Award Winner: People & Communication

SSON News and Analysis
Posted: 07/09/2012

Jamie Anderson, General Manager
Jamie.Anderson@diageo.com

Excellence in People & Communication Award 2011 - Europe

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Strategy

We believe that if employees are ‘super-engaged’ (really connected) with the business they will deliver higher performance that will grow the bottom line of the business while making Diageo Business Services a great place to work. This principle underpins our annual values survey and thus in order to increase employee engagement we place a significant emphasis on people development and communication at all levels. This is reinforced from a talent perspective ‘Releasing the potential of every employee’ lies at the core of our global people vision and all our programmes are built with this goal in mind.

There are some key metrics that we use to benchmark our success and progress. Working in SSC environment, national attrition rates can be beyond 25%. Our goal was to consistently stay less than 15% so we could focus on growing our talent rather than continually recruiting creating continuity that delivers better efficiency for our market customers. Our other driver is tracking how many of our employees are ‘super-engaged’ and our goal was to double this over 3 years and for DBS to beat the Global Finance standard. Our annual values survey also puts great weight on our leadership and people management capabilities and these are measured and reviewed by team, department and organisation.

Talent Management

We look at our development needs at a number of levels. We monitor external trends as well as internal needs. Our leadership team works closely with HR to translate the needs and expectations into training opportunities by department. Since all employees have a development plan as part of their performance review (Partners for Growth – P4G). Then once we finalise the annual training calendar, it becomes clear who participates.

In the case of leaders, leadership trainings including coaching and communications play a huge role. Employees typically participate in a number of functional (accounting, IFRS) or system (Excel, Access) trainings, but there are also a number of soft skills trainings open to all. Breakthrough Performance Coaching is our flagship programme for all managers this year.

Last year we held over 1500 hours worth of functional and soft skill trainings, 2800 hours of language training, which if you translate to an individual, means about 8 hours of formal training per year.

This however doesn’t include internal Diageo’s trainings that are available in classroom session and our online academy (both available free of charge). We create a programme that takes the best of Diageo’s functional and leadership programmes and supplement this with local capability requirements.

It is also important to stress that as a principle we place most emphasis on on-the-job trainings – about 80% of all trainings at Diageo are on-the-job. 80% of our employees participated in formal training last year, but this doesn’t include on-the-job training, which we provide for all.

We also have non-optional trainings that are for example compulsory for all line managers – such as our training on the Code of Business Conduct and all people managers must complete our People Manager Feedback Tool twice a year, and build the learnings into their P4G as part of ongoing coaching conversations with their line manager. Managers are evaluated on quality of leadership as well as the delivery of results and that creates a different and more positive culture.

In terms of other people processes, it all starts with Partners for Growth (P4G), our performance management process. The underlying principle behind P4G is that a line manager should know, focus and value his/her direct reports and should support them in their career aspirations. P4G helps to define short and long term aspirations both at and outside work, which is important to have clarity around in order to be able to shape one’s role in a way that it remains motivating. Anything is acceptable here: goals of becoming general manager one day or a mother who only works part time, or being able to work flexibly in order to be able to fulfil your ambitions outside work. It is a valuable part of the system that we also map how Diageo can help the individual get closer to his/her objectives. We then define the specific objectives and deliverables for the year and create a development plan together. From a business perspective, objectives are directly linked to our mission ‘to be the solutions division of Diageo’ and must be classified under our 5 pillars – one of which is great leadership and people development. This ensures consistency and focus and creates the opportunity to focus development on the correct functional and leadership requirements to deliver in role while also developing the employee’s career in line with the personal aspirations.

We openly talk about the ‘spirit of P4G’ and that every coaching conversation should be a great conversation and managed well can be the differentiator in performance – hence our continued focus on leadership and people management as well as being a functional centre of excellence.

Talent management processes are other strengths of Diageo. Following our business strategy planning sessions, we create a People and Talent Review (PTR) - and this focuses on Talent Reviews, Organisational Design and Reward. This is managed through sessions with each management team and the insights generated through these discussions drive our focus for the following year.

We have moved from Succession Planning to Talent Pools for all senior roles (70/700) however the principles of discussing and calibrating our talent remains the same – both in terms of commitment and outcome. As a DBS Executive, we spend 30% of our monthly agenda, every month getting to know our people – and having an aligned view on successors, their readiness and what development they need to get there. For director roles all potential successors met the general manager, HR director and another director to understand their aspirations and what we do to support them. This principle of calibration and truly ‘knowing our talent’ are then cascaded through the organisation. We can also leverage Diageo’s Europe wide level talent programme and ensure our top talent have the best opportunities.

Compensation philosophy consists of recognising individual performance and business success, rewarding team accomplishments and providing competitive pay packages. We operate a pay for performance culture, where pay progression is linked to an assessment of company and individual performance, measured against pre-agreed objectives. We believe in celebrating our successes, and this type of informal recognition brings an interesting colour into our everyday. We think basic gestures are important: a thank you, a well done – practicing these is a basic expectation towards all our leaders. We have a great atmosphere within our teams this is one of our key strengths. We also have a formal recognition programme, Free Spirits, with nominations in both individual and team categories. The awards are handed out on a monthly basis and we celebrate our awardees twice a year.

Communication

It is a basic principle at Diageo to have HR represented at the highest forums; therefore the relationship between HR and the Executive team is great within Diageo Business Services. Further to the HR director being a member of the Executive team, the HR business partners are members of the management teams they support. This ensures that people development is on the agenda at every management meeting every month.

It is also important to mention that the wider leadership team of 70 leaders meet quarterly, when the Executive team not only informs them of the latest developments, but also actively involves them in the company’s strategic initiatives and the shaping of our future. These meetings of course wouldn’t lead to results without focused and hard work in-between meetings – these projects and work streams provide a great opportunity for our leaders to contribute to the company’s success. This all gives the Executive team the opportunity to get a feel for the dynamics of the company and get insights into the reality of the teams.
At these meetings we reinforce key messages and focus areas for leadership for people development, as well as run sessions on capability development so we can learn together.

All these channels are now embedded as ways of working and we also utilise our monthly e-newsletter – BudaPost which is read by 86% of employees to highlight key events or milestones such as the ‘Career & Development Day’ we are running in April 2011. This initiative is being led by the departments who are eager to showcase opportunities in their areas.

Web communications and especially the ‘Diageo Academy’ and ‘Clearly Finance’ are key communication platforms. The Diageo Academy is a ‘one stop shop’ for all development needs and beyond managing classroom training contains all reference material to develop personal capabilities. We actively encourage self learning and practice as step one of capability development and there are a number of feedback tools (people management, Diageo capabilities) that we point our employees towards so they can gain self insight and so focus on the right areas as they write up their development plans in P4G.

Clearly Finance is the global finance website that has both a DBS tab, where we can share who we are and what we do with the rest of Diageo, and a ‘Keep Learning’ tab. Keep Learning is our Global Finance Learning programme which primarily focuses on functional capability and runs course such as ‘Finance Excellence’ and ‘Success through Controls’. It also has a ‘jargon buster’ to recognise ‘Diageo speak’ and make all development more accessible for employees.

E-learning has also been a newer concept that we have seeked opportunities to embed. Diageo Academy and Clearly Finance websites have both won a number of global E-learning awards. Many of our mandatory training sessions such as induction, or key policies including anti-money laundering and code of business conduct are now managed in this way.

One of our insights this year has been on managing ‘over communication’ where at times employees feeling overwhelmed by both the depth and frequency of development communication. As a result the local Keep Learning and HR teams have created ‘One Plan’ which has reduced the number of events but focused their content more.

The role of our customers in creating our people story needs to be recognised. At an individual level, as part of the P4G process, each manager seeks feedback on their direct reports from stakeholders and this has an impact on their performance rating and also provides clarity on their development needs.
Our stakeholder sessions at a market level also reinforce development requirements across DBS. Continuity in role was a major issue and we have actively sought to have employees stay in role for a minimum of 2 years and our messaging around career development and the requirement for breath and depth of experience supports this. With an average age of 29, this can be a challenging message to give to a largely ‘Generation Y’ population and showing the value of experience and ensuring growth while in the role is vital for retention.

We have also created ‘one communication plan’ where we are actively supported by the Corporate Relations department and the links and ways of working are consistently emphasised as part of the total development offering.

Finally we also run company-wide programmes with the involvement of our people: we have an environmental team, a CSR team, a brand focused team – these all operate with leadership support, but on a voluntary and cross-functional basis. Our bi-annual community days are popular, as well as our brand events, and in terms of our environmental team, they have done so well in 2010 that we won Hungary’s Greenest Office award – all of which develop capability, relationships and pride in the organisation.

The communications journey has evolved significantly over the 10 years of DBS being in existence.
The key changes can be defined as greater leverage of the Diageo network so DBS gets the best of global and local opportunities, a clear communications framework so we manage messages consistently and effectively and clarity on how we measure the success – leveraging the customer and values survey to drive the right insights.

Benefits Achieved/Hard Improvements

There have been clear improvements versus our original goals. Attrition remains below 15% and the percentage of our ‘super-engaged’ employees has doubled in 3 years. We believe the links are clear with business performance.

In terms of the business impact, we measure cost, control and efficiency with our markets. These three measures are linked to performance through being the criteria for the annual bonus payout. If we do not hit our targets in these three areas, there is no bonus, regardless of individual performance. Our customer satisfaction survey measures how satisfied our markets are with our performance – and we aim to have over 20% of the markets respond as ‘very satisfied’. Last year this was 23% which was our highest score ever. We also delivered on cost and control requirements.

From a talent perspective we have a stand that ‘DBS Leaders will be Diageo Leaders’ and they so will not just be respected for their functional capabilities but also their leadership contribution across the globe. We set the challenge of moving 10 people annually to other markets and having our first Director move overseas by March 2011. We have achieved both these aims and these successes increase both the reputation of DBS and local Hungarian talent. Given one third of our global finance community sits in Budapest, this was the next stage of our career development offering ensuring you can have a great career both ‘home and away’ in Diageo –and also encourages Diageo talent to come to DBS to develop their capabilities as part of their career paths too

One unplanned benefit has been the success of our employee referral programme which is the most successful in Diageo across Europe. By being seen as a great place to work our employees actively recommend DBS to their friends and our number of ‘Diageo returnees’ who rejoin us from other organisations is again the highest in Diageo Europe.

In summary, through our Employee Values Survey and Customer Satisfaction Survey, we can actively track our step change in people performance and through linking these measures to the bonus payout, reward all employees for the collective success.

Differentiators

The differentiation starts with Diageo’s and therefore Diageo Business Services’ culture. This is determined by Diageo’s five values. We strive to be the best and are committed to continuous learning and development in order to get there. We are passionate about our consumers and customers and work hard to be the best possible partner to them. We are proud of what we do, who we are, our brands, their heritage and potential, we are proud of our company, our culture, our performance, and our success. In all cases, in all aspects of our work, we act with the highest level of integrity. We have a lot of freedom to succeed; the opportunity is there for everyone to release their potential. It is however probably the most important that we do all the above with a consideration to others – we value each other, the different perspectives others bring, we believe in diversity and in respectful collaboration.

Our focus on people is reflected through the quality, but more importantly, the commitment to our talent and communication processes and programmes so they drive the right outcomes for both the business and our people. The ‘spirit of P4G’ encapsulates our desire to grow and support our employees both inside and outside work. ‘Ask what Diageo can do for you’ is a challenge and an opportunity we ask our people to consider.

Finally the link to business performance and how we match our people and communications strategy to business needs at all levels is vital.

The Diageo Purpose is to ‘celebrate life every day, everywhere’ and we look to do this through our people as often as we can while also recognising that we improve and create new possibilities for tomorrow.

SSON News and Analysis
Posted: 07/09/2012

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