· Features

Interview: Line engaged

A better engaged workforce will be the linchpin upon which Vodafone UK's customer service and growth depends. It's what HR director Matthew Brearley is working to create.

It is a grey, wet, blustery January afternoon when Matthew Brearley, HRdirector, Vodafone UK, finally emerges remarkably fresh-faced from anall-day meeting at the Park Inn Hotel at London's Heathrow. A dozenother Vodafone European HR heads dutifully file out after him, off tocatch their flights home. It is the end of the monthly ritual for thesedirectors: a get-together to share best practice and new ideas andupdate others on new plans or current HR programmes. But as he stretchesout and settles down for this interview, one rather suspects it isBrearley who has done most of the talking.

"Vodafone UK is very much regarded as the leading country (within thegroup) when it comes to HR," he says proudly. "Launched in 1985 it isthe most mature business, and, in the past two years, I've introduced anHR Service Centre based on Dave Ulrich's HR model of theemployee-customer profit chain, core competence theory and balancedscorecards. It's these aspects that are still just coming aboardthroughout the rest of Europe."

But the former HR director of Marks & Spencer, who describes this lastproject as "phase two" of his (so far) four-year tenure at the telecomsgiant, is already thinking about phase three. "When I first arrived atVodafone, the HR function was disjointed, service-focused, but doing toomuch generalist stuff. This has now been resolved," he says. "I'm farmore focused on my next concern - our employee experience strategy,something I believe will differentiate us over the next five years."

This is not just a reference to the kind of customer service skills thatwere honed while he was at the then troubled M&S. Vodafone Group, whichmost still remember for its spectacular 14.9 billion loss in2006, a loss that caused 400 jobs to be cut at its Newbury HQ, has beenundergoing a transformation. Later in 2006 Vodafone UK severed itsmobile phone distribution arrangement with outlet The Carphone Warehouseand became a retail business in its own right for the first time. Today2,000 of its 10,000 staff work in Vodafone shops selling handsets andcontracts, the results of which have helped Vodafone announce 2007fourth quarter results that were up 15.8%.

Add to this its call centres with a further 3,500 employees, andVodafone has transformed itself into a predominantly customer-focusedbusiness. Also add on top what Brearley calls "the competitive newmarkets forming" - online, multi-media and even content to rival TVchannels - and it is clear Brearley sees his role as creating betterengaged employees as the linchpin upon which customer service,innovation and business growth rests.

"The business I am about creating is one where engagement is not deemeda chore," he says. It seems a typically rehearsed press statement atfirst, although Brearley is quick to qualify this. "These are easywords, I know, but for my role it is very much about creating a placewhere people want to be, so that we can release the talent within."

The foundation for this is what Brearley calls his 'Winning in theMarket' strategy. Although Brearley is already one of the few HRdirectors who actually have a place at the boardroom table (he refers tohis relationship with UK CEO Nick Reed as something that is "unique andspecial"), the codename adds weight to his aim of putting HR at the coreof the business. "Our company is geared for growth, so I want to be sureHR works with the finance department to drive this policy to the board,"he says.

Projects already under way include the futuristic-sounding TARDISscheme, a multi-million pound investment to redesign the officeenvironment, as well as making more of a concerted effort to allownon-store staff to work from home. "I believe a better physical officeenvironment can help staff be more creative," he explains. "We have asaying at Vodafone that we are 'red, rock solid and restless', andbetter working is my interpretation of this."

Brearley leads by example, working one day a week from home, and he hasalready helped kit out 600 employees' homes with PCs, broadband andother home-office requisites. In fact Brearley even defines Vodafonepeople in terms of whether they are either 'fixed, flex or free', whereall but the first (the fixed store workers) are theoretically able towork where they like.

Perhaps this 'making work fun, but sensibly' approach represents a more'grown-up' Vodafone. Back in the late-1990s/early-2000s things were farmore swinging, especially when it came to rewarding staff with grandcelebrations. Vodafone staff parties were the talk of the town, where noexpense was spared. Its 2001 grande bouffe for 11,483 staff at Earl'sCourt set a record for the largest silver-service dinner in history. Itwas followed a year later with a 10,000-head shindig at Newbury racecourse, ably kicked off with live performances by Westlife, Will Youngand Jools Holland. It was so raucous that Thames Valley police wereapparently called in by angry local residents to investigate thenoise.

"We don't really do those big occasions any more," laughs Brearley. "Ithink those conspicuous, big events are now a thing of the past. I wasat M&S when things really hit a trough, and at Vodafone we need to learnhow to manage change. If there is one thing the retail environment hasgiven me it's that you need a strong line of sight about what affectsperformance."

Testament to this is his continued support of 'Vodafone Legends'. Thisis a rewards and recognition system Brearley introduced three years ago.Instead of being a top-down policy, the programme is based on staffnominating their fellow workers - very grown-up indeed - and the partiesare restricted to a select few. This year's Legends - 100 of the beststaff - were announced last month. The best 300, whittled down from alist of 1,600 nominations, faced a national assessment panel, whichBrearley chaired and which featured the rest of the board. The 300 weretreated to a party at Madame Tussauds, while the winning 100 last monthcelebrated their 'legendary' status with an all-expenses-paid trip toHong Kong.

But Brearley is not cutting out all the fun for the rest of the company.Indeed, lucky employees were recently able to see F1 racing star LewisHamilton at a special staff event (Vodafone sponsors him). "As well asbeing performance-focused, I understand that we also need staff to beadvocates of the brand," he adds. "This means they need to feel part ofthe company; they need to feel they are involved in what we are. Eventslike these all help to make employees feel they fit in with thecompany."

One of the biggest lessons Brearley says he has learned when it comes tointegration was when Vodafone bought Singlepoint - a call-centrebusiness dealing with 1.5 million Vodafone customers - from billionairehard-ball entrepreneur John Caudwell. As the boss of Phones4u, the fieryCaudwell implemented a strong targets-driven culture.

"This high-performance nature came as a bit of a shock when we came tointegrate it into the Vodafone family," Brearley admits, when he wastasked with bringing these people into the Vodafone fold throughout2005. " 'Employee experience' would not have been part of the languagethere," he adds. "Some love the hire and fire mentality, but we don'twant to be like that. This is not our philosophy. We're focusing more onopportunity. If you asked staff today, they would say it's verydifferent from when Caudwell was in charge."

The indications are that Brearley's method is paying dividends. "We'reonly 14% disengaged," he says triumphantly. Is this something to shoutabout? "Absolutely," he adds. "Most organisations have closer to 30%disengagement. In 2006 ours was 26%-28%. Now that we've reduced it, I'mlooking at the difference between the engaged and the truly engaged.According to our Hay Group measure - which we do four times a year -we're 40%-50% truly engaged, which is remarkable really."

Surprisingly, though, Brearley doesn't believe it is 'his' HR thatshould take the credit. "I believe we achieve what we achieve throughexcellent leadership; our people are local, working with a team of greatleaders," he says. Moreover, he would not want it any other way. "In allmy roles, my view has always been the same: if you have a layer of goodmanagement to start with, you just don't need a lot of over-complicatedHR. My dream is not to rule over some kind of empire. All I want is forHR to be truly value-adding - that is, part of the business through theactual contribution it makes."

He surprises once more: "I don't consider myself to be an HR personfirst and foremost at all," he says candidly. "I consider my number onejob to be a member of the management board, running this business.Number two is being an HR director. I spend 60% on the former, and 40%on the latter."

It's a refreshing statement for such a clearly important member of theVodafone executive team to make. "It's only with the integration of HRthat we believe we can do some exciting things," he says. "We used to beinto phones. Now we're into 'mobile technology', and that means we needto stay ahead of the curve, and even work with partners that could soonbecome our rivals - like Google. There's a very real challenge that wewill be facing in the next few years, but I believe that with engaged,committed employees who want to get up in the morning and come to workfor us, we'll be able to lead the change."

1965 - Born Derbyshire; educated at University of Bath - engineering
1987 - Started as project manager with Exxon Mobil, progressing to
supply co-ordination manager, before moving to Associated Foods
1995 - Joined B&Q as an HR consultant, finishing as director of retail
2002 - Director of HR, Marks & Spencer
2004 - Moved to Vodafone as HR business partner
2006 - Promoted to UK HR director

Running and sailing.