· Features

View from the Top: Interview with James Timpson managing director of Timpsons

The CEO's view of HR has a huge impact on the role of the HRD. In the first of a new series James Timpson reveals his unconventional take on how the function should work.

You can just imagine the PR folk and their acolytes straining to warn against it - a high-street chain that not only employs recovering drugs addicts but has them serving customers while still hooked on methadone. It's commercial suicide isn't it?

Try telling that to James Timpson, managing director of Timpsons, the key-cutting/shoe repair empire that now has more than 830 stores nationwide. He refuses to call these people criminals (he uses the term "foundation colleagues" instead - adding jokily that 50% of them still plead they "didn't do it"). He thinks they are "superstars".

"Among the 80,000-plus people in prison there are some real superstars, so I'll have them," he says, amazed that more companies do not hire from prisons. In fact at the Manchester head office in which he sits, three women are there on day release and are then locked up at the end of their shifts.

Timpson accepts there are probably other businesses that take talent from the local jail but tend not to shout about it because "the right-wing papers don't like it" and any negative publicity might worry other employees. But as a privately-held business, the company has more freedom than most to stick two fingers up at the Daily Mail and adopt unusual policies. And Timpson seems to positively revel in taking a maverick line with the family business - just like his father, chairman John Timpson, has done since he undertook a management buy-out of the business in 1984.

This move took the company back into family ownership, a return to the status it had enjoyed for more than 100 years after beginning life as a shoe retailer, founded by Timpson's great great-grandfather in 1865, and before its sale in the 1970s following a family falling-out. Timpson joined the business in 1994 and has helped his father grow it from 118 repair shops in 1987 to its current 830-plus stores today, with a turnover of more than £150 million.

A core tenet of the company is that the people on the front line - its counters - are the real stars. The sole function of everything else in the business, including the 160 people at head office, is to support their activities.

But don't expect this employee-centric philosophy to be supported by a traditional HR infrastructure. For the group's 3,000 colleagues the company employs a tiny personnel team comprising Guy Hamilton as head of people support (who reports directly to Timpson) and four regional support people who each look after the shops in their specific regions.

In addition, there is a member of the team occupying the role of 'people person' who is assigned to do 'cuddly stuff' like remembering birthdays, representing the company at funerals and generally looking after colleagues in distress. The people support team is completed by a dedicated health and safety officer. The payroll function is handled by the finance department.

In describing this structure Timpson says: "The principle is that we don't believe people support (or HR) is there to support company policy. It's to help colleagues in the field with their problems. For many HR people their 'Cup Final' is to do a big sacking whereas ours is to simply take on the questions and issues of our staff."

Timpson is strident in his views about how HR departments tend to operate in other organisations. "They try to take over. Every business we've taken over has had a bossy HR person. It's not the most important part of a business - HR is to support the front line; it is not there to tell staff what to do."

Timpson has had plenty of experience of other companies' HR functions - mainly because he has bought many competing operators and folded them into the larger Timpson chain (including the Max Spielmann photo-processing business). Unsurprisingly, Timpson regards HR structures as disruptive to his business because he prefers to operate in an open, uncomplicated way with what he describes as an "upside-down management structure". This largely involves trusting the store staff to simply "get on with the job" with as little interference from head office as possible.

This effectively leaves store staff running their own businesses. Many other companies claim to operate in a similar way but Timpson says he really does leave store teams to order their own stock and, unusually, set their own prices. "They can charge what they think. We also encourage them to do some jobs for free and to get the customer to put money in a charity box instead."

The company only has 'price guides'. It is up to store staff to haggle with customers if they wish to. Timpson believes this brings out their personality. And personality is vital as it is the only aspect that is taken into consideration in its recruitment process.

"It's based on personality and not on what they have previously done. We like happy, cheerful lively people and not dull, moody miserable, dour individuals." He adds: "I would not take on Gordon Brown." In fact he says there are very few politicians he would employ, before realising he is on rather sensitive ground: his brother Edward is the Conservative MP for Crewe and Nantwich.

The training of area managers and assistant area managers to spot the necessary character traits in potential new employees is critical to the success of the recruitment process. Identifying the right people involves videoing candidates at the job centre and analysing their behaviour.

The task is made a little easier by the fact 50% of recruits join via the 'introduce a friend' scheme. And there is also a waiting list of 200 people that Timpson says includes specific individuals who are currently employed elsewhere but who have been lined up to take a job when one becomes available.

"If you've got people lined up then you can take the best of the crop. If we like them, then we will wait until we get rid of the worst members of our existing staff," he explains. Unlike the superstars in the business these mere mortals earn the "drongos" moniker.

Politically incorrect this may be, but these are people who have failed to deliver on the key attributes of putting money in the till and "acting the part" - dressing smart, not smelly and not being rude to people.

Dismissing people as drongos and getting them out of the organisation as quickly as possible seems a harsh way to operate. Timpson admits it has not made the company popular with everyone. But he regards it as the fairest way to deal with staff he regards as holding back the other members of his team.

"It's our fault for taking them on," he concedes. "We do not employ people who are going to be a handicap. It's our duty to get rid of them as fast as possible. If you treat them fairly and honestly then you are fine. We are honest and we do not go around the houses (when getting rid of people)," he explains.

In order to ensure the company continues its record of being rarely involved in employment tribunals Timpson says his area managers are given plenty of training, involving lots of role-playing, to ensure they perform this sensitive role successfully and most crucially, within the law.

Despite suggesting most people leave the company as friends, Timpson indicates that anybody who does not like confrontation had better forget about considering promotion to the position of area manager in the business.

In keeping with the unconventional nature of the rest of the business, such promotions are not done on a formal basis. All Timpson will divulge about the process is that "if you are good then it will be a bloody quick promotion, and if you are crap then you'll leave".

As well as appealing to people who might otherwise find it tough to find employment at other organisations, the Timpson business also attracts people because of its bonus scheme. This equates to shop staff being paid 15% of the amount they sell above their target, which is set at 4.5 times their wage level. The bonus for each employee works out on average at £85 per week. Although this sounds attractive, Timpson admits remuneration is structured so that the business "takes as much money as possible on as little wages as possible".

What is without doubt one of the big (catch-free) attractions of Timpson is the network it has available to help its employees when things go wrong in their lives. This includes its hardship fund that provides loans to employees. Around £300,000 is deployed at any one time. He suggests the reason other companies don't have such loans available is because finance departments question what would happen if people run off with the money. At Timpsons an impressive 99.8% of loans are repaid in full. "The loans are the best money I spend," he says. "I get back 20 times more than I loan out as these colleagues work with enthusiasm, loyalty and commitment to us."

Although the people side of the business is strategic, Timpson says it is different from the norm because the policies involving staff are not implemented by an HR department. In addition to his small people support team he says a lot of it is down to the family: "It's done by me and my dad. It's called culture. I'm the ambassador of culture."

This ambassadorial role involves spending three or four days per week in stores. The time spent in each outlet may be only 20 minutes but Timpson says this is enough as the visits are not about details. "I'm not interested in stock levels or whether there is a clean sink at the back of the shop. I just want to see colleagues and have a chat."

Such an unusual strategy seems to be delivering results as new shops are being added at a cracking rate, helped by the recession, which has made it easier to strike a decent deal with landlords. The company is also opening more units inside supermarkets as its service-led proposition is proving a strong footfall driver for the big grocers.

For thrifty customers in these harsh, tough times, Timpson stores' average transaction of £8.50 is probably its best attribute. But if the employee serving is not a 'drongo', that figure could be increased with a bit of savvy pricing.