Over the last 2 years what specific activities have B&Q undertaken in response to the recession?
We have been working on the controllable costs over the last 12 months and we will be rolling that forward in the next 12 months looking at costs across the business.  We’ve had 2 or 3 projects around Lean and that will probably evolve into a continuous improvement type of programme rather than Lean itself.  We’ve done a lot of work in stores focused on the customer so taking out work that’s back of house and making people far more focussed on customer facing roles.  We’ve been making processes simpler for stores to enable staff to be focused on customer facing interactions.

And have you seen an impact on sales or has it been too early to tell?
I think it’s too early to tell and also it’s difficult to attribute an activity like that to be specifically sales driving as there are so many other factors that can have an impact on sales.  So there’s a very clear focus on stores activity and then in addition to that we set ourselves a very clear target of improvement within the business around costs.  We’ve managed that with stretch budgets across all department areas.

And has there been an expectation that those lower budgets will result in less people?
You might choose to say I could manage with less people but it’s not specifically driven around headcount, it’s about a general drive for productivity improvements in the broadest sense.  For us there is an opportunity to tap into the GNFR costs (Goods Not For Resale), across the business. 

And are you on track with that programme?
Yes, we’ve achieved the cost saving target we set ourselves and we’re going to roll that forward for this year.  It’s also not all about taking the saving – it can be about reinvesting the savings in growth areas of the business.  For example showrooms are important for us at the moment so we’re investing in that area. Some of the big players have dropped out of the market there – we’ve invested in our people in that area – it’s a different area of business for us - it’s commission based, it’s consultancy, it’s about visiting people’s homes

Have you been able to pick up talent that has left the players who have gone out of business?
Yes.  Those people have been available and we have recruited them.  One of the challenges for B&Q is the perception that perhaps we are not high end in showroom and our belief is that we are.  Our Cooke and Lewis brand is our best end offer so we have been revamping that area of the store to make it more aspirational, a product to be proud of.  We have been doing a lot more advertising – we’re linked into all the housing programmes on Channel 4 so there’s been a lot of brand enhancement for us.

So does B&Q feel any different as a result of the work you’ve been doing over the past year?
I think there’s a definite focus on costs and how do we make every penny work very hard for us.  The focus in stores is in trying to simplify how we work in stores and that has tied in with store standards.  There is one way of doing things now, we’ve been really clear about it – it’s the B&Q way and we’re sticking to it and we have seen a big improvement in store standards linked to a simpler way of working.  The next step for us on that is how we translate that into head office.  How do we simplify the way we do things in the store support office and how would that flow through into Simpler for Stores and how would that also flow through into being simpler for everyone here.

Are you finding the store staff getting frustrated with Head Office because they are operating in a simpler way now and Head Office isn’t?
I think store staff will always believe people in head office work in an ivory tower in a way that is quite disconnected from them!  It’s just a perception that there is but there is no doubt that although the intention is not there, we do things in Head Office which do not make life easier for stores.  We had an interesting exercise at the beginning of December where everyone in the Leadership Team went out to stores for 4 days.  We spent 2 days learning about everything and then we had 2 days over a Friday and Saturday to run the stores for ourselves.  So Euan Sutherland was the duty manager for 1 store and Martin Phillips was the duty manager for the other store. 

Would you say there is a different culture between Head Office, the Regional Team and the Stores?
No, I think B&Q as a business has a strong culture which permeates the whole business.

How would you describe that?
Down to earth.  Quite informal and non-hierarchical.  We have a value about being Can-Do which means that nothing is too difficult.   As ever with these things though that can be something which in a less positive way can lead to charging into action without taking enough time to think through the consequences.  It’s quite a family type of business, there’s a lot of loyalty, people who have been in the business a very long time.  We did an exercise last year around the B&Q values.  We had already done a piece around our customer proposition which is around “great homes for people to be proud of” so we looked to see if we needed to change our values but we ended up feeling that the values were still relevant today – we added onto them having a stronger customer centric business.

It’s a very common theme that we’re seeing not just from the interviews but also from the work that we are being asked to do – how to make the business more customer-focused.  You can understand why – in the recession, you are all competing more than ever for a share of the customer.
It’s all about, if I want to create my point of difference with the other people in my market, how do I do that.  B&Q has a strong value heritage so in current recession times we already have a strong message – we genuinely are cheaper than Homebase, Focus and the others.  I think giving great customer service is the bit that says, “if we want people to drive past our competitors and come to us, that’s a key differentiator”.  Most customers who come to our stores need some assistance partly because they don’t visit that store that often and finding things can be difficult and they may be doing a project they don’t do very frequently and may need some advice.  The shopping experience is quite complex so there is no doubt for us that we need to be great at helping our customers in store.

And what have been the implications for the HR Department in that?
We’ve had a very big emphasis on helping our staff to be friendly experts.  We’ve taken a real lead in terms of externally recognised qualifications.  A lot of people in retail don’t have qualifications so this has a real value for our people which makes a genuine difference to them and gives them the confidence to talk to our customers.  We’ve had 15,000 people who have achieved the qualifications in the last 12 months and all 15,000 of them are linked to City and Guilds

It demonstrates that we are valuing our people in difficult times and it plays through to the bottom line because they have the confidence to talk to the customers, the customers see that they are City and Guilds qualified from the badge on their apron so they feel confident that they are getting a knowledgeable service and value the advice.

A number of people I have been speaking to are saying that now we are beginning to slowly move out of this rough patch of the economy, the challenge is going to be how we hold onto our talent.  Is that going to be an issue for you do you think?
In terms of customer advisors in store, turnover this year has been much lower than usual.  We do though have a high stability in stores anyway.  We have had people made redundant throughout the year.  As well as the qualifications drive the other thing we have done in store to drive retention and morale is to have a team based monthly store bonus based on the store performance that month.  It’s paid as they earn it each month and we started that in March last year.

Has that had much of an impact?
Yes.  I think the fact that they can receive it monthly makes a difference.  It’s always an issue with store staff that if you pay a bonus 6 monthly or annually, it can feel like a long way away and if your store’s not performing it’s not a motivator.  The monthly bonus makes it a fresh challenge every month.  Obviously not every store has earned it every month but enough stores have earned it to make people believe I have a genuine opportunity to earn more.  That’s a differentiator for us compared to other retailers.

And does that tie into the work you are doing around customer focus in stores?  Do all staff know how they can individually contribute to helping their store hit its sales targets?
Yes, and obviously it’s not just sales – there are other measures that the store has to achieve and the store management team has a key role in communicating to their teams where they are against targets, whether that be stock loss, cost of sales, sales delivered, ATV etc. It gives people a focus on how they can make a difference.  So for instance it’s making it clear how they can help to raise ATV by maybe selling paintbrushes with the paint for example.

Do people measures and operations measures also feed into those performance targets alongside the sales and costs targets?
Sales, costs, stock loss are the main measures but obviously your personal absence plays into that as well.

Let’s move on to say on a scale of 1-10, how efficient and responsive would you consider B&Q to be? (10 is extremely)
We’re a big organisation – 33,000 people, 1,000 in the office, so could we be more efficient – yes definitely.  I think part of the work we have done on the cost with everyone working on it together as a team with representatives from every function has presented us with opportunities for efficiencies which would not have happened before with everyone working in their own silos.  So I think there is definitely an opportunity in a big business – we’re probably at about 6 now and we have the scope to be better and we’ve made quite a difference in the way of working which is bearing fruit and that will continue to drive efficiency as will the simpler process work in stores and head office.

And what has been your biggest contribution in the last couple of years?
I have a role at the Board which is about being the leader of my functional area so we are playing a key part in that simplification process particularly in the office.  That project is my accountability – the ways of working and the processes. For the controllable costs, the HR team has a big role to play in managing the productivity piece in stores and head office.  The other key lever for B&Q is employee engagement and that’s my accountability and that pervades across the business

Are there specific activities that you are using to drive that?
Yes, because we have used Gallop Q12 as a measure of employee engagement over the last 8 years.  In tough times we have still been able to show high employee engagement.  Even last year, which was a difficult year, we were able to improve our employee engagement.  We had 80% participation rates which is high and every individual manager who has more than 5 direct reports has a score of their personal engagement of their team so there’s a score for every store, every trading manager etc.  It’s a very good gauge for employee engagement in the business.

I want to start the next section by asking you how important thinking about the future is to you?
With Euan Sutherland joining us about 18 months ago and Ian Cheshire moving over to Kingfisher, we’ve had a very clear focus on the next 3 years which Euan is leading for B&Q and Ian is leading for Kingfisher overall.  Our opportunity is to look beyond 2012 and we’re starting to do that now – so thinking about all the changes in the world which you’ve just described, how do we evolve our 3 year strategy and what’s the broader piece on innovation and what’s Kingfisher going to do about that

So is your starting point, what are we doing now and how can we enhance that or is it in 2015 we expect customers to be wanting x so let’s work back from that?
Well, there are 2 strands to it: how do you evolve what you have to respond to the market and there will be things that are happening in the next 5 years that will have a big impact on our market, e.g. Eco which is a big potential opportunity for us and what are we doing now to establish ourselves in that market.  Then there’s the piece that says if we imagine ourselves in 2020, what could we do about that – and that’s where we haven’t done much on that and we need to do more big picture thinking.

It’s interesting that you should say that because not everyone that we talk to does spend time thinking about the future.  In fact if you remember from the Head Office of the Future survey, 1/3 of those who had undertaken cost cutting programmes had done so with no forward planning of how their organisations would be in the future.
Yes, from your breakfast briefing everyone was saying that they were going to think about the future but in about 12-18 months time…I think it’s very interesting.  One of the ways which Kingfisher is tackling innovation which will help us is that one of our Board Directors here has moved into Kingfisher to head up innovation for the Group so Andy Wiggins is the Director of Innovation for the Group, sitting on the retail board.  Inevitably a lot of what he will focus on is what will happen in B&Q.  We will be able to use that resource to drive innovation. To go back to cost cutting – it’s very easy in difficult times to make a saving but how do you do that in a  way that matches your current business need and sets you up for the future and how do you make sure those jobs don’t come back again in the next 2 or 3 years.  It’s a really tough call.

Yes it is – understanding what you will need in the future and understanding what is driving the current inefficiencies so that you don’t just cut out the obvious without understanding the underlying reasons it is a very tough call.
Yes, of course anyone can say yes I can find you 10 or 20% but what will be the implications of that and it will be a costly process and there’s the disruption to the organisation so you need to be really certain that at the end of it you get what you want…it may be the right course for you but you have to be sure that you understand the implications of what you are doing and that you get the business benefits you set out to achieve

Do you have any plans to implement any major changes to B&Q based on a future view of the world?
Not specifically.  We will be looking at multi-channel – how we can do that better and drive sales and improve relationships with our customers by for instance getting their input more.  The Eco piece is also big for us – a lot of the public don’t understand yet what the implications are going to be and the government is going to drive that agenda – they have to get people to change how they manage energy in their homes. 

What will the implications be for HR in that move to Eco?
Do we have people to deliver that proposition?  Most customers don’t have much knowledge in that area so we need people who can advise.  There will be an opportunity for people to go into homes and assess how energy efficient their homes are so we need people with the skills to do that.

Do you look outside your industry to see what you could learn from others?  For instance, Best Buy are renowned for their customer service…
Yes, and funnily enough we’ve done quite a lot of work with Best Buy on how we improve employee engagement – they use the same tool as us – Gallop Q12.  A few years ago some of our team went over to the States to share experiences; sometimes we see them at the Gallop conference where we exchange ideas.  They are very good at customer service, at looking at how you sell to different groups of customers.  They did a whole piece of work around stores to say the populations who live around this store are x and so they set themselves up to attract them.

How do you envisage your customers’ needs changing in this decade?  We talked about the Eco challenges – are there any other customer needs you foresee as important in the next few years?
There’s a big drive at the moment about people having the skills to do the DIY job themselves as opposed to the past few years where people had more disposable income to pay someone to do that job for them.  The whole self-sufficiency theme includes DIY jobs and there’s a generation of people who don’t have the DIY skills so how do we give them the skills to do that?  The concept is that people are at home with a long list of jobs they need to do and apart from general inertia, people just don’t know how to tackle them so don’t get them done

And how do you see your workforce changing in this decade?
In the last 12 months, because of the difficult employment climate, we have had a lot of people who want to work in our stores and we have had very low turnover.  As the economic climate improves we want to be positioned as the employer of choice so we need to think about that now and it’s about investing in our people and creating a brand that people are proud to work for.  In terms of the office and the management population, it’s about do we have the reputation out in the market place that attracts people and also how do we respond to changes in flexible working.  Obviously in stores the reality is you can achieve flexible working relatively easily because we operate big stores and there are lots of different options within those stores and we’ve also always had a policy of employing older people. The challenge is in the office – we have a good track record in female workers returning to work. It’s a tough challenge between managing flexibly, being more efficient, giving great service to stores.  It’s a tension we have to manage

I have some cards I would like you to sort in order of where you see the greatest challenge for B&Q in the next 5 years.  (The cards are entitled People, Process, Strategy, Structure, Measures)
We’re just starting the journey on process and we have to land it so that’s a number 1 challenge for us because we will be asking people to work in a different way.  The process work will lead to structure changes – not making people redundant necessarily but saying that we need less people here and actually we need more people over here to work on 1 of our future opportunities.  There’s a challenge there in making sure we have the right skills in the right places.  In terms of strategy we are thinking about our future strategy but in retail that’s always a challenge because there’s the immediacy of sales next week and our contribution to Kingfisher PLC.  There’s a tension between how we manage our current performance against investing time in future thinking.  We’ve done quite a lot of work around people – we still need to be working very hard at growing and recruiting talent and in terms of measures, we’ve done a lot of work on putting the right measures in.  Could they be better? Yes probably but we have made progress in making people really clear on what they need to deliver.  What we need to do now is embed the work that we’ve done.

We’re almost done now – Is there a question you would like to pose to a fellow HRD and who would it be to?
I’d like to ask Hugh Mitchell, at Shell, how he’s tackling the whole change process in Shell.  It’s an enormous business now going through a massive change, it’s scattered over many countries and they’re making radical changes in a stable population.  I’d really like to understand how they will manage the culture change.  I think it would be fascinating to be an observer.

If you could be granted 1 wish to improve the way work gets done in your organisation, what would it be?
I’d like my managers to be having the real conversations with their people because in terms of achieving great performance with people, a lot of that is in the hands of the line managers – giving real feedback and coaching their people well.

What has been the most influential business book you have read and why?
A book with some helpful insights into leadership is Jack Welsh and the Four E’s of Leadership by Jeffrey Krames.  Energy, energiser, execute etc – these are the sorts of attributes that leaders have. It’s useful when looking at your own style but also when you’re recruiting someone – I look to see if they have any or all of those attributes.

Are you reading a novel and at the moment and would you recommend it?
Yes, it’s by Adam Creed – some horrible murder mystery – genuine switch off reading