The last time HR magazine interviewed the HRD of O2 - the UK's third largest mobile phone operator - it was May 2007. Dominic Mahony was in the HR hot seat, basking in the success of the company's 'Thanks a Million' initiative - a scheme that promised to pay each of its full-time employees a bonus of £1,000 if the company grew its overall customer base by a net one million during 2006. In spite of the odds, but buoyed up by this incentive, Mahony said he watched a transformation ensue. Staff knuckled down and smashed this ambitious target to end the year with 1.65 million new customers and 17.6 million in total.
Two years on - Mahony having moved on to become HRD of Hachette - history may be less kind about this massive (£10.5 million) staff payout. Just four months later, something happened that saw just as many customers flock to O2, without staff needing to lift so much as a finger: the event was the arrival of the Apple iPhone.
Since the iPhone's launch in September 2007, with O2 as the exclusive operator, things haven't been quite the same. Within months 1,427 new jobs were quoted as being created as a direct result of the iPhone's arrival: 700 were added to its customer service call centre in Glasgow while 727 more staff were recruited for stores to demonstrate it. They would all have been kept extremely busy; at its height O2 was selling 40 iPhones every hour. In February this year O2 announced it had added its one-millionth iPhone subscriber - 390,000 of those were added in the past three months of 2008. In fact while parent company Telefonica was earlier this year reporting a 20% fall in profits, in the UK additions of monthly-pay customers were up 80% on the same period last year - all down to the success of Apple's super new product.
"O2's performance isn't just down to the iPhone," insists a good-natured Anne Pickering, the current occupant of what was Mahony's chair, as she sits in the company's plush Slough head office. "It has certainly helped, but O2 got exclusivity with Apple because it was already a great company. It was our existing success that helped us gain more."
This nod to her predecessor's achievements is a shrewd move. Had he stayed, Mahony's plan was to shift focus (and staff rewards) from customer acquisition to customer service, and the recent bonanza of new customers (often followed with stories of staff inept at dealing with queries) has meant Pickering has been unable to avoid changing this. Keen to make this legacy her own though, Pickering - who has been in the job since 2008 - describes her purpose as wanting to "create fans". "Our plan is to turn our customers into fans," she declares. "In fact our mission is to have twice as many fans as our nearest rivals, but to do this we also need to turn our employees into fans too."
Twice as many of something you cannot measure? For such a numbers-driven business, the notion of 'fandom' suddenly seems very imprecise. "Fans forgive you, they stick by you through thick and thin. This feeling is what we want to create among both customers and staff," she adds, still failing to really say what 'fandom' is. But Pickering is adamant she will be able to measure it and, to prove it, says it forms part of a three-year business plan: "In saying we want twice as many fans, what we're saying is that we want staff to see we're not just about customer service, but about engaging with customers at a deeper level - with their hearts and minds. We want to go a lot deeper than simply customer service; we've always had a measure for this."
Pickering is completely straight-faced about this surprisingly tenuous concept, and you cannot fail to trust her on this. Perhaps it is just a PR-friendly umbrella for describing a series of initiatives she go into more depth about in terms of the organisation she wants to create. "We have a series of phrases that sum up what O2 is about - being trusted to do a good job; having a manager there for you; being a great place to work and being thanked for a job well done," she says.
"They sound simplistic," she concedes, "but they represent a real change in tone for us, and they are backed up by real policies. For instance, significant new work is being put into the employee/line manager relationship, with capabilities around the concepts on 'connect, prepare, lead, grow and deliver.' For the first time this year, we've created an employee survey called 'Reflect', which measures how well managers lead, and managers will not get their bonuses unless their Reflect score is above 71," she says.
"I've also sat down with the board and assessed all of our senior managers on their aspiration and performance potential," she adds. "As well as spotting future leaders. It's just as important for me to know which managers don't aspire to certain roles. Again, this has not been looked at before."
By focusing on such policies, Pickering says she hopes employees will understand the 'what's-in-it-for-me?' factor - often the missing link to achieving 'fandom'. "If we get our promise to employees right, that's when they transfer their enthusiasm to customers," she adds. "For instance, we knew pay was not a motivating factor for staff (it came sixth in a list of priorities in a recent staff survey), but we discovered making pay go further was. So, we created our O2 Rewards online portal where staff can choose from a range of flexible benefits, and access a learning fund. Here, if staff set aside some of their salary each month, we'll match it, to enable them to pursue some form of self development." Activities staff have been able to pursue include driving lessons, and, in one case, an employee took the chance to enrol on a jewellery-making course.
Pickering knows small differences make big results. When she added a 'perks' function on the portal - a facility that enables staff to find discounts on everyday purchases - 50% of staff registered straight away. In just five months, staff spent £1.2 million, collectively saving £350,000. A confidential helpline for employees, run by Accenture, has also been well-used.
O2 also reviews trends that could be relevant to staff. On the back of newspaper reports that many more people were opting for UK-based 'staycations' its rewards team introduced extra discounts on theme parks, hotels and theatre tickets.
"If I were to sum up my role," she says, "it would be about the impact I can make on the employee experience. I'd much rather be seen like this, than be the person who bangs on about stuff without delivering any results."
With her enforced focus on service - measured more rigorously by the TNS Prognostics Customer Satisfaction Index (the quarterly service to the mobile industry) - Pickering believes she can still have an impact on the employee experience. A recent innovation has been the introduction of store 'gurus', whose main job is to get customers excited about a store's products and services. Because these people are technology enthusiasts, rather than sales people, Pickering says she is able to provide an alternative career path for sales staff who may feel they have gone as far as they can in their current role.
"So far we've created 56 gurus, but we're looking to find more," she says. "Trials show that customers like them - one store's footfall increased by 50% when we installed one, and employees get a new direction too." She added: "We're looking at forming a community of gurus and giving them an opportunity to share ideas and experiences."
Of O2's 11,500 staff, some 4,200 work directly in customer service, and this does not include its 2,500 retail staff. But since Mahony's reign, Pickering is right - it has not just been the iPhone that has blossomed. The whole company has diversified. Broadband services now account for nearly 10% of total revenues, and they are growing 10% year-on-year. What will please Pickering is that customer service is on an upward trajectory here too. In April this year O2 was actually named top broadband provider by broadbandchoices.co.uk - which sampled the customer satisfaction of 10,000 people.
Pickering says she always wants more though. Perhaps the project that will achieve it also sounds the most modest. But it is one she believes will have the most impact - moving the head office into one giant building (the one next door, in fact, to where she sits now). The first phase of it starts this month.
"We're creating what we're calling a 'Slough campus'," she says proudly. "October is the start month. The aim is to have the move completely finished by July 2010. We have craved this for a long time. The idea is to have one company and one building; to foster a more collaborative culture; and to work in ways that are more efficient. We believe knowledge-sharing will improve through more personal interaction, while desk-sharing and flexible working will be the norm," she says. In fact Pickering and her team (who have been testing out the virtual office for the past 12 months) are already leading by example - only five of her HR team have a permanent desk.
Listening to Pickering outline all her plans is like listening to a great orator deliver an important speech. "It's an exciting time in the market, it feels like my work is never done," she confesses. Her work may be unending, but Pickering is an HR director who gets things done. By the end of my time with her I am certainly a fan, and if 'fandom' is her ultimate aim, then this mobile company certainly has no worries about the future of its people.
1961: Educated at Seafield Convent Crosby, Liverpool; University of London - English degree
1983: Joined M&S as graduate trainee
1986: Appointed HR executive, Fidelity Investments
1988: Moved to Xansa (now Steria) - held various roles including HR business partner, employee relations manager, graduate recruitment manager
2004: Joined O2 as head of HR customer service and retail; then head of HR 02 UK; appointed director of HR, February 2008
Outside interests: Running; theatre; gardening
