Do-It-Yourself Engagement

Kingfisher PLC is the parent company of home improvement powerhouse B&Q. In this interview, Fraser Longden, Kingfisher's head of talent and engagement, talks about engaging the disengaged -- and what lessons should be learned in the aftermath of the economic downturn.

Employee Engagement Today (EET): In your early career in retail, you moved from working on the shop floor to human resources. What made you refocus your career?

I've always tried to stay as close to the stores as possible because that's where all the people are, and that's what excites me.

Fraser Longden: I'm not sure my move to HR was ever a really conscious decision -- it just felt like the right and natural progression at the time. There was a very particular need for management recruitment at Staples as they were having some challenges around attracting and retaining enough people for the growth. The then-[managing director] said, "I'd love you to go out on the road for six months and find as many people like you that you can" -- that was how I ended up working in HR.

Having said that, I really consider myself to be a retailer working in HR rather than an HR person who works in retail. The last three jobs I've had, for instance, have been a mixture of line and HR roles. I've always tried to stay as close to the stores as possible because that's the part of the business where all the people are, and that's what excites me. I'm a firm believer, particularly when we're talking about topics like engagement, that it actually happens at a very local level, and the only way you can move forward and understand it is by talking to people face-to-face in the stores.

EET: What skills were you able to bring from sales into HR and vice versa?

Longden: The best HR people I've seen are very commercial with a good understanding of how the business works. Similarly, I've learned a lot from HR about leadership and how to engage people, which has been extremely useful in my career. I find it hard to put things into too rigid a box, but I think it's important for those in HR to understand how the whole business works.

EET: Can you tell our readers a bit about the crossroads B&Q reached in 2005 that led to employee surveys becoming more of a business-critical measure as opposed to a barometer of employee perceptions?

Longden: After a number of successful years, in 2005 we saw a small reduction in sales, which translated into a large reduction in profit. We then had a new board appointed, and Ian Cheshire joined B&Q as CEO. It was obvious we were going to have to do a lot of change quite quickly. Things like our store format had become outdated, and the customers were telling us it wasn't as relevant to them. Our merchandise selection had not been refreshed quickly and regularly enough, and our organizational structures were quite complex and too heavy in a lot of areas.

What happened then, which was the most important part, was our mindset changed from "If we've got a lot of change to make, then that's going to be a difficult challenge" to "The only way we're going to manage all this change is by engaging the people first." We had some very complicated things to do around structure. We had to rearrange the office, which led to 400 redundancies. We took a level out of our store management to make the structure a lot flatter. We had a whole reorganization around the way we did administration, the number of supervisors we had in store, and the way we deployed our experts; this meant we actually went into formal consultation with about 8,000 people. We also had some stores that were not working well for us mainly due to location, and so 22 stores were earmarked for closure.

But the big change for us was, rather than going into it with the mindset of "OK, that's going to be difficult and people aren't going to like it," we went into it knowing this was important for the business, and we were determined to find out how we could engage people with the change. We had to step up our volume of communication and be really honest about what we were doing and why -- and do it in a way that brought people with us.

For example, we closed 22 stores, and in 16 of them, we ran a survey right bang in the middle of the consultation period when we were talking to people about either being made redundant or having to face a longer journey to work in one of our other stores. We saw an improvement in engagement despite the times they were going through. We learned some new behaviors as an organization about being upfront and honest and dealing with people as individuals. We put a lot of effort into keeping communications going both ways regularly and fluidly. By doing this, we delivered a large amount of difficult change, and critically, our people came with us on that journey and helped.

EET: You were quoted as saying that, back in 2005, "We were spending £120 million in wages on people who were actively disengaged." What do you think were the main reasons for this disengagement? Did you manage to re-engage any of these individuals or suggest a career move?

When our employees saw that we were facing up to the real problems and communicating them, they came with us.

Longden: One of the things that was actually quite surprising was, in 2005 we paid out the biggest bonuses we ever have following a successful 2004. We had fantastic recognition schemes running, we were very clearly an upper quartile payer -- all those sorts of things you would expect to make a difference were in place. But actually our employee engagement levels had dropped. The reason why? People in the stores were telling us, "We don't believe the propaganda anymore. What you're telling us doesn't match up to what we're experiencing every day with the customer when they're telling us that our [merchandise selection was] out of date, and they can't find what they want."

When our employees saw that as a company we were facing up to the real problems and communicating them, then they came with us. Interestingly, the movements happened at a team, rather than an individual, level. If we can start to move a team, then often it becomes a critical mass and moves quite quickly. Often, people put a lot of effort into focusing efforts on individuals, and they turn the odd one, but it's probably disproportionate to the amount of energy it takes. It can almost become fashionable to complain, but if the balance turns so it is fashionable to be positive, then more people come with you. There are always a few that won't shift, and in those circumstances it's better for all parties to help them find a career elsewhere.

EET: How did you improve your communication methods once you assessed that was where the problem lay?

Longden: We engaged in an exercise to communicate the new strategy to every single person in the business. We used a very visual learning map at that stage. It was a very honest map -- it wasn't just talking about glossy futures. It informed everyone about the struggles we faced and the great history behind us. It began to engage people in a conversation about what they could do to move forward.

The second impact was that we moved some of our focus and attention from running lots of management development courses centrally -- just taking people through the typical set of management development workshops -- and turned our energy to helping the manager and his or her team on the floor. We used the great feedback we got from the Q¹² survey [B&Q has been working with the Gallup Q¹² employee engagement survey since 2000] to agree [to] action plans and help managers develop action plans locally, and then followed up around the delivery of those plans.

Sometimes, you can make very big assumptions at [the] head office about what the data is telling you, which can be very different to what people mean locally. I remember working with a night crew manager in one of the stores who had scored very low on the Q¹² question: "In the last seven days, I have received recognition or praise for doing good work." He felt he put a lot of effort into giving recognition -- every night spending time catching people doing things right and telling them they were doing a good job.

When I suggested that rather than us try to guess what this was about we should speak to the team, we found that what the team actually wanted to improve was something very different. They felt that they came in at night to tidy up the store and the canteen was always filthy, the toilets were a mess and the vending machines were always empty. They felt the team didn't recognize their value at all. By opening up the conversation and listening, the night crew manager was able to improve things and make a meaningful difference to his team. I do think that sometimes we overcomplicate engagement, whereas the real power is at a local level putting a few things right.

EET: Presumably it is the store manager, as opposed to the CEO, who has a direct effect on the engagement of staff and communicating the messages you as an organization are trying to send?

Sometimes we overcomplicate engagement, whereas the real power is at a local level putting a few things right.

Longden: One of the other things we did around that time was understand that some people are good at managing people and some people find it much more challenging. For those who found it challenging, we started to do a lot more local one-to-one support, and over a period of time, if they weren't able to move forward, we started conversations with them around whether the management role was right for them. We took those people out of management and put them into more suitable technically specialist roles. It became an absolute basic minimum -- if you can't engage your team with our help, then we can't continue to allow you to manage.

We used to do a lot of out-of-house training programs where managers would take time out to go to a central venue, but now we mobilize those training teams to do more work at a local level and use much more of a coaching model so our managers understand their feedback, can build plans based on it, and take action.

One thing we also learned very quickly was that there were a number of people who were very good at engaging a team, and we just left them alone to get on with it. We tried to learn from them, but they found it very difficult to articulate what they did -- it just came naturally to them. So what we did was focus our energy on the bottom quartile. We sat with these managers when their results came out to help them move forward. Our best learning came from those managers who had moved it on, because they were then able to articulate exactly what it was they had done since they had to do it very consciously and have a very clear plan. We started to use these managers to do our training and communication with other managers.

EET: B&Q was the only [do-it-yourself] retailer to receive the Gallup Great Workplace Award in 2008, and a massive 6 out of 10 employees were found to be actively engaged (more than twice the global average of 28%). That must have been an incredible boost, particularly in such tough economic times. Can you discuss how valuable this has been to B&Q and to Kingfisher?

Longden: We've won that award three years in a row now, and it obviously gives us the ability to attract talent we wouldn't necessarily have attracted in the past. That's a real benefit, but we didn't consciously set out to win -- we just wanted to do what was right internally, and the award was good recognition. We have won a number of awards, but this one above all others is really important because it's a real measure of how people feel in a quantitative way. There's very little we can do to influence the entry -- it's more about the feedback our teams give.

We've extended the survey now across all our other operating businesses, and we're just going into our third wave of it. We're doing the leadership teams first, then people who report to the leadership team with a view of two things. One is so they can see how powerful it is and how useful it is to move things forward, and the second is, it takes away the excuse for them not to do it in their business because they're concerned it records data on themselves. By pushing it through at this level, we've overcome any concerns quite quickly.

EET: Based on the "employee-customer-profit chain" theory, have you found a direct correlation between higher engagement results from your Q¹² survey and associated higher sales returns in certain stores?

Longden: Before talking about business benefits, I think it's important to recognize some of the costs of disengaged teams. The harsh reality is that in 2005, 29% of our workforce was actively disengaged, and we were spending £120 million a year just on wages of these individuals. So, from a cost perspective, we were spending a whole lot of money on people who really didn't want to be there. In the last survey, that figure has dropped to £31 million, which is a massive turnaround. We wouldn't have been able to drive some of our efficiency gains and leaner structures with the old volume of people actively disengaged. I often talk to managers about the link between engaged and disengaged employees being like a tug of war: If you've got one on one end of the rope actively disengaged and another on the other end who is engaged, you're going nowhere, and the only way you're going to move forward is by having a lot more people on the engaged end.

From a cost perspective, we were spending a whole lot of money on people who really didn't want to be there.

We've also done a healthy amount of linkage analysis with Gallup, and there's loads of data in the areas you'd expect around absence and labor turnover. Most importantly though, when we look at store teams that have had an improvement in engagement versus those that have stayed still or gone backwards slightly, then over a period of time we see a 2.2% to 2.5% sales increase and that can be as much, on average, as 6% in profit improvement.

EET: With Kingfisher being a truly international business, do you adopt the same survey and engagement program as B&Q across your other businesses? If so, have you found any challenges with regard to culture/language, for instance?

Longden: I get asked that question all the time. Yes, there are some differences, but it's very small when we look at the data. I've seen a massive range of scores from people who are basically sitting next to each other within the same business in the same culture -- and this is much more pronounced than any difference I see between countries. The biggest difference wherever we are comes down to the manager. I have teams in every country at the top and bottom of our index, and none of that's cultural; it's all down to how well the teams are managed.

EET: What are the challenges ahead for engagement professionals, given the times we are currently having to work through?

Longden: When I think about engagement, there are probably two or three things I see going on at the moment. One of the interesting things is that a downturn in the economy forces companies to make changes, and often those changes are well overdue. That can be very powerful, but companies that wait until it's raining to change the roof are making their lives much more difficult. It will be very interesting to see if we all learn new behaviors from this that mean we can consistently drive change and not save it up until it's forced upon us.

The other thing that is going to be challenging is when economic times are good, then actively disengaged people are much more likely to leave because it is much easier to find another job. The risk in the current climate is a lot of people emotionally resign but stay in the business. It increases the importance of getting the recruitment right first off and continually engaging employees, because it can be a much more tricky resolution in a tough economic environment.

The third thing which is interesting -- and I see a lot of businesses in the marketplace doing at the moment -- is using the long screwdriver technique, where the leadership is leaning right through the organization and trying to make changes at a very local level. This can be very powerful, but sometimes the local teams are looking at them, saying, "You don't need a screwdriver for that, you need a spanner," because they're so much closer to the customer and the reality of the situation. They can see what needs doing much better. The worry is we could end up seeing less communication going on because people are trying to do things very quickly and, while there is a lot of benefit in that, it's all about making sure there is the right balance in place. HR have got an important role to do in making sure that communication continues to work both ways.

This article is adapted from one originally published in the Summer 2009 edition of Employee Engagement Today. Reprinted with permission.