House of Fraser: HR in turbulent times
House of Fraser is going through a difficult time, but this won’t stop its chief people officer pushing through much-needed change
To say the last six months have been tough for retailers would be an understatement. Decreasing footfall due to ongoing, Brexit-related economic uncertainty and a steady consumer switch to online, compounded by bad weather at the start of the year, have been the main pressures – combined with spiralling operating costs.
The latest high-profile casualty of this perfect storm – following the closure of Maplin and Toys R Us in February, and ongoing issues at Mothercare, Debenhams, New Look and Moss Bros – has been House of Fraser. On 22 June the company announced its company voluntary arrangement (CVA) proposal had been approved, meaning 31 of its 59 stores will close – affecting up to 2,000 House of Fraser colleagues and a further 4,000 brand and concession staff.
The news followed a 2 May announcement of C.banner’s conditional agreement to acquire a 51% stake in House of Fraser Group. It came in the wake of a tough Christmas for the retailer (with store sales down 2.9% and online sales down 7.5% compared with 2016), and followed teething issues with its new website last April.
But none of these warning signs have made managing the HR fallout of the restructure any easier, relates chief people officer Michelle Maynard. And the CVA and store closures certainly aren’t for want of proactive change intervention over the past 12 months – kickstarted by Maynard and CEO Alex Williamson when they joined this time last year.
Joining the brand wasn’t a move Maynard was anticipating when she took the role in July 2017. She’d just relocated, five months previously, to head up HR in Aviva’s French operations. “I was based in Paris, which I was thoroughly enjoying. That was a new leadership team and we were looking at culture change…” she reports.
But then her husband, who was meant to be joining her in Paris, was offered a promotion back home. And, serendipitously, the call from House of Fraser came. “It was a great opportunity and a fantastic brand. There was a lot of potential to make a difference,” says Maynard, for whom this latter factor was the key attraction.
The state of the organisation when Maynard arrived was what (in hindsight) you’d expect of a brand now having to divest stores and restructure. Though House of Fraser – like many others currently – is largely a victim of tough trading conditions, there’s also no denying that legacy issues with leadership and siloed decision-making have played a part, says Maynard.
The organisation – despite boasting 6,000 House of Fraser employees and a further 13,000 concession staff – hadn’t had a board-level HR director for several years. “Three or four years previously there had been, but there had been a long gap,” comments Maynard, who reports that HR was also split into two when she arrived, “so it was partly in retail and partly in head office.”
She also found an organisation with “quite a flux of leadership”. “It’s similar to many legacy organisations that have strong brands, such as Thomas Cook [where Maynard worked for two years as group HR director] and Aviva,” she says. “All have similar themes in that over the years they’ve grown in silos. And as soon as you have silos you have duplication and unclear accountabilities that slow down decision-making.
“There wasn’t necessarily the understanding that House of Fraser needed to transform,” she adds. “That goes back to the leadership, which was quite old-fashioned and traditional… There wasn’t enough sense of urgency; so pace was an issue. There was lack of ownership in driving change.
In part that’s because the accountabilities weren’t clear.”
As such, when the restructure was announced Maynard’s role became two-pronged, she explains. While communicating clearly and compassionately with store colleagues and helping them secure new positions has become paramount, it’s crucial one eye is also kept on the kind of HR initiatives – already set in motion – that’ll ensure the brand’s survival and health into the future.
“We communicated the intent to launch a CVA on 2 May. On that day we successfully communicated with all our store colleagues before any external press release was sent out,” says Maynard, adding that the business is also currently working with the Retail Trust on “a retail careers alliance” to ensure all staff affected by recent high street closures are redeployed where possible.
“For any affected colleagues we have a range of careers support and guidance, including interview training and training on how to write a CV,” adds Maynard.
But she is determined that this work – though important – shouldn’t detract attention and resource from more long-term initiatives started over the last year. “All of that [work] absolutely continues and becomes really central to retaining our people, keeping them motivated and engaged and focused,” she says.
Maynard’s first job upon arrival last July was to find out what was happening on the ground, she reports. Key findings were that House of Fraser had a strong brand and legacy, strong engagement scores, good promotion methodology and succession planning in stores, and genuine care for customers.
But none of this was being supported and really harnessed by effective HR. “There was a lack of system,” she reports. “We had policies that were very outdated, mechanisms that weren’t driving performance, a lack of consistent talent management… Taking the big picture approach, what we needed was culture change. Everything we’re doing is underpinned by that.”
First steps in rolling out much more robust HR support have included: assessing store managers “with a range of tools” to make sure they’re the right people for the job, simplifying job structures in stores and in the rest of the business, and “recentring power” in the organisation so that managers have more P&L accountability and influence over their stores.
“Part of our strategy is making sure that our stores are delivering to the needs of the customer and community,” says Maynard. “We want our store managers to have more responsibility… to influence the products and services offered in their store. Because they know their customers best.”
Maynard cites the example of Plymouth, which recently went into partnership with a local museum to offer them space on the department store’s fifth floor, simultaneously embedding House of Fraser into the local community and “cutting its exposure to property”, beyond store closures. “We’ve given the store managers more accountability to understand what would be appropriate for their communities – that could be everything from having a gym to a gin bar to a blow-dry bar,” she adds.
The business has also started bringing store managers and regional directors into monthly executive meetings. “In terms of symbolic change that’s been quite significant,” Maynard comments, highlighting – on the topic of employee voice – the recent launch of a collective consultation process to manage store closures: “We’re currently seeking representatives from every store affected. We could have looked at a regional approach, but I want us to be as close to the voice of colleagues as possible.”
Another revamp over the last year that Maynard is determined won’t lose momentum concerns performance management. When she arrived House of Fraser had already moved to “a more discursive, less structured approach.” But this hadn’t been backed up with much-needed manager training.
“That [approach] is great if you’re a quite sophisticated organisation with excellent leadership and great managers. Otherwise it doesn’t really work,” says Maynard. Now “everyone has to have objectives” and managers must carry out monthly check-ins.
“The other thing we’ve done in terms of that initial analysis is looking at all of our policies,” she says. “We’ve made significant changes to maternity and paternity leave and done things to encourage flexible working… For me all the things we’ve done this year are about fixing the basics.”
The little changes have had the most impact for employees in many cases, Maynard adds. She cites a previous system that meant staff couldn’t access their discount unless they had a credit card.
“I took it to the executive team and said ‘we need to change this’, and within six weeks we had. That had been that way for 13 years… We got applause at the event when we announced that.”
Another example is ensuring staff facilities in stores match customer-facing spaces. “When I first started going into stores I’d be surrounded by beautiful products… Then I’d say ‘please can you show me the staff toilets and canteen’; and it wasn’t always a pretty sight,” says Maynard.
“I would say to the store manager ‘this is unacceptable. How can we expect our employees to deliver great customer service if this is the way the facilities look?’ They would say ‘we don’t have enough money’. I said ‘I want you to tell me how much it costs, ask for the money, and if there’s a problem come back and we’ll find the money’. Since then, anywhere I go it’s been done or is being done.”
Maynard has also made it her mission over the last year to get out and visit House of Fraser’s concession brands – something that again has only become more important in light of the CVA.
“What surprises me is that I am, to my knowledge, the only people officer who has gone to speak to any of the brand partners,” she says. “But in my view everybody works for House of Fraser.” Maynard reports that next year all concessions staff will be included in the engagement survey, and that she’s looking at opportunities for secondments between House of Fraser and its brands.
“It’s also about learning best practice because they’re doing some really interesting things,” she adds, citing the possibility of partnering on a women in leadership programme.
This is an area Maynard is passionate about, particularly 50/50 job shortlists. “Someone said to me: ‘what if the agency doesn’t give you 50/50?’ I said: you go back and tell them you won’t accept it… Of course we choose the best person for the job, but that’s a basic requirement in my view.”
It’s a no-nonsense, keeping things simple approach Maynard tries to take with all aspects of the business: “Every business I’ve worked in thinks they’re very complicated, and that’s true of House of Fraser. But we are mainly in the UK, there’s no time or cultural differences… you’re not dealing with 13 different employment legislations across Europe…”
This is especially important to remember when it comes to structure. “Previously we had up to 14 layers,” reports Maynard. “If you look at big organisations, the Tescos of this world, you’re looking at a maximum of eight between the CEO and the frontline. And we’re not that big. So it’s making sure the distance between the CEO and customer is minimised.”
Challenging accepted ways of working – and her board – doesn’t always make Maynard popular, she says. But this, for her, shows she’s doing her job. “I know I’m definitely not the most popular person in the business,” she says, adding though that this approach should hopefully soon pay off.
“Not many people know we were the first to do home delivery – in 1914. So in terms of innovation and creativity we’ve been at the heart of that; we’ve just lost our way a bit,” she says, highlighting the “green shoots now appearing” as a result of a more digital approach and of new product lines.
She adds: “This is such a great business, with such great people. We have a lot of people who rely on us; it is a big responsibility and I think actually [challenging people] is what I should do… I guess at times like this the purpose of your job becomes really clear in terms of supporting your colleagues.
“I wouldn’t want to be in a situation reflecting back and thinking ‘I should have done that’.”