Company On Wheels - business relocation

Moving an entire division--or a whole company--is a job that takes planning, flexibility, and yes, sensitivity. Here's how four companies faced the challenge.

If you've been tapped to move an entire division or company from one county or state to another while supporting the employees who get out the product, you probably won't have much trouble imagining a Western cartoon version of the job. In the final frame, you're hanging from a cliff by your nails after first your horse and then the bridge have collapsed under you. Even as everything around all of you changes, your people still have to produce on time and on budget. According to recent statistics, you aren't alone (and yes, you survive the experience). Relocations of whole divisions and whole companies have been increasing in recent years, and HR must make it happen.

So far, no one keeps national statistics for whole-company relocations. But everyone agrees that group moves have become more frequent, with as much as 25 percent of some industries relocating in one year (see chart). In destination cities like Sacramento, California, the sharp increase in the rate of whole-company relocations is striking, says Barbara Hayes, executive director of the Sacramento Area Commerce and Trade Organization, or SACTO. Usually SACTO sends out 25 business relocation information packages during a two-month period. In July and August, it sent out 60 packages. Ten companies have moved to Sacramento in the last six months, citing the high cost of housing and of doing business in the Bay Area.

Most companies that relocate en masse cite one of three reasons:

* Lower cost of doing business in the new location.

* Acquisition by another company

* Quality-of-life improvement for all employees, including traffic, schools, local housing market, and similar issues.

Whatever the company's size or work, HR's challenge is to maintain productivity while managing the complex, emotionally charged process of changing the context of employees' lives. Here is how four companies fared with large-scale relocations.

Keeping the vehicle moving

As a result of Volvo's purchase by Ford Motor Company, Volvo Cars of North America is in the midst of moving from Rockleigh, New Jersey, to Irvine, California. Nita Mitchell, vice president of human resources, heads up this move and plans to complete it next summer. Now, she's focused on keeping productivity up by taking care of her people. So far, she has done so by:

* Framing the move as a reinventing of the company, a "re-Volvolution" that is a purposeful pursuit of the future.

* Taking every employee who has been invited to go to Irvine on an exploratory visit to Southern California, including meetings with real estate agents, school visits, and family meetings to hear about community life.

* Not asking employees for their decisions until they have met with the local chamber of commerce, and the mayor of Irvine and discussed relocation with their own families.

* Enhancing the company's relocation policy by paying a lump sum for temporary living expenses and a tour of California during the house-hunting process.

Mitchell reports that all of those whose jobs are being moved to Irvine were invited to go. Staff received personal invitations from the CEO to relocate. Of those invited, 60 percent have agreed to move--5 6 people to date. "Most people in our company are Northeast born and bred, so it's a huge change. We'll help them manage that change, including providing personal counseling and outplacement support. When someone comes in and has to talk, we drop everything." What will make the move succeed? "Communication," Mitchell insists. "We make our priority our people."

Bob Goodman, a career counselor with Cedars-Sinai Health System in Los Angeles, agrees that a laser focus on employees' needs is vital to a successful move. Goodman was acting manager of training and development for Transamerica Life Companies in Los Angeles when most of the divisions of the company moved to Kansas City, Missouri, in 1993 and Charlotte, North Carolina, in 1994. "I cannot overstate how intense the emotional impact of this kind of move is," he says. "The resistance to change is so great that the handwriting can be on the wall, services can be in place, but employees may not let it sink in until the day their jobs end. Then, in my experience, they were clamoring for services."

Maintaining productivity in a technology company

Lucas Digital LTD. is reversing the usual corporate trend by transferring from a suburban campus to a downtown location. Overseeing that effort is Chris Glennon, director of corporate real estate and operations for the company, which currently creates its leading-edge special effects for films in San Rafael, California. Glennon is using his 15-year background in entertainment company moves to manage the logistical and human sides of the company's coming relocation to San Francisco. He's planning the move for 1,500 to 1,800 employees, many of whom are in the midst of cutting-edge technological entertainment productions, and says that "you can't just turn off a supercomputer." Glennon has a 36-month planning time line for the technology center at the company's new site, the historic Presidio. "This is already a dynamic environment, and we're picking a date three years Out to move seven different companies," all on different work-flow and delivery schedules.

Lucas Digital competed for space at the Presidio, and when it was selected as a finalist, the company president sent all employees an e-mail explaining the reason behind the bid and what the next steps in a move would be. "In our culture, we like to keep employees informed. Morale is always a concern for us," Glennon explains.

And this move raises considerable issues for employees. Half of them live within 20 minutes of the current location. Commuting into San Francisco means bridges; there are few mass transit alternatives from Mann County. The San Francisco housing market is among the country's most expensive. Glennon's solutions include developing a transportation plan and building numerous amenities into the new facility, such as 300 housing units for employees at the Presidio, subsidized on-site child care, multiple food service and dining alternatives, and a fitness/activities center that will offer aerobics, yoga, tai chi, sculpting, life drawing, and acting. Building the human bridge to an attractive new workplace is Glennon's focus as the move approaches.

A restaurant recovers

Keeping everyone working productively posed different challenges for Craig Heide, director of recruitment for Champps Entertainment, Inc., a restaurant company headquartered in Denver. Heide, who oversees human resources, managed a corporate move between October 1 and December 13, 1999. He invited corporate employees in Minneapolis and Danvers, Massachusetts, to move to Denver, the CEO's choice for the new headquarters. Like Mitchell, Heide faced an East-West dilemma, The employees who lived in Danvers were unfamiliar with Denver and reluctant to strain local family ties. Champps offered employees the same job titles and responsibilities and paid relocation expenses, including the cost of commuting for months for employees who had just bought homes in their old cities. Champps tried to retain everyone and needed to add 15 to 20 new people to maintain service to their 21 restaurants across the country. But only 6 of 40 employees made the move, Family ties in the original locations appear to have been the key factor for those who didn't move. Undaunted, Heide recruited new staff, and has had 80 percent retention since then.

Family Channel faces L.A. culture

Fox Family Worldwide tested both family and religious ties when it purchased the Family Channel, a Pat Robertson-owned company in Virginia Beach, Virginia. Of 250 to 300 people, Fox relocated about 50 to Los Angeles and laid off the rest. Beth Cleary, senior vice president for human resources and administration, describes relocating the new employees in terms of her long history with relocations. "Immediately upon acquisition, each employee received a letter about the relocation with 60 days' notice that they might be unemployed. Department heads were required to evaluate staff and determine who had the talent, qualifications, and willingness to move. Everyone had face-to-face contact, and it was handled in a very fair way." Cleary says corporate culture wasn't the problem. "It was the general culture of L.A." Despite Cleary's experience and sensitivity to the issues, as many as eight of the Family Channel employees who moved to Los Angeles moved back within two months, unable to acclimate to life there.

Nancy L. Breuer is a freelance writer in Los Angeles.

Whole-company Relocation: Achieving the Best Outcome

If you are in charge of a whole-company relocation, here are some steps you can take to ensure success:

* Contact the local economic development organization early, advises Barbara Hayes, executive director of the Sacramento Area Commerce and Trade Organization, or SACTO. At no charge, SACTO brings the Sacramento Relocation Council to the relocating company's place of business, offering an overview of issues like real estate, temporary housing, and schools. They help to plan a "no-surprises" move.

* Customize the move as much as possible for each employee. Fox Family Worldwide put Judy Morgan in charge of her fellow Virginia Beach employees' moves, then structured her own move to give her the greatest freedom to keep her colleagues productive and happy. A single mother, Morgan, who now serves as director of program operations, had to sell a home and manage two teenage daughters who were on their own in Virginia for three months. Fox flew Morgan and her associates to Southern California to meet with real estate people to help them make decisions about a move, then arranged corporate housing in L.A. for those who did move. "They did everything they could to make arrangements for us--corporate housing, rental cars, per diem for eating out. I flew back a few times, which was also appreciated. And they even helped move my dog." As the point person for the Virginia employees, Morgan communicated with the movers and knew where every van was every day, so she could reduce employees' anxiety. "We were launchin g a new television network, so it was important to focus on the launch. There was no time or energy to worry about the day-to-day" Morgan emphasizes how important customizing would be for a family with greater challenges, such as a disabled child.

* Prepare employees for culture shock. Morgan had never lived outside Virginia, and she relied on her faith and sense of humor to help her through the difficulties. Still, she could have used a contact person who could orient her to local customs, such as the way public utilities connect (or disconnect) service in L.A. She now laughs about some of the differences, including fashion trends: "I've never worn so much black in my life. Had to get rid of my beige and my cream and my olive."

* Address the cultural-diversity issues. Goodman recalls, "Some folks may have been comfortable about being gay, Latino, African American, or Asian in L.A., but they had real concerns about life in other locations. Transamerica arranged for meetings with political leaders in Charlotte and Kansas City such as the mayor and the governor to show that there would be a receptive environment. The Charlotte move succeeded largely because the first division to move there was headed by a charismatic African-American manager. He set the tone for the others."

* Honor emotions with concrete help. Some employees may benefit enormously from classes in stress management or career planning, Goodman suggests. "You need to help people face the endings," he explains. Some long-term Transamerica employees "were very angry. They thought the deal was security and retirement." Transamerica's classes for managers in transition management helped, as did a course in coping with change for employees.

* Stay in touch through the process. Glennon, of Lucas Digital, believes that employees should be kept up-to-date on what's happening with the move. His company has made sure that messages to employees coincided with the company's becoming a finalist for the space, its final selection, and its signing of the lease. Mitchell sends weekly e-mail updates and holds town ball chat sessions.

* Involve the stakeholders. Expecting employees to maintain productivity means keeping them involved and informed. Glennon's observation of other companies tells him that too often, the stakeholders are not adequately involved. and their insights are lost. At Volvo, frequent communication is the road map, and Mitchell isn't afraid to ask directions. "If we don't know something, we admit it, and tell the person when we'll know it."

* Overestimate the time the move will take. What would Craig Heide change if he were making a whole-company move again? He'd allow himself a more generous time line than 11 weeks. Glennon advises that if directing the corporate move is a job add-on for you, budgeting your time in line with the timetable for the move is your major challenge.

COPYRIGHT 2000 ACC Communications Inc.
COPYRIGHT 2001 Gale Group