Thursday 23 February 2012

David Fairhurst

HR: It's people that make the difference

Millbank Media Centre, London

Email this to a colleague

David Fairhurst is a big hitter in the HR world. He is widely recognised as one of the most influential HR professionals and has held roles at SmithKline Beecham (now GlaxoSmithKline) and Tesco. Currently the chief people officer at McDonalds (UK & Northern Europe), he understands better than anyone the challenges involved in harnessing the talent in big organisations.

The most important question for anyone in the HR profession, Fairhurst began, is “Why?”

“Why do we do what we do and why do we do it the way we do?”

Very few companies, he suggested, are really in a position where they have “truly leveraged the people power in their organisations.” Fairhurst believes that by asking some “Why” questions, we will find the answers that will release this power.

The three “Whys” that he was to share with the London Business Forum (LBF) were:

  1. WHY HR must focus on the positive as well as the negative.
  2. WHY we need to become the partners in the education of young people.
  3. WHY we must learn from marketing science.

The first, he argued, is essential because the established trend in HR is to treat things as “issues.” This negative approach often fails to get to the truth. Instead, Fairhurst explained that focusing on the positive can have strategic benefits.

At McDonalds, the first questions he asked were:

“What is it that our business needs?” and “What is it that people truly value about working in this organisation?”

For any HR Director worth their salt these are two fundamental questions. Asking these questions provided two valuable answers for Fairhurst for shaping the HR strategy. The answer to the first was “the 3 Cs” – Commitment, Competence and Confidence.

Armed with this insight, McDonalds introduced a “Hire the smile” recruitment policy. They hired individuals solely based on their attitude. Once the right people are selected McDonalds can then train for competence but key to all of this is confidence – instilling “self-belief” in employees.

Fairhurst recognises that many people have preconceived ideas about McDonalds and those who work there, the term “McJob” adding to the adverse impressions that many hold. However, there are many skills that young people can learn working for the company he contested.

Identifying and meeting employee expectations was made possible by asking the second question, “What do people value?” Fairhurst revealed that “the 3 Fs” most succinctly sum up the most frequent answers – Flexibility, Family & Friends and Future. Younger people, said Fairhurst, expect their employer to make them more employable and improve their future prospects.

The breakthrough comes, he suggested, with “the fusion of the two answers.” Combining the Employee Value Proposition with business needs is what “creates the power in organisations,” he said. For example, employees want skills and qualifications for the future and the company needs a competent workforce. Once this has been recognised you can create a strategy that answers both requirements.

This led Fairhurst to the second “Why”: Why we need to become the partners in the education of young people. The provision of qualifications for employees is a growing trend amongst organisations, Fairhurst noted. This is because when training results in a qualification, people value it more and take it more seriously, creating a “better labour pool for the future.”

The influence of an HR strategy reaches out beyond the business too. McDonalds commissioned Leeds Metropolitan University to carry out research on the company’s impact on social mobility in the local community. The study found that 44% of McDonald employees have two or more social disadvantage indicators but, working at McDonalds, 44% had improved qualifications, 79% believed the company could offer them a long term career and 96% believed that the skills they had acquired were valuable to other employers. Educating employees appeals to the importance they place on that third ‘F’ – Future.

Fairhurst’s final “Why” focussed on the valuable HR insights that can be gained by changing research practices. HR, he argued, would benefit from taking the lead from marketing science when collecting employee data. Whilst he stressed there is nothing wrong with employee surveys and questions like “Are you happy with your pay?” Fairhurst suggested, “You’re not going to get the level of insight that marketers would do if you asked them to do the same job.”

“Learning lessons from marketing science can help HR build a solid business case for its initiatives,” Fairhurst told the LBF. He has discovered some surprising patterns by taking such an approach. One such insight was the discovery that restaurants with one or more people over the age of 60 had a 20% higher customer satisfaction rate, they sold more products and had greater customer footfall.

This insight identified that there was an opportunity for increasing “intergenerational working.” “There is a mismatch in UK businesses […] between what the research very clearly tells you about young people coming into the organisation and what HR strategy is delivering.” Fairhurst pointed out that Generation Y have the lowest confidence levels of any generation before them. “They are much more willing mentees than we anticipate,” he said, and employees over 60 are willing mentors.

The central focus of anyone working in HR should be to obtain better insights, Fairhurst argued, “’Why’ is a driver of insight […] why gives us meaning.” Understanding “Why” your organisation does what they do and communicating it to your people can be very powerful as companies such as Apple have shown. Finding that meaning turns employees into ambassadors for your brand, it turns them into evangelists and releases the “people power” in your organisation, he concluded.