Telefónica UK is a major telecommunications services provider owned by the Spanish multinational Telefónica. O2 is the commercial brand in the UK and probably the company name which most of us are more familiar with; there are around 450 retail stores on many of our high streets. O2 also operates O2 wifi and owns 50% of Tesco Mobile, not to mention iconic conference venue The O2 in London’s Greenwich. The company has over 25 million customers in the UK including business and personal accounts. One of its latest innovations was installing wifi on the Coca-Cola London Eye (in August 2017) – the world’s first free high density wifi network on a continually moving structure.
O2 is also innovative in terms of HR, where a team of over 100 people based in the UK and Dublin is led by HR director Ann Pickering. Pickering joined the firm in 2004 and was promoted to the main board in 2008.
Despite her position on the board, Pickering’s view is that the HR profession should simply call a halt on the perennial debate of how to get a seat at the table. “After all this isn’t a question you ever hear from marketing,” she comments Pickering believes that the key is whether HR is influential within an organisation. “I may not have a P&L account but I know that I’m there on equal terms with everyone else,” she says regarding her position on the board.
Integrating HR with the business
Only when you understand the business can you exert true HR influence, feels Pickering. “Make sure you really understand your business as only then will you have impact,” she advises.
It is not merely that this helps integrate HR with the business and will mean that it can be influential; it means both will then be operating with a single mission. This is not about simply having a broad brush and superficial knowledge or understanding a few details about divisions and departments, or of some operating constraints across the business. Rather, it must be a detailed and well-informed picture that can drill down into every area of the business – what is sometimes described as having a business mindset.
For Pickering, this is a ‘must have.’ She explains that this means the HR team are strongly aligned with every part of the business and at those critical decision-making levels:“We [HR] are always integrated into business decisions – I would hate it if this was not the case.”
Pickering’s own career journey clearly has helped her perfect such business acumen. She worked first as a graduate HR trainee with Marks & Spencer (M&S), then enjoyed a short stint in the City with an investment firm before working for over a decade at technology firm, Xansa as a close ally of the chief executive Dame Hilary Cropper, someone who she admired tremendously.
“I learnt so much from Hilary about doing business at a senior level, understanding what key decisions needed to be taken and getting things to happen across the business; she was definitely a great influence on me,” says Pickering. “For a while I was literally the bag carrier as they say, and as the business expanded and grew I learnt so much from working with Hilary.”
Another strong influence is her early career at M&S, watching how well managers were trained to deal with customers. (She recalls a particularly fraught occasion when two shoppers at Christmas battled it out in a store over who would get the last remaining turkey.)
Comic image aside, the serious lesson Pickering learnt was about just how critical customer service is. She explains that in O2, “what marks us out from our competitors is how well we deliver on customer service. It’s so important to us in everything we design and deliver. With around 25 million customers we have got to always make sure that we are delivering the best possible service to our customers. This means there is a key role for the HR team to ensure everyone who works for us is highly motivated to deliver what customers need.” The catchphrase that the company uses is about ‘delighting and surprising the customer’ and this is a key part of Pickering’s role as HR director.
There is a strong emphasis on talent management which is supported by HR creating a company culture with high levels of motivation. This is evidenced by the recent 2017 employee engagement scores which are at the highest ever level – “the scores are amazingly good and considering we are coming through to the end of our three year business plan and had the recent uncertainty with the 2016 bid from CK Hutchinson, we’re delighted to see these high levels of employee engagement.” Getting such high scores is not easy to do in any business. But it is all the more admirable at O2, where the workforce is multigenerational and encompasses a broad range of skills, from technical to sales to retail.
This ethos of motivation is found across every part of the business. It’s a key factor which directly connects HR into bottom line issues. It provides a competitive advantage for the business and ensures this pervades the different teams in retail, finance, data and analytics, commercial strategy, technical, digital, HR, marketing, business, operations, digital, sales and service, relationship and vendor management. Pickering talks about creating a culture where there’s choice. “I like to say that it’s a hotel here not a prison, so that people are free to leave if they want to but those who do stay with us are really motivated by what they do,” she says.
It’s hardly surprising in light of all this that Pickering assesses the influence and impact of HR across the business as very high. There’s a good relationship between HR and line managers. “If I asked my boss [CEO Mark Evans] then I think he would say we are a nine or possibly a ten out of ten,” says Pickering. “The business focus is very much around our people, on the basis that it is our customer service that sets us apart from our competitors, and so our decisions will start with what will happen here for the people issues. We talk about what will be the ‘people journey’ from any decision that we are planning to make”
That’s not to say that there aren’t difficult decisions along the way. One example Pickering highlights was with the UK call centres. “It was really tough for me as I had created the call centres some years previously,” she says. “For instance, the one at Glasgow began with only a single person doing telephone recruiting from a hotel room, and when it was opened I was immensely proud of it. It really was my baby.
“So it was difficult when we finally took that decision to close the call centres. I have to say now it was the right decision; we could see that customer trends had changed and people no longer wanted someone to talk to and preferred to go online. But what we tried to do in evaluating the various options available to us – and one of these was about UK outsourcing – was to factor in what this would mean for our staff. Going with the outsourcing option meant that most of our people would then be guaranteed work for a certain time going forward, for two years’ employment. And so that’s what we decided to do. It was very hard to make that decision and I remember lots of debate among our senior team about it before we finally agreed what was the best thing to do.
“However, when it comes to such difficult times, whether it’s a single change or transformation more generally, I do feel that as HR director you need to be honest with the people who are involved,” she adds. “This is not always easy of course but it’s so important in building trust and showing people that you are trying to do what’s best for the business.”
Pickering highlights redundancies as a key tough challenge. It’s not only about dealing with those who are leaving but thinking about “the ‘remainers’ of redundancy or from a re-organisation and whether those who stay will feel guilty about their colleagues who have left the business,” she says.
Pickering is clear that with such issues there is a key advisory and support role for HR, in helping prepare line managers for difficult discussions. “I’m a great believer in practical support, and helping ‘role play’ the kinds of conversation that are likely to happen,” she says. “Partly this may be about providing new skills for managers but also so they can be to some degree emotionally prepared for what’s about to happen. These are tough issues for managers to deal with. And although preparation can never be the same as the real event, one manager said: ‘it would have been much harder for me to cope if we hadn’t taken time out to role play and practice some of the meetings, some of the key issues.’”
Fit for the future?
Talent management, both recruiting talented staff and more importantly being able to keep them, is then a critical part of Pickering’s current role. She highlights another skill that’s just as important. HR directors must also be looking to the future, whatever it might hold – while at the same time managing the business’s current challenges. “It has to be about making sure you are fit for the future,” she says.
“While I don’t know what future skills the business will need in say five years ahead, I do know that there will be a demand for different skills, and that new skills will be needed,” she says. “And HR must be able to look ahead, to make sure that we are fit for the future. I’m always looking towards the future and trying to ensure we keep up with everything.” That speed of change is not only a feature of a fast-paced telecoms industry, adds Pickering.
HR at O2 is structured on the Ulrich model. “That means I have nine business partners in the team who have that crucial commercial acumen to enable them to work closely with the business,” says Pickering. A number of these were internal appointments, people who already had a sound knowledge to build on. Pickering says: “The calibre of who you appoint as a business partner is key as you want them to be fully integrated into the business – ours all sit in their director’s teams so that they are well placed and so can ‘add value.’ If they have that commercial acumen then they can understand the business so much better, they can challenge when necessary because that’s an important part of their role too. And then it means the best business decisions will be made.”
It’s also important for an HR director to have clear parameters when dealing with different business issues. Take for example change, which can be complex, often continuous and contentious. “If you are dealing with say a re-organisation or transformation then there will inevitably be times when a few people act as ‘blockers’. I know that some experts believe there’s more value in working ‘with’ such individuals, but that can only take you so far. If they don’t identify the need for change and engage with what it is that the business is trying to do, then my advice is that if you still see blockers then you need to remove them. The change process can’t move forward otherwise.”
Diversity is high on the agenda at O2, including of course the current discussion over pay and gender. There is also a women and leadership programme and comments from delegates are shared on O2’s careers website.
Getting more women at senior level is important to the company. O2 now has three women on the board, including Pickering. “It’s really good to have three women at board level, and I can see that this has changed the debate around the table,” she says. “There’s something about diversity and bringing those different experiences together, whether that’s about gender, nationality or any other aspect of diversity which creates better, broader discussions with more debate. However, I’m not an advocate of quotas for women. In fact, I don’t know a single woman who supports quotas; they would much rather be appointed solely on their ability to do a good job rather than helping a company to ‘tick the box’ on diversity.”
HRMI eight factors of influence
Of the eight factors of influence used in judging the HR Most Influential (HRMI) ranking, Pickering highlights two in particular.
2. A track record of successful outcomes
6. Influencing the wider HR profession
Establishing a track record in the organisation is about “being able to execute and deliver what’s been planned.” Partly this ability is something which builds with time so that a HR director is capable of being a confidante to the chief executive. This was certainly true of Pickering’s relationship with previous CEO of O2, Ronan Dunne, and over the past year (since August 2016) with Mark Evans.
For this to work HR directors have to be “self-reliant and have a lot of self-confidence – you really do need both of these… for example the confidence at board level to ask the difficult questions about the people issues, as well as emotional intelligence and lots resilience as it can be a lonely job and there are tough decisions,” Pickering says. A key question Pickering highlights for HR directors is: ‘have you got the resilience that’s needed?’
Influencing the wider HR profession is the second area Pickering highlights. She has just joined ‘Step up to Serve’ a programme led by Prince Charles which encourages young people to see the relevance of, and to get involved with, social and community action. This fits well with O2’s own youth initiative, Think Big project, which aims to help young people bring their ideas to life and get their foot on the career ladder.
Pickering is often invited as a keynote speaker to talk at business conferences and key HR events and is always happy to share. This external influence is something she sees as integral to any HR director’s influence. “I think it’s the practical information that other people want to hear about from you. Your willingness to share company experience can really make a difference here in encouraging others to see the value of different initiatives.
“I see my role as an ‘influencer,’ for instance in areas such as social mobility and with a recent pilot programme for women returners that might then encourage others to make similar, small steps in the same direction,” she says. “It’s always important to highlight the business value of such initiatives – and to show the bottom line return to the business. Tie it to real business benefits rather than simply saying it’s something that’s nice to do. A business return for example from our women returners programme last year, is attracting high calibre people who because they had been away from work for a few years we would otherwise not
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