How Tesco shops for its managers

The Sunday Times 7 April 2002

Britain's biggest grocer looks for talent among all its staff -- unlike many other firms, which focus mainly on the top 10%, says Roger Eglin

WHEN 1,000 people of working age were asked recently whether their talents were used to the full by their employers, at least a third thought their bosses underestimated them.

The answer, though predictable, was depressing nevertheless. In an economy where talent is at a premium and employers are becoming more concerned at the cost of replacing staff who are leaving, increasing job satisfaction is one of the most powerful incentives companies have.

The survey, Bringing out the Best, which has just been published, was carried out for Chiumento, a human- resources consultancy. It revealed that workers in general were motivated in their jobs and willing to contribute more to their firms. But nearly half those polled (43%) claimed to have received little or no coaching to draw out their talents and more than a third (34.9%) had rarely or never discussed their career progress.

Sheena Mason, director of learning and development at Chiumento, says: "Employers need to realise that identifying talented staff involves far more than spotting the intelligent ones in the workforce. Career-development practices such as coaching need to be put in place to seek it out."

This is a message that Tesco, the country's largest private-sector employer, has taken to heart. With more than 185,000 staff in the UK, and nearly 240,000 worldwide, Tesco is committed to identifying, developing and promoting the talents of its employees. Its track record is good.

At present, six out of the 10 board directors, all four regional managing directors, 27 retail directors and nine out of 10 of its store board directors are home grown. Last year 800 workers were promoted to managerial jobs.

But Tesco wants to do better, building on its growing reputation as one of Britain's most effective managers of people. Despite the size of its workforce, Tesco is exceptional among companies in its knowledge of the workforce. Its records show, for example, to within minutes the commuting time of every employee and the working-pattern preference of every single mother on its payroll. It is committed to filling vacancies internally rather than by recruiting and last year reinforced this policy by launching its Talent Spotting Programme.

Tesco conducts regular research of staff attitudes and 18 months ago one of the messages coming back was that staff wanted a clear policy on career development. Coincidentally, at the time the management was looking at making sure that enough talent was being generated to run the rapidly growing business.

David Fairhurst, group-resourcing director, says: "We really wanted to be spoilt for choice. We wanted to know what talent existed, what we needed and how to develop what we had."

The first move was to create one of the cross-functional project groups that are a feature of Tesco's management style to work out what to do. These groups are made up of people from different areas and levels of the business.

One early conclusion was that successful talent spotting would need more than creating a system of recording and classifying talent.

"It wasn't just about ticking boxes," says Fairhurst. "It was a major change programme about our attitude and behaviour to talent. In many companies managers try to hang on to the best talent at all costs. This is about releasing and liberating talent within the company."

Having a senior sponsor for the programme was important and David Potts, Tesco's retail director, who started 29 years ago as an assistant on a deli counter and became a store manager at 23, proved to be the ideal role model.

The starting point is forecasting manpower needs. This is straightforward and common to many businesses. The new approach starts with a manager interviewing each employee. The first stage of this covers individual performance during the year, but, apart from this, managers now also hold career discussions with staff members.

These reviews are wide-ranging, covering an employee's aspirations, attitudes, career history and readiness for a job move or promotion.

Managers are being trained to make the most of what are effectively individual coaching sessions and to spot talent.

"It takes strong leadership to have honest, open meetings like these," says Fairhurst. "Flushing out what matters involves quite a degree of skill. It means giving employees real clarity about what they can expect. We're training managers to go out and find what I call the real gem in everyone."

Over the past two years Tesco has spent Pounds 15m training front-line managers and given its 180,000 store workers a total of 4.5m hours' training.

Fairhurst cannot recall another example of a similar programme in his experience in human resources.

Other companies have looked for talent among their workforces, he says, but these explored only the top 10%, whereas Tesco's programme involves the whole workforce. "We don't believe in elitism," says Fairhurst. "When people are spotted, everyone has an equal chance. A graduate enjoys no significant advantage over those who have worked their way up."

The aim is to ensure that nobody with potential is overlooked. At talent- spotting meetings managers review people who have made their mark and in many cases will agree on a move. It requires managers to invest time in the process but this is regarded as a normal part of their work rather than something special. No complex or expensive technology is employed, says Fairhurst.

"We don't produce a mass of bureaucracy. The watchwords are better, simpler, cheaper. It's very different from what I've seen in other blue-chip companies."

As a final step, the resourcing plan that emerges goes up to the board. The first year of talent spotting is seen as a great success. The proof of the pudding, says Fairhurst, is the hundreds of new managers coming up through the ranks. "I think we have produced more managers from non-management than any other business in the UK."