ARM is the most innovative company you’ve probably never heard of. The Cambridge-based silicone chip and software design firm, a member of the FTSE 100, claimed the number five spot in Forbes’ coveted Most Innovative Companies 2015 list, beating household names like Amazon, Unilever and Netflix. Since its inception in 1990 ARM has shipped 75 billion chips around the world. So when executive vice president of people Jenny Duvalier says “we are in absolutely everything, from mobiles to servers – you name it; we’re in it”, you’re inclined to believe her.
“It’s an organisation that has a deep reach into all of our lives,” Duvalier adds. And, she continues, it is not just the technology it helps to shape that makes ARM so innovative, “it’s our culture and business model”. The key word here is “collaboration”, and it’s the word Duvalier uses most regularly when HR magazine meets her at London’s Science Museum. Rather than manufacture and sell its own physical products, ARM instead only creates and licenses its intellectual property, working with a network of partners across the globe. “Collaboration is deep in our business model,” says Duvalier. “We are committed to the success of our partners. It’s why I chose to join.”
Duvalier made that choice in September 2013, having left her mark in group HR director roles at media organisations Emap and UBM. After a number of years leading the people agenda in print-centric businesses shifting their focus online, the chance to join a technology giant was appealing. And a non-executive director position at Guardian Media Group keeps her links to media alive.
Duvalier joined ARM only a few months after the appointment of Simon Segars as CEO. The time was right to rethink the HR operating model and strategy. “We had successful foundations, but as we continued to grow we needed the right operating model. In the past the HR function had a lot of fluidity; we needed clarity,” she says.
“I’m a passionate decentralist,” she adds, on the HR model she has implemented. “We have CoEs, but they are ‘communities of excellence’ not ‘centres of excellence’. We wanted to signal our collaborative DNA. It’s important not to fall into the trap of designing everything at the corporate centre and sending it out.” ARM has ‘communities of excellence’ for talent (encompassing D&I), organisation effectiveness (culture, organisational design and strategic workforce planning), reward, and internal communications. A broad HR services organisation provides shared services. Overall, 90 people in HR support 4,000-odd staff worldwide. “It’s an inclusive, collaborative model,” says Duvalier. “We wanted to be agile but have clearly defined accountabilities as we scale.”
The HR function has also rebranded. “I don’t like the phrase ‘HR’,” Duvalier admits. “We are the people organisation. It’s not about ‘human resources’, it’s about our people and making sure everything we do is in partnership with them. We have to listen and identify the pain points – those little pebbles.”
As an example of a “pebble” removed to make employees’ lives easier, Duvalier cites scrapping the requirement for managers to approve holiday: “We trust our people; they are incredibly committed.” And plans are afoot to remove formal performance ratings: “ARM is a high-performing organisation; we keep the bar to entry high. Therefore why would we have a scale that describes people as ‘good’? If we start from the hypothesis that we are a high-performing business, the default has to be that our people are high-performing.”
To further improve HR’s effectiveness, Duvalier has hired a scientist to explore how her function can apply the principles of behavioural science, such as ‘nudging’, to “help our people truly engage with the processes we are using to support them”. Taking this more innovative approach also helps the perception of her function, she believes: “It’s lovely when the people team is seen as experimental.”
Creating the conditions for innovation and collaboration to flourish are central to HR’s role at ARM. “There’s no key you can turn to unlock innovation, whether it’s traditional innovation or open innovation,” Duvalier says. “It’s about working simultaneously on multiple dimensions. We [HR] try to capture what the innovation agenda is for each group, and work out how we can best contribute to that, whether through culture, ways of working, processes… It starts with making sure we are asking those questions and understand what role the people agenda has to play.”
Despite ARM’s prowess in technological innovation, the company puts a lot of emphasis on face-to-face, committing time and resource to ensuring both ARM employees and external partners are able to meet at regular events. “Innovation happens when people have relationships, and one of the best ways to have a relationship is to have that face-to-face connection,” Duvalier explains.
A strong CSR agenda also helps foster collaboration, she believes. Employees are encouraged to engage in skills-based volunteering via partnerships with organisations like Unicef and The Prince’s Trust. “Supporting our people to step away from their day jobs, to do something different, feeds back into that element of innovation,” she says.
ARM’s model embraces open innovation by collaborating with external partners. This is something Duvalier’s team must understand. “Good ideas can come from anywhere – your direct ecosystem or the permeable membrane around the organisation,” she says. “The role of the people team is to spot the things that could get in the way.”
A more open model also means understanding how to manage a “significant” flexible workforce. “You need that spirit of partnership,” says Duvalier. “We respect you as a partner.” So, while flexible workers don’t get ARM equity for instance, they are otherwise “able to participate in the life of the business”. As she points out: “Contingent workers often end up in a partner organisation, or moving back to ARM, so investing in those good relationships is the right thing to do long term – for the organisation but also for that ecosystem.”
Re-articulating ARM’s values also helps create the desired conditions for innovation. The business now has three core beliefs: ‘We not I’, ‘Passion for progress’ and ‘Be your brilliant self’. “‘We not I’ expresses the selflessness of the organisation,” Duvalier explains. “‘Progress’ is a more inclusive word [than innovation] as we have people working in enabling functions as well as engineers. And we have a lot of introverts, so the passion is a low-key passion, but it’s intense and tangible: 94% of our people are willing to work beyond what is required to help ARM succeed.”
‘Be your brilliant self’ is about inclusion. “Being truly and genuinely yourself correlates positively with a culture of collaboration and innovation,” says Duvalier. “And the word ‘brilliant’… this is the highest IQ organisation I’ve ever worked in but our people are brilliant in another sense. If you ask them about themselves they can be withdrawn, but ask them about their projects and they light up.”
She also hopes that these beliefs will help attract more women and other minorities. D&I sits within ARM’s talent strategy, and while the firm is “tracking in line” with its peers, Duvalier doesn’t “think that’s good enough” and has put action plans in place to ensure “we are accessing more than our fair share of female talent”. Much of it is about “reaching deep into that future supply chain”, so ARM works closely with schools and is one of the lead sponsors of Ada Lovelace Day.
None of this is a short-term fix, and the fact ARM is competing for in-demand skills from a relatively small pool makes it even more of a challenge. The firm hired 900 people in 2015, and Duvalier is focused on building talent acquisition skills in-house to reduce reliance on recruiters. “We wanted to take control of that talent supply chain, growing our own talent and doing more work on talent outreach,” she says. “It’s about investing in building relationships with people before they are ready to think about making a move.” ARM also practises ‘acu-hiring’, acquiring businesses for their talent and capability.
“It’s a continuing frustration the UK doesn’t have more native talent,” Duvalier continues. “We find ourselves moving talent across global boundaries. That’s not wrong, because we are a global organisation, but we’re also committed to encouraging younger people into science careers.”
As business models flex and the edges of companies become ever more permeable, Duvalier believes purpose has never been so important, specifically “ensuring the purpose of work is fresh and defined, and that people can find meaning”. “One of the most important roles HR plays is making sure there’s emphasis on meaning, purpose and partnerships, and making sure that in knowledge-based economies we are respectful of the work people deliver and find ways of recognising it.”
“The HR function globally has a huge impact and role to play,” she adds. “As we continue to evolve as a profession, losing self-doubt and fully occupying the seat we now have is really important. [Now] is an inflection point – and it’s there for us to grasp or there for us to lose.” But it’s clear for her at least the latter isn’t an option.