Case study: Growing the Business. Albert Hakkers (Diageo)
Albert opened by talking about how he got fed up with responding to challenges by simply reducing headcount so he decided to take a stand and do something different. Albert then talked us through his approach to Strategy, Leadership & Culture, Structure & Process.
In crisis mode, you can respond to challenges by redoing headcount,reducing the marketing/R&D spend, or reduce non-staff costs (e.g. travel). What you are doing is continuing with your usual strategy, but just scaling back. The reality is that the ‘cutting back’ as a strategy will only serve to reduce your market position and you can’t cut your way to success. Albert suggested that HR needs to own the business, suggesting that HR needs to take a portfolio approach to the business (distinguishing between cash cows, stars, dogs, wild cats) and responding appropriately. Albert suggested that HR need to keep a focus on:
Innovation – Make sure that you don’t stop innovating when times are tough
Premiumize – Don’t take part in the ‘race to the bottom’
Reputation/Compliance – Things have moved on since Sarbanes-Oxley was introduced, and social media has massively increased transparency. Mistakes will be amplified and broadcasted.
Talent – Albert believes HR should be much more demanding on the talent agenda, engaging with all parts of the business to make sure that all strategic business plans have a talent component to them.
You have to invest resources in your priorities. moving from 70% back office/30% front end to 35% back office/65% front end. Whilst this might seem like a difficult transition, you need the people in the front end to make a difference.
Leadership & Culture
Get the leadership team in good shape, which often means making major changes if things haven’t been working. (like in Football, if you lose every weekend then you need to make big changes). Engage all employees, and you can’t do too much engagement! And don’t forget the middle managers!
Structure & Process
Technology can play a massive role in flattening organisational structures, and Albert talked about how unnecessary layers will introduce more leadership teams who will inevitably develop their own strategies. A flat organisation makes it easier to have one business strategy, one marketing plan, one talent agenda, one compliance agenda. Albert shared some personal experiences of changing from the old approach (where you spend a lot of time negotiating with other business units to persuade them to work with you, take a common approach, spend time sorting out the mess) to a new way of ‘cutting the crap’ and getting on and doing it it. This is approach is much easier when you have a flat organisation. HR is not there to be loved and trying to please everybody is a route to failure. HR should not shy away from having the difficult conversations.
When you change the structure, you should also focus on process improvement. This means investing time and money in capability development, improving decision making (often bad in many organisations!), and embed the compliance agenda.
(This was live-blogged during a session at the European HR Directors Business Summit 2015 in Barcelona – I’ve tried to capture a faithful summary of the highlights for me but my own bias, views – and the odd typo – might well creep in.)