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."