· 8 min read · Features

AmicusHorizon: the proof HR strategy is at the heart of profitable organisations?

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The CEO and HR director sit side by side drinking coffee and talking about the people strategy in their business.

The more they chat, the more difficult it becomes to distinguish which one is which, such is the level of involvement from each in the other's agenda. They might, at first glance, equally be a comedy double act, as much as a business partnership.

On reading the above, are you already pondering, what organisation provides this Nirvana for the 21st century HRD?

Answer: a South London-based housing association, that four years ago was on the brink of meltdown.

And, given its role to find homes and provide communities for people who would otherwise be homeless, this is an organisation with which those in the affluent ABC1 sector of the marketing mix would be unfamiliar - a customer base many would not be able to empathise with, indeed.

Steve Walker, CEO of AmicusHorizon, and Fiona Deal, his corporate services director, with responsibility for HR, like a challenge - perhaps the greatest understatement ever to grace the pages of HR magazine.

In 2007, AmicusHorizon, had been formed from the amalgamation of six housing associations - South London Family, Swale Housing, Rother Homes, 1066 Hastings, Southern Horizon and CASA. When Walker joined, a year later, the outlook was bleak and there was certainly no room for laughter.

And this is the organisation that, at the time, was described by an independent review as having a 'distinct and significant lack of an effective group culture, incompatibility of cultures, poor performance and [poor] customer focus'.

Four years on from this - and three years after Deal (whose previous role was a senior HR position in corporate finance at Bank of New York), launched her HR strategy in the company - the tables have turned.

A mark of the profound change is that the organisation swept the board at the HR Excellence Awards last month. It picked up gongs for learning and development, best HR team (Not-for-Profit/Third Sector), internal communications, employee engagement, CSR and the overall HR Excellence Gold award while Walker was voted CEO of the Year for the Public/Voluntary sector (see pages 51-93).

Before this HR intervention, the situation was so dire the housing association's regulator, the Housing Corporation, now the Tenant Service Authority (TSA), had placed AmicusHorizon into regulatory supervision on account of its poor customer service and weak governance. The previous CEO had left and a new board had been appointed.

In October 2008, Walker joined, bringing with him 20 years' experience as executive director at leading housing association, London & Quadrant.

Having appointed his team of directors (Paul Hackett, chief operating officer; Sarah Smith, executive director of finance and resources; and Deal), Walker with the team devised their "big hairy goals". This is not a slang term he uses to describe them. It is included in official documents.

Hairy goal one was to increase customer satisfaction; hairy goal two was to maximise business performance; and hairy goal three was to ensure the organisation a place on the Sunday Times Best Company Survey.

Walker laughs: "What it shows is, for any organisation wanting to improve, the key is to have belief and never self-limit."

But having made 10% of the workforce redundant during the period of mergers, the directors realised staff were disengaged. Thrown together from competing organisations, staff were disconnected from the newly-formed AmicusHorizon group.

Deal stepped up to the plate. "We didn't have the luxury of throwing megabucks at the problem," she says. "But we convinced the board to support our people strategy. We went back to thinking, 'what is great people management?' We wanted to harness employees' goodwill and energy and to do that we had to give them something to believe in. The best bits of the organisation were not sharing ideas and we had to make them want to do something."

Walker and Deal took the decision to act transparently and quickly, embarking on a road show in 2009 to meet each and every member of staff. Employees were informed a line in the sand had been drawn and no more redundancies would be happening.

"We told our staff we wanted them to love their jobs," adds Deal. "We told them there was no longer a group of organisations - but one. And it was 'us'."

Walker picks up the story. "There were two types of employee," he explains. "I call them winners and cave-dwellers. The winners were enthusiastic about the future and the cave-dwellers were those that disagreed with virtually everything we said. We either had to turn these people around and motivate them - or get them out.

"We just said to staff, 'tell us all the crap. Tell us what you don't like about the business.'"

"And they did," Deal interjects. "But this was important for us. We asked staff what companies they liked and what companies they wanted to work for - we took the ideas from this and I used it to create our new value proposition.

"The things staff didn't like about the organisation gave me the basis for the first year of my action plan. Basically, the organisation had been allowed to fall apart and staff had been unable to cope with it. So I had to sort it out immediately."

Deal devised a new pay grading system for employees, so everyone knew what they were paid and why. And the management team addressed other employee concerns.

"The noise just went away," explains Walker.

The next step for AmicusHorizon was its 'summer of engagement' in 2009.

Walker explains: "We said to employees, 'we're new here - so tell us what you are good at. Tell us where this organisation could be brilliant. Tell us what great looks like.' We addressed problems, we cleared the decks of barriers and we were ready to move forward."

The 'what great looks like' idea became the basis for a three-year turnaround plan that was launched in 2009.

At the start of the scheme and for the first time since he joined AmicusHorizon, Walker addressed every member of staff together at the first company conference.

He says: "I stood in front of employees and told them: 'The bullet train has left the station and is hurtling down the track. Jump on or jump off, if you want to - but don't get in its way.'

"We ran 'planning to be great' sessions with every team. This was their chance to set out what great looked like, so every team had a plan. The team plans fed into the strategic plan, giving a golden thread.

"We knew what we were aiming for. Not every organisation is really clear. We got staff to fill in the detail - so they owned it. Six months later, the teams were able to show all the barriers had been removed. This proved senior staff listened and acted. More importantly, staff didn't have anywhere to go. They had identified what great looked like - they just had to deliver it now."

The organisation moved quickly to address the issue of customer service, investing in the Gober Method of customer service, made famous by retailer Marks and Spencer, that seeks to give the best to the customer.

"We wanted staff to be positive and solution-focused and take a positive attitude to customer service. A positive first response to difficult customers is everything. We needed to flip people's mindsets and make this stick," says Walker.

Deal continues: "We brought in motivational speaker, Michael Hepple [author of How To Be Brilliant]. It was a leap of faith to use him - but he was like a double shot cappuccino of energy in the organisation. He boosted our pace, energy, teamwork and fun."

Hepple started work with the executive team, taking them away for a two-day retreat under the banner, 'if you always do what you've always done, you'll always get what you always got'.

"This was a breakthrough experience for us," says Deal. So much so in fact, that the event culminated in managers each physically breaking through an inch-thick plank of wood.

Deal adds: "Everybody wrote on the wood one of their self-limiting beliefs and then we asked them to break it. Everybody was out of their comfort zone, but they were all really motivated. They learned the only people holding them back from breaking through was themselves. Everyone smashed their wood and when they did, the rest cheered. It was child-like delight - but it was also remarkably effective."

Following the success of the training for managers, it was rolled out to the rest of the staff.

The company also introduced one-to-one sessions, giving managers the opportunity to embed the culture and value and appreciate staff. This allowed managers to test for corporate engagement and to see whether staff were committed to the organisation's culture and values.

"We are relentless," says Walker. "We test our managers to ensure they model the Gober Method. We make them do two-hour Dragons' Den-style interviews annually to ensure they model the Gober and Heppell message and don't just give it lip service.

"We believe managers have to lead from the front. Our mantra is, never accept or give average service, to customers or colleagues. Consistency is the key, though, so again, if managers don't role-model it - from the top - it is unlikely to permeate the organisation. You have to be clear about what you want and be relentless."

Three years after breaking through the barriers holding it back, by 2012, customer satisfaction with AmicusHorizon was at 97% (hairy goal one). The organisation is homing more people quickly, as its average re-let time for empty homes is 13.5 days (for peers it is on average 30 days) and only 0.35 of its homes are vacant (hairy goal two).

In the Sunday Times Best Company survey, it achieved ninth place not-for-profit, 14th overall and special award for best learning and development programme. Hairy goal three duly sorted. It also achieved Investors In People gold, which only 1% of UK companies have been successful at.

"Cultural embedding of staff engagement led to £7.8 million value-for-money savings in three years," explains Walker. "In fact, the financial turnaround has been so successful, we received a AAA rating from Moody's - and £100 million bond in March 2012. This is better than Greece and Italy."

He adds: "We have seen enormous change, internally and externally. When I arrived in October 2008, it was just when the economy crashed. We have had a change of government. Out went the Audit Commission, the Housing Corporation split into the Homes and Communities Agency and the TSA. We have had a new government and a big change in how it funds new homes - oh, and the collapse of the banking structure.

"Our own staff didn't want amalgamation. They were disillusioned with successive management teams and mergers. There was a lack of belief and confidence the new team would deliver. Morale was low, Ts&Cs had been weakened, we were in financial difficulty and performance was average.

"So our whole turnaround was predicated on staff engagement and getting their hearts and minds. We haven't been able to give staff a pay rise - and they still voted us up there."

Walker and Deal's bullet train is showing no signs of slowing down. Staff are on board, so the CEO and HRD are shifting gear.

"I am drafting another strategy called 'Our People II: Beyond Brilliant'," says Deal. "We want to be number one in Best Companies. We want to lead our sector in the country - and we want to be beyond our peers. The sector is traditionally inward-facing. We will never be a household name - but we can be better."

The firm is also undertaking what Walker describes as a "mini-restructure", in a bid to become more commercially active. Deal explains: "This is realistically gritty hard work - but our staff fundamentally change people's lives. So happy staff equates to happy customers and, in turn, business success."

Could this be the secret of the turnaround? Is it the proof we've been waiting for that people strategy is not just a factor in business success, but fundamentally at the heart of a profitable organisation?

"Some CEOs see the 'people bit' as the role of the HR director," says Deal. "But the person at the top of the organisation is the one who instigates cultural 'norming and storming' - it is the CEO who articulates the core values and Steve [Walker] puts people first. This is aligned throughout the management team. The FD allows staff to manage their own budgets. Our staff have been inspired to cut costs and they made nearly £8 million of savings. Now we are encouraging staff to consider risk strategies - and it works for us.

"There are four corners to this business: the COO thinks about the customers; the FD thinks about the money; the HRD thinks about the people; and the CEO thinks about the future. My HR strategy sits underneath our people strategy - and this is what this job is about for me."

The AmicusHorizon double act continues to the end of our interview. Walker comes in: "I genuinely don't believe any organisation can work to its optimum unless there is a link between leaders and people."

And Deal chimes in with her own vision: "I devise the HR strategy - but this flows out of our people strategy and our people are always at the top."

Does that answer the question?

Amicus Horizon in a minute

AmicusHorizon provides homes and services to communities across London, the South and South East of England. It was formed in 2007, from the amalgamation of six housing associations - South London Family, Swale Housing, Rother Homes, 1066 Hastings, Southern Horizon and CASA.

The organisation is committed to providing more than bricks and mortar, but works to improve the lives of residents through innovative programmes and training schemes, such as resident involvement and empowerment.

Managing more than 28,000 homes, AmicusHorizon offers housing solutions from general needs to housing for people with care and support needs.