transformation earn the benefits
  through business success.
• Financial strengthening of the company.
• Grow shareholder value,ie. inc. ESOP14.9

Win - Win - Win
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eircom ESOP and Strategic Bargaining
Employee interests aligned with the future
Focus bargaining on the long-term
STRATEGIC ie win/win
Transform eircom business
INTEGRATIVE
Agreed agenda
DISTRIBUTIVE--ie win/lose
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1997 -The Transformation Business Agenda

• Some examples, e.g. the People issues
• Work organisation new structures
• Creating an internal labour market
• Atypical work arrangements
• Extend normal hours evening Saturday
• Reporting to site
• Mobility
• Contracting/outsourcing

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An Issue! ! -- Change Management is Complex
Successful Change Requires Dialogue !!
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eircom Partnership Model / Principles
Management Values Goals
Union Coalition Values Goals
Dialogue
Commitment Responsibility
SHARED VALUES GOALS
Management Values Goals
Union Values Goals
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eircom Partnership Structures - Jan 2002
Partnership Steering Group Partnership Support -
1 Union 1 Mgmt Management - 4 Union - 3/4
NationNal Co-ordinator
National Co-ordinator
National Co-ordinator
Operations
Technology
Support
Sales


Union 13 Mgmt 3

ANCS Shared Services Distribution/Transport
Consumer Business Markets Corporate Business
Unit Operator Services Retail Services eircom
Business Systems
NGT Broadband Data IT - Operations Web hosting
HR Billing IT - Other Shared Services
Regional Co-ordinators
Focus Group
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eircom Corporate Milestones
2001
1996
ESOP
IPO
Tech Stocks
Retail Investors
De- merger
LBO
Strategic Alliance
-Significant corporate market change in 5
years - eircom processes tested challenged -
In 2001 , LBO. The Consortium eircom ESOP (
29.9) plus Valentia Partners( venture capital )
-Next steps ? Any of the above (float , LBO ,
merger). -Business challenges for Union
Management remain
Improve Productivity
Reduce Cost Base
Business Transformation
New Work Practices