Cultural change has been widespread among UK retailers in recent years. Many of the big names on the high street can be credited with having successfully overhauled their organisational culture. They have moved from an autocratic and numbers-driven approach to a more open and supportive, yet challenging and professional, environment. But the years of hard work are in danger of being undone if the present economic doom and gloom is allowed to scare senior management into reverting to the outdated, top-down approach to people management.
Carphone Warehouse HR director Richard Smelt says: “A drift towards a command and control, top-down approach that alienates our people is absolutely a possibility when you’re in conditions like this. Every decision is about focus on cost and you lose sight of people.”
And it can happen fast, warns Beaverbrooks managing director Daniel Brown. “If you let it, it can impact really quickly. Nine months ago, everything seemed fine. People could let the culture change quickly, because they panic and get scared. It takes a lot longer to get it right than for it to go wrong.”
Brown says Beaverbrooks has worked hard over many years to put people at the heart of its business. The retailer’s mission statement states that the purpose of the jeweller is to “enrich lives” – an aim it refers back to constantly.
At the retailer’s annual store manager’s conference in February, talk about the day-to-day business was banned. Instead, Beaverbrooks partnered with training company Advance Performance to offer delegates a special programme to help with their personal development. “It was about how to help people get the best out of themselves – it really blew people away,” says Brown. The ethos behind the event was that senior management were simply “happy for staff to be happier”.
He is adamant that maintaining this approach is critical in a slowdown. “The right way to treat people is the right way to treat people – however you are performing. If you believe it is the way to be successful in business, why would it be any different [in a slowdown]? If anything, you should stick to it more,” he argues.
However, Brown adds that there is no “magic formula” for sustaining this culture during challenging times. “You just have to do it,” he says.
Liz Campbell, portfolio director at performance development consultancy Lane 4, which has helped retailers including Currys and Sainsbury’s overhaul their approach to employee performance, believes that an autocratic and controlling culture doesn’t allow for “flexibility, empowerment and speed of decision”.
According to Campbell, this was the primary reason why Currys embarked on its culture change initiative. “The market was changing so significantly with the internet and mass merchants such as supermarkets that the difference was going to have to be around customer experience,” she explains. But management were not going to be able to get staff to deliver just by telling them to, she says. “They needed to be able to inspire people to perform and allow them to innovate.”
However, Campbell acknowledges that this is far easier to achieve when times are good. “If the figures aren’t right, it can ripple down the organisation, with everyone focusing on yesterday’s numbers to achieve tomorrow’s sales.” As a result, you get managers two or three levels above telling store managers how to run their stores, whereby the development aspect of the role for these staff is lost. “It stops allowing them to do what you are paying them to do,” she explains. “The role of a leader is not to tell the store: ‘Get your figures right’, but to ask: ‘How can I challenge and support you?’”
In a difficult environment, however, it is very easy to get the challenge without the support. As Campbell sees it, a lot of this is driven from the top down and business leaders become even more important cultural role models to staff during tough times, because employees become more likely to look above them and mirror behaviour.
Carphone Warehouse’s senior management are actually increasing their efforts to communicate and engage with staff. Smelt explains: “You have to go the other way and up communication and engagement to keep the hearts and minds of people.” The mobile phone retailer has put in place a new balanced scorecard for the retail business and the chief executive of that business brings managers together regularly to talk to them openly about the challenges they face. Smelt adds that it is imperative to include the positive in these exchanges as well. “It’s not all doom and gloom – we’ve got some great things happening. You’ve got to give people a vision of where we want to be,” he says.
The retailer has also increased the frequency of its employee engagement survey. “You may think now’s not a good time to take the pulse of the business, but that’s what we’re doing to help employees feel part of the future and part of the solution,” he explains.
At Beaverbrooks, despite being firmly committed to a people-centric approach to business, Brown says it is a permanent challenge not to forget that the retailer needs to keep money coming in. “It can only work as long as you keep focus,” explains Brown. “A few years ago, we perhaps forgot a bit that we need to make money to do what we want to do. The biggest challenge is to achieve a balance and remind people that their job is to put money in the tills.”
It is inevitable that the climate of fear that always ensues during turbulent economic times will permeate retailers, however positive the environment may be. And these companies will need to take proactive steps to avoid unconsciously drifting back into the outmoded, oppressive management styles of yesterday – or they risk making matters even worse.
Culture change shifts focus at currys
2004 – the old ways
Results – only as good as yesterday’s numbers
Sell cover plan
Thou shalt work hard
We are number one
Retail is detail
Focus on the short term and the long term looks after itself
2007 – the new ways
We work in a high-performance environmen
-High support and challenge
-Have the freedom to take risk
-Believe we can
-Keep it simple
-Look at the long and short term
We trust, are open and honest, and operate with integrity
The customer is king
We believe in team work
–Aligned with each other
We have a clear story and strategy
Change is constant