Personal investment

Your company’s reputation is a precious and fragile commodity. It can take lifetimes to build but can be shattered in the blink of an eye. A favourable reputation will most likely equal a booming intake and ample profits; a bad reputation will result in a crippled business with little hope of recovery. Placing that reputation in the hands of your employees can therefore seem a highly risky move. According to research, some 78 percent of consumers still trust customer recommendations and feedback over a company’s own marketing message. With this in mind, a single bad day for one member of staff can have an alarming knock on effect on your business. One rude, grumpy or irritable shop assistant could be responsible for a missed sale, for a series of dissatisfied customers, or for a bad review that will pass by word of mouth through an endless chain of friends, colleagues and social networks, haunting your business for disproportionately longer than is necessary.

The environment for retailers these days is less than pleasant; in fact it is downright hostile. The recent economic maelstrom that rippled throughout the world has instilled in consumers across Europe a reluctance to part with their hard-earned cash, and next generation retail platforms have the exposed old-fashioned and out-dated retailers. Independent businesses have succumbed to the crippling overhead costs and reduced sales. Stores that lined our streets throughout our childhood, stores we assumed would be around forever, have stagnated and withered into administration. Now is the time for minimising risks, not allowing them to fester.

With all attention turned to developing a strategy for success in hard times, that man management cliché of 'look after your staff and they'll look after you' has become a secondary concern. The benefits of an engaged, positive and well managed workforce are so unquantifiable that it is often overlooked in favour of a new marketing strategy, better display or improved product range. However, according to a survey carried out over a four-year period by American market research firm BIGresearch, knowledgeable, available and friendly staff were the most important things consumers looked for in a retailer. Around 80 percent of the consumers asked claimed that they would travel four miles for excellent customer service. Similarly, 17 percent of consumers stated that they would never return to a store after a single instance of poor service; 40 percent would boycott a store after two bad experiences and 28 percent would ignore a store after three. With this in mind, those corny human resources mantras seem a little more urgent.

Company Profile: Creativ Company

"We're trying to run a business where every employee sees the work as though they were self employed," explains Anders Lindhardsen, Director of Sales at Creativ Company, a Denmark based arts and craft retailer. The 10-year old company has grown from 2 people to a 130 strong staff base since August 2000, and during that time has regularly found itself a frequent award winner for its workforce management practices, cited as one of the best places to work in Europe. While Creativ Company is certainly small, and a workforce of this size is much more manageable than one 10 times as big, Lindhardsen argues that not only is this level of growth unheard of for this industry in the tiny country of Denmark, but it has only been made possible by the strength and flexibility of the workforce. "When you grow fast, sometimes you need to really work hard, and then you'll have other periods when it's more quiet. You need a flexible work force. There's a lot of trust in this."

Trust seems to be the biggest issue for employers such as Creativ Company; as Lindhardsen reiterates throughout our conversation, the retailer's success has resulted from a practice of empowering its employees to take responsibility for their own work rate. "[The employees] actually have a lot of power in designing their own jobs, and designing their own tasks and team and that sort of thing," he explains, "and then we try to be aware of creating a good work place."

There seems to be an underlying competitive and ambitious edge to the Creativ Company business sentiments. Lindhardsen explains to me that the company was founded on a desire "to create the best workplace in the world". Indeed, creating a strong, employee-focused work environment has certainly been a deliberate business tactic for Creativ Company, however its success has not merely been born from strong management practices.

"It's something that starts, actually, when we hire a person," says Lindhardsen. "We are very much aware that we are looking for the skills that fit the job, but also we want to hire people that want more out the job than just a job." He goes on to tell me that the company is fairly rigid in its system of employing people with the right attitude and work ethic, demanding that new recruits are positive and willing. "I think we're quite honest about our expectations in our company," he adds.

One of the foremost practices that the company undertakes in order to generate such a positive working environment is to help its employees strike the right balance between their homes life and professional life. Lindhardsen highlights that in order for the balance to be met, both the employees and management must understand that it is a matter of give and take. He likens the system to a personal savings account for each employee. When the staff work harder or give a little extra to the business they save up in their savings account, he explains, and then they have something to draw from when they need to.

Lindhardsen goes on to outline that Creativ Company has been reaping the benefits of this system during the financial crisis that has destroyed so many similar business in the last two years. "The crisis has been hard on our industry in Europe, and we are still supplying some good results financially. We have been able to actually increase our turn over and still employ more people during the crisis. And I think that's because we have employees that are actually willing to go the extra mile when it's needed."

Social diversity

While Creativ Company's engaged workforce has undoubtedly helped the retailer to flourish throughout the recession, Lindhardsen touches on another benefit of running a company in this way. "From a marketing point of view, the customers like businesses that are taking a social responsibility and doing more than just focusing on money," he says. While this may seem like slightly cynical ploy, it is impossible to deny to company's social standing. Between 10 an 15 percent of its workforce are employed under a special needs programme; this includes staff with a disability that would ordinarily hinder their ability in the workplace, or staff who suffer from stress related illness and struggle to cope in another working environment. In addition to this the company operates a rolling 12-week internship program, during which it takes on 12 interns, who have been out of the workplace for a long time for whatever reason, and help them to adjust to life in a working environment. Lindhardsen tells me that Creativ Company will take on a number of the interns on a permanent basis at the end of the program; for those that are not offered a job, the company also runs an agency through which these interns can be placed in employment in businesses in the surrounding community. "We also do a lot of conferences where we participate and tell them how we're doing things," he says. "And it's not that hard; if you just want to do a little bit extra, you can actually help a lot of people. We try to influence a lot just by being a good example." 

Operating in this way has presented its share of challenges. "Conservative businesses think that it's a bit odd that you want to put that much effort into creating a good workplace," Lindhardsen reveals to me, explaining that it has been something of an uphill struggle to be taken seriously in the business world. "Now we have shown the results and growth," he says, "there is nobody that doesn't take us seriously anymore."            

Interestingly, Creativ Company's motives behind this work ethic are more than simply increased revenues. The brand only runs one walk-in store, in Denmark, and conducts the majority of its business online. Though it is undoubtedly important, positive staff interaction with customers is minimal given the limited amount of exposure the firm's customers have to its staff. Rather, this approach is born of the belief that improving the happiness of the employees will encourage them to work harder and better, thus improving the business itself.

Of course taking this liberal approach to staff management can leave a business open to exploitation. One problem the company has to deal with on a regular basis is an idea among staff that they can put in minimum effort. "Sometimes we attract people that think this is a nice to be and they don't really want to do anything, people who think they can get a job here and just sit and have fun," Lindhardsen highlights, admitting that the company must attack those expectations and help the staff to realise that it works both ways.

Ultimately, he explains, it is not that hard to create a positive working environment that is conducive to a successful business. "It's a matter of willingness to try new things," he tells me. "And then it creates a fantastic environment for your customers. We get enormous positive critique from our customers because they can feel that our employees are happy."

Company profile: Beaverbrooks

Relative veterans of the retail world, UK base jewellers Beaverbrooks, demonstrate that it is possible to implement the same workforce management tactics on a wider scale. Like Creativ Company, the 770 person strong jeweller, which operates almost exclusively in northern England, is another regular on the Great Places to Work in Europe lists. Also, like Creativ Company, the retailer's success has been attributed to its employee-centric business tactics.

"It's our ethics, it's our values, it's our culture," explains Mark Adelstone, MD of Beaverbrooks. "It's something we've worked very hard on. And I guess it comes from a passion for people, and caring for people, and treating people as adults, with respect."

Arguably, Beaverbrooks needs to use every tool at its disposal to keep revenues up. For a retailer of luxury jewellery, a market that has been hit particularly hard by the recession, maintaining high sales figures is no mean feat. Compared to Creativ Company, a retailer that sells inexpensive products and operates largely from the booming online platform, Beaverbrooks faces some big challenges. "We're very customer centric." Adelstone tells me. "Our external customer mantra is to make jewellery to make them special. Because jewellery is a special purchase; it's really important that the customer has a fantastic experience. There's no doubt whatsoever that there is an absolute link between employee engagement and satisfaction, and the customer experience and their satisfaction."

Adelstone quite clearly understands the value of an engaged workforce, but stimulating that mindset amongst employees is not something that can happen immediately. "In order to get to this point, we have to make sure that our people onboard are actually part of this journey," he says. Like Lindhardsen, Adelstone explains that he begins at the recruitment process, looking for that inherent sense of responsibility. "There are a number of people that we take on who are the best ones in the world with all the best interviewing, but not quite right for Beaverbrooks. And that becomes quite apparent.

We have a six-month transitional period. We'll advise you along the way And not everybody makes it through that transitional period. Sometimes they feel they're not right for us; sometimes we feel we're not right for them."

As he continues to unfold the practices of his business I can hear Adelstone exposing in Beaverbrooks that characteristic so commonly found in companies with a successful workforce management strategy: getting your foot in the door is the hardest part. As he talks about the company with the air of a firm but fair headmaster it is becoming apparent to me that recruitment at Beaverbrooks is markedly more stringent than one would expect in an industry with one of the highest rates of staff turnover. "We'll tell you if you're not making the grade, or if your attitude, your mind set or your philosophy isn't right for Beaverbrooks." 

Such bald honesty is a surprising quality, and one that in itself has helped to establish the jeweller as such a strong employer. "We're very transparent, very truthful, very to the point," he tells me proudly. Later, I ask him why he thinks that a strong focus on workforce management is important for retailers; the candid and sincere response betrays a refreshingly genuine desire to run a business that is moral, and not just financially lucrative. "I don't necessarily think that it is important," he tells me openly. "There are two ways to run a business. You can run a business through autocracy and fear, with hierarchy and structure, which a lot of companies do and they're very successful. It depends on what your outcome is.  If your outcome is to maximise profitability and return on investment and you don't give a shit about the people that work for you, then what I'm talking about is irrelevant. It can only happen if people have a mindset that want to." He outlines his feeling of responsibility for the 770 people under his command that rely on Beaverbrooks, aware that the quality of the lives of his employees, and of their families, depend upon his business.

People promotion

Adelstone's firm attitude is offset by the company's longstanding motive behind this workforce management practice. "What would not be good for us is to just make money and not feel good about what we do and the way we do it," he tells me. "And not feeling good about the way we interact with our customers, our suppliers, our people. And we actually, genuinely try to make lives of those people around us better by being involved with them."

He outlines some of the practices in place at the company used to develop such a positive working environment, highlighting a focus on development and self-development for his employees as key to promoting a positive attitude within his workforce. "A lot of people have a lot of negative self-beliefs," he says. "People will say, "I can't do that, I'm not good enough." We try and deconstruct those beliefs by really getting to the root cause. One of the things we do is promote from within. We are very, very keen on that; people develop through the business through our own management development program."

In addition to promoting positive emotions among the staff, Beaverbrooks has a long standing reputation as one of the most socially responsible companies in Britain.  Adelstone explains that the commitment to the community is all part of the company's philosophy, and is integral to the development of his staff. He tells me that the company puts aside 20 percent of its profits on an annual basis for charitable funds and community and welfare projects. "It helps them [the staff] grow as individuals, because one of things that we do - as well as giving money - is we give people money to give to a local charity of their choice. So, each of our 66 stores and each department's head office have this opportunity to give money to a charity and them involved with that charity."

Philanthropy is promoted heavily within Adelstone's organisation. In addition to dedicating such a significant proportion of profits to charitable causes, Beaverbrooks' staff are each granted two days of paid time off every year to spend working for an organisation of their choice, and can benefit from a match funding scheme, whereby Beaverbrooks will double any money raised for a registered by one of its employees. Its payroll giving scheme is used by 31 percent of its workforce, indicating that just under a third of all employees are donating to a charity through this method, which is the highest of any organisation in the country. "There's so many different things that we do to engage our people in that whole process," he summarises. "Since 2000 we've actually given over five million pounds to over 400 different charities. It's very much about being part of the community and encouraging the stores to become part of their community, as well."

These figures are impressive to say the least, made even more so when one remembers that the discretionary products market has taken a massive hit in recent years. However Adelstone explains the firm has not had to compromise its workforce in order to stay afloat. "We'll see how the land lies because we don't know what's around the corner economically," he tells me, pragmatically. "We could be in for a sustained, long period of austerity, which isn't going to be easy. We're being cautious. We're cutting costs - successfully. We haven't made any redundancies, which we're very proud to say.

"There's only ourselves to be answerable to.  We'd rather have a safe and sustainable business, with solid asset base and cash reserves, than plough on and be irresponsible."