Leadership and information sharing are key to surviving an economic downturn, according to Catherine Glickman and Hayley Tatum of Tesco UK. Sarah O’Carroll speaks with the HR team of the UK’s largest supermarket chain about their HR strategies and how turbulent times are a chance for HR to prove their worth
The UK is teetering on the verge of a recession and experiencing its weakest period of growth in 15 years. Falling house prices and the global credit squeeze are reported to be at the heart of the downturn and consumer confidence is very low. Some see this as a challenge.
As many of the world’s largest franchises begin to close its doors, Tesco, the UK’s largest supermarket chain is keeping its head above water. It has a 31 per cent market share – twice that of the number two, Asda.
It accounts for £1 of every £8 spent at British shops, according to CEO Sir Terry Leahy. With sales of £52bn ($107bn) after a massive overseas expansion, it is now ranked the fourth-biggest retailer in the world behind Wal-Mart, Carrefour and Home Depot, up nine places since 2001.
Catherine Glickman, personnel director to CEO Leahy, says that responses to the current economic climate must be twofold. First, they must be launched from a business perspective and, second, from a staff perspective.
From a business point of view, she says, it’s about ensuring the right structures are in place in the business: “It’s about making sure the workload is balanced so that people feel they can actually do what needs to be done,” she says.
Sharing information is one of the most important ways to help staff through an economic downturn. Tesco learned from the previous economic downturn in the early ’90s and has tried to build on lessons learned from that time.
“I think, from the staff point of view, it’s recognising [that] the likes of utility bills and fuel bills are going up and [asking] how can we help our staff to make their money go further? It’s going back to our history and learning the lessons and sharing that through the business,” says Glickman.
Tesco has set up a team to deal with helping staff on many issues – for example, coming out of a fixed rate mortgage to move to a mortgage that works for them. And mostly it’s about sharing information so all staff know how to get some help and answers to their questions.
Leadership and mentors are also valuable during a time of economic uncertainty, according to Hayley Tatum, UK operations, personnel director.
“Going back to people that have had this experience before and using them to teach and share experience with some of our younger managers is a great way that HR can facilitate and share leadership – which is one of our core values, actually, sharing knowledge so that it can be used,” she says.
Tatum says that they have undertaken more training and leadership work to not only assist the business but to really show the business the HR department’s strengths. She says that at times like this it is crucial to make sure managers are really confident and strong to support their teams.
Glickman echoes the importance of confidence and making the best of the situation. “We want people to see this as a challenge they can thrive on rather than a challenge that overcomes them,” says Glickman.
A lean management structure also makes challenging times easier because information can flow easily from the customer right to the CEO. Within Tesco there are only six distinct levels between someone working in a store right up to CEO Leahy. So the space between the CEO and customers is very, very narrow.
“We’re talking to customers, listening to customers. We are customers ourselves. So we’re very in tune with what our offer needs to look like and how we can flex it to be appropriate and in rhythm with the current climate,” says Glickman.
“My experience is that the greatest downfall of an HR function is to be divorced from the realities of the business. So not to recognise and not to be part of where the business is really trading, operating, and what the business is all about,” she says.
Developing our leaders
From the CEO and board members, to line managers and supervisors, a large percentage of staff have worked their way and developed careers through Tesco. Two of the seven members of the board started out as delivery boys. Leahy came up through the marketing function.
Glickman’s role is to develop the senior talent of Tesco – namely the top 400 directors in the UK and international businesses. Tatum’s role is to develop and deliver the UK people strategy for the 300,000 staff in stores and distribution centres.
According to both women, the quality of the way they develop their leaders is one of Tesco’s most significant HR strategies. Employing a lot of people who have never worked in retail before – or have underdeveloped skills – and developing them through the business is part of one of their four people promises “the opportunity to get on.”
“I think our real capability is in developing managers at all levels in the business and creating very good opportunities for them to get on in Tesco,” says Glickman.
“No matter what background or walk of life they’ve come from, everyone has a chance to get on. I think that is a huge strength of business,” she says.
Spotting talent early on is the responsibility of all line managers and supervisors. But it is important, according to Tatum, that this activity is clearly measured and that managers have goals. “In the same way we’ve set objectives on their sales figures we would actually set the targets for our managers on bringing talent through. Just spotting the people and then developing them,” she says.
All across Tesco managers are then provided with the tools needed to develop these potential leaders. “Options” and “Bronze, silver and gold”are two such valued techniques that have helped thousands of employees climb the ranks to management and executive levels. “If people are keen to progress they can attend the Options training, which will allow them to move to the next level,”says Tatum.
Driving Tesco through change
Sticking to a clear annual plan has helped Tesco work through the last, difficult, year according to Glickman. The annual business plan has five broad themes – customers, operations, finance, community and people (employees).
“We measure that plan,” she says. “We set ourselves targets so we measure ourselves quarterly and we also link the delivery of that plan to rewarding our managers and directors.
“So the delivery of the plan is completely integrated into the business and it’s something we live and breathe,” she says.
Glickman chairs a meeting with the board every fortnight, bringing them together to actually look at people issues and set an annual calendar of events. It is here that other things are discussed such as talent planning, leadership development and some diversity issues such bringing women through the business, ethnic minorities and disabled people.
Overall, over the year the board and executive team have a very strong input into the key HR strategies that will be used throughout the business. “So through a year the board would look at every aspect of the way we’re managing our people and will be involved in shaping and thinking about how they wanted to evolve going forward,” says Glickman.
Absenteeism was a huge challenge which Tesco had to deal with about five years ago. It was clearly affecting customer service. It was only through the HR function being really in touch with the business that the personnel department coild even begin to deal with the problem.
“One of the great strengths of the Tesco personnel function is how most of us – the majority of us – have worked our way through the retail business,” Glickman says. “We know how the core business operates. We’re very credible in that field and we know what the business priorities are and we know how to support the business from a people perspective.”
When the absentee issue really came to the fore the personnel department worked hard to reduce it and help deliver a better service for the customer.
“It’s a really good example of where absenteeism isn’t particularly exciting or sexy in the personnel industry,” says Glickman. “But, because we knew it was a business priority, we really buckled down, worked at it, got to the root causes of it and found ways of encouraging and helping more people to come to work and the business has really recognised that it’s the personnel function really getting close to a business problem and helping them solve it.”