Ironically, however, Debbie Meech, the woman behind the companys award-winning HR, is faced with a new problem which threatens the Freeservers prized culture. After an impressive three years from tiny start-up to serious player as a top internet service provider in the UK, the company is now entering a new growth phase. And this means having to put in place more controls to ensure work is done well and is properly focused on the core strategic goals of the business.
So far the start-up culture of speed and informality has helped Freeserve to attract the talented people it needs. Meech says that in the latest employee poll, to which about 78% of staff responded, well over 80% say they are proud to work at Freeserve. The company was bought recently by ISP Wanadoo, part of France Telecom, in a deal that valued the company at 1.65 billion (close to its original value on the stock market in 1999 before its share price rose and fell with many of the other dotcom companies). Wanadoos youthful culture seems to fit well with Freeserves and, according to Meech, the acquisition has not affected the strength of the Freeserve culture. Indeed, she points out, as many as 80% of the Freeservers polled say they are also proud to be part of Wanadoo. Meech communicated this information to Wanadoo during a management conference and says delegates applauded with delight at the news.
Meechs first three years at Freeserve were focused on the critical task of recruitment. When customer subscriptions shot through the roof, surpassing the one million mark just five months after the Dixons Group set up the company, there were only just a handful of Freeservers. When a business moves that fast, its ability to recruit the talent it needs fast and effectively becomes the critical business issue. We would not have been talking in Freeserves smart London offices in Clerkenwell in July had Meech and her small HR team failed in their task. Rather, Freeserve was so successful at resourcing that it scooped up this years Human Resources magazine/KPMG award for resourcing excellence.
In July 1999 Freeserve employed 34 people; now that figure is nearer 330. During the last financial year (May 2000-2001) the company recruited 150 people about 17 people per month. Meech and her team have found ways to attract people beyond the obvious one of competitive salaries. They enable people to work flexible hours, to work from home if they wish and to hot-desk where appropriate. They also find small but fun ways to attract people. For instance, they give Palm Pilots to all employees so they can access Freeserve content anywhere. Meech has also introduced new lifestyle management services such as subsidised massages and osteopathy as well as ironing, dry cleaning and car repair services. There is also a concierge service for staff pressed for time which is proving very popular. Perhaps, most critical of all, Freeserve encourages a culture in which all employees are challenged to use their intelligence and stretch themselves.
While there are many specific ways in which Meech has managed this huge resourcing task she always recognised the importance of the overall culture and employer brand. And now, three years later, one of Freeserves key values, freedom, is threatened by the growth of the company. Meech does not seem the type, though, to be afraid of a challenge. She is clearly a thoughtful person and has started to address the question of how Freeserve can walk the tightrope between control and freedom without losing its former dynamism.
Freeservers, says Meech, fight any sort of bureaucracy at all. She reflects on the HR task: I think that the trick is to have a process which has quite lot of flexibility in it. Its not so rigid that you cannot move it. For example, in the past when Freeservers came up with a good idea, they simply started doing it. Now they are expected to present a business case to the board before going ahead.
However, Meech stresses that she would not want this process to stamp out innovation. On the contrary, she believes, it is a necessary and useful discipline. But she would not want the review to be so narrow as to say there is no way that the company would approve a new project if the numbers dont add up. Gut feel will still be an important driver of the projects they choose.
It is time, Meech believes, for Freeserve to recruit more operational people to provide a balance for the creative staff who always want to go off and develop new projects. Operational managers will be happy to consolidate and work on existing ones. And theres a new reviewing process that enables the board, including the CEO, John Pluthero, to see where the creativity is coming from. Its a big question we have passion for the brand and were still moving things fast, the speed hasnt changed. But now we keep talking about doing less and doing it perfectly as opposed to doing lots and just getting it through. What we need to do is recruit more operational people who want to carry on a project and not go on to the next one.
Meech recognises the company is at a difficult age in its growth phase. She says, We are at the point where a company steps from one period of growth to another. You have to be incredibly smart in how you manage it so as not to lose the momentum. You can go into a stop mode and you get lethargy. So the smart move is all about how you keep it moving while going into that more corporate process-driven stage that is the trick.
Freeserve, as a young internet up-start, is perhaps showing companies which way to go in terms of employer branding. An internal booklet, entitled Living the Brand, reflects Plutheros commitment to the companys values. In the publication he says: The Freeserve brand has evolved to reflect the company values, strategy and positioning. Its implementation should be consistent throughout everything we do and become a visual expression of our excellence and professionalism.
Strengthening our brand strengthens the relationship with our members. A cynic would claim that these are mere words on a page. But Meech is clearly passionate about the companys values and believes that they will help the company continue to attract, retain and develop the hottest internet talent.
To manage individualistic, ambitious and restless souls takes some doing. Not surprisingly, therefore, leadership development is one of Meechs top priorities and she has developed a coaching service for managers who want it. She does not use one coaching firm, preferring to match the coach to the managers individual needs. She is also a fan of telecoaching which enables the process to be constant and not confined to what she regards as an unsatisfactory, one-off, four-to-five-day course. Coaching is already available to the senior team and about 25 managers have started to use the service.
Meech is unfazed by the old-fashioned view that coaches are a form of a crutch. She says, Its about working on ones strengths. She is about to select her own coach. It is about the whole individual, adds Meech. Coaching is about working on yourself. Coaches can become quite close you talk about your broader aspirations not just about business objectives. It is about your total life. Meech is clear about what she means by leadership. She prefers the term leader to manager. She says, A leader is also a manager but with an extra quality which is inspirational.
Measuring the HR impact is extremely important to Meech, though she admits that Freeserve may not have got it right yet. Currently it measures the cost of recruitment, So when it was 7,000 per recruit we got it down to 5,500 and now we aim to reduce it to 5,000, and so on. Offering staff a finders fee of 1,800 saved the company 67,000 in just three months. Meech also tries to keep the unwanted staff turnover below 5%. It used to be 6.6%.
Freeserve has also used internal researchers to hunt down job candidates. On one chief technology officer post the company was able to save about 70,000 in head-hunter fees.
One way Meech hopes to hang on to the best people is via an appraisal scheme known as evolution. This is where employees meet with their managers to analyse their performance and the things theyd like to work on. This is not about the manager assessing the individual. Rather it is for the individual to discuss what they need to do to move on. They use the companys nine capabilities such as communication, creativity, customer focus and internet savvy outlined by the HR team to analyse themselves. Then they discuss the next few months and build a personal development plan.
But how do you ensure that managers conduct these meetings regularly enough, I ask. Meech smiles and says, Our managers are paid bonuses on this, so it rather focuses the mind. To demonstrate how it works Meech describes her own discussion with Pluthero recently in which she suggested that she needed to work further on her presentation skills.
Plutheros response was that he thought she was rather good at that. Meech recalls saying, Well thats nice to know but in terms of how I feel Id like to be stretched. She adds, Its very important how the individual feels about themselves. Plutheros view in her case was, Well, if thats important to you and you feel you could stretch yourself further, go and do it.
How dependent is Freeserve on a CEO like Pluthero? What kind of succession plan is there? Meech replies, Hes taking a month off in August and nothing will change in terms of how we run the business. But if he were to take a year off? Im sure it would in terms of the type of leader we have. He has particularly charismatic qualities which you dont find in other people. Would they be right to look for someone similar? I think wed search for similar qualities and a similar style. She also reckons that the culture would remain firm: Our senior team believe in the culture weve got, its not as if theyd say lets get rid of the values we have.
So how is the Wanadoo takeover changing things? Not all that much it would seem. Freeserve does now see itself within a broader European strategy. But is it a British, global or European company? Perhaps to a generation Xer like Meech this sort of question is pretty meaningless. She doesnt want to pin Freeserve down in a nationalistic sense. She says, We see ourselves as a European company though we remain the UKs top ISP company. As for the future, Meech has HR ambitions that go beyond winning this magazines award for resourcing excellence.
She says, We want ultimately to be the number one employer of choice that is our dream. Undoubtedly Meechs leadership of HR at Freeserve has set the company well on its way to achieving this dream. But Meech remains a generation Xer at heart and she may well have moved on to other and bigger things by the time that happens.