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How the internal communication function helped shape change at Shop Direct Group

Despite the current business climate, Shop Direct Group has successfully navigated multiple changes by improving levels of employee engagement. David Boardman explores how communication has been an integral component in the processes of preparing, executing and delivering major change, a topic that he'll be discussing further at the UK SCM Summit 2009.

by David Boardman, former Group Corporate Communication Director, Shop Direct Group

 

Shop Direct Group is the UK's leading online and home shopping retailer. It operates a variety of well-known brands including: Littlewoods, Kays, Great Universal and the newly launched Woolworths online. In addition, it recently launched the first site to mix social networking with the very best in retail therapy - Very.co.uk

These brands contribute to its growing £1.7bn turnover. To give an idea of its size and scale, the business sells 1 pair of jeans every 12 seconds, 1 dress every 15 seconds and is one of the largest retailers of mobile phones in the UK.

To achieve these volumes, the business delivers 51 million items to over 5 million trading customers. It also answers 31 million calls every year. One in three households in the UK has a Shop Direct branded catalogue on its coffee table.

Geographically, it has a far-reaching presence in the UK and further afield:

• A head office in Speke, Merseyside
• 7 UK contact centers
• 7 warehouses
• 23 Littlewoods clearance stores in England, Scotland and Wales
• Sourcing offices in China, India and Thailand
• Littlewoods Ireland, based in Dublin

Shop Direct Group has a rich and varied history. It's the product of the merger of two previously competing rival businesses – Littlewoods Home Shopping and GUS Home Shopping. A pivotal time in the recent history of both companies arose from the merger and consequent consolidation into one organization, based at the head office in Speke.

The challenge
At the time of this merger, circa 2005, the newly-formed company faced many challenges: integrating two head office populations and associated departments into one, consolidating elements of its back office functions (depots, contacts centers and warehouses) and undertaking the largest IT transformation in Europe. Concurrently, there was a renewed drive to focus on service by putting the customer at the heart of commercial decision making.

Online shopping was increasing exponentially and the business needed to ensure full advantage could truly be taken of its unique end-to-end infrastructure in order to be perfectly positioned to lead the way in online retailing.

From a communication perspective, one of the greatest challenges lay in the management of a communication agenda during a period when change was indeed the only constant. Apart from the structural changes to the organization, ways of working changed, as did the approach to the customer communication and service provision.

Communication priorities during times of change
At the outset of these changes within the organization, the communication priorities were as follows:

• To promote the ultimate direction of the business and the route map for the journey (vision and values).
• To identify and locate the internal stakeholders.
• To understand how the internal stakeholders could best receive information and feedback.
• To create and operate a variety of communication mechanisms which best suit the audience.
• To continue to inform and engage employees at points along the journey.

The vision and values
At its simplest, the vision of any organization is a statement of intent - this is where we want to go/what we want to be/who we want to beat. The values are the way in which the vision is achieved - the way we do things.

If employees are given an explanation of the vision then, at the very least, this provides a route map, an idea of the direction in which the business is heading; the employees now have some understanding and a sense of purpose.

However, taking this a stage further, by involving employees in the process of creating  the vision and values, the route chosen by the company, enables them not only to shape the future direction of the business but also to feel far more engaged in the journey. With engagement comes ownership and a heightened sense of belonging.

At Shop Direct, the entire leadership team (circa 160 managers) was involved in crafting and shaping the vision and values, which became known as the "Leadership Message". This was a clear signal to the entire company that a unified approach had been agreed.

A communication campaign was then initiated to ensure that the future direction of the business and the necessary behaviors were conveyed to all.

Campaign strategies included holding a management conference led by the Group chief executive, producing team briefing materials and guidelines (the "How to" of briefing) and establishing a timeframe for the successful cascade.

What can't be underestimated is the importance of line managers in the managing, supporting and delivery of key messages to their teams. A business that's multi-sited, with geographically distanced locations, requires a reliable, co-ordinated broadcast of information that's delivered consistently.

Improving line manager communication
In the absence of information, how can employees make sense of what's happening to them when their organization is undergoing change? Employees can feel removed from the drivers of change and feel that it's being imposed; they're passive rather than active participants in change. This may be due in part to a lack of coherent messages explaining the purpose and nature of the change.

Often, the first blocker to good communication is a line manager who either can't communicate to his team or chooses not to do so.

This could be due to a lack of personal capability (not having the requisite skills to communicate in an effective and engaging manner) or may be due to an inability to grasp the full implications of the wider role of a line manager (simply not seeing communication as an important facet of being a line manager).

The corporate communication team worked closely with the learning and development team to ensure line managers received sufficient training in team briefing, presentation skills and conducting one-to-ones to ensure that the foundations of good, effective communication were established.

This was combined with a strong performance management system that rewarded managers for effective management (including communication), further reinforcing the desired behavior.

Involving stakeholders
Delivering a change program on the scale necessitated by the Littlewoods/GUS Home Shopping merger could only be achieved through a unified approach, focusing on the areas of long-term sustainability while also achieving quick wins where possible.

Running parallel with internal changes, a media campaign "If you think you know Littlewoods, think again" was created to inform and engage key external stakeholders in the change program.

Hence, when the media reported on the changes happening within the business, these reports, when placed alongside the on-going media campaign, placed the changes in context and gave an holistic view of the business strategy. As our internal stakeholders are also external consumers of the media, it was vitally important to align internal and external messages.

Therefore, all communications were checked to ensure that they mirrored key facts and conveyed a consistent message that never deviated from the corporate vision.

The program identified the following external stakeholders:

• MPs
• Trade journalists
• Consumer journalists
• Opinion formers
• NGOs
• Suppliers
• Government agencies
• Local councillors

A stakeholder survey conducted pre and post implementation of the media campaign saw both a positive increase in the awareness and perception of the business and also an improved understanding of the changes taking place, together with a more optimistic view of the company’s future prosperity.

Communication mechanisms
In terms of receiving information and giving feedback, what works for a customer advisor in a contact center won't necessarily work for a shift worker in a warehouse.

Consequently, the following suite of communication strategies were created and proved essential in providing tailored solutions for a variety of audiences:

• Newsletters, which talk to the reader at an appropriate level, without being patronizing or condescending. The employee newsletter Talking Shop is accessible to all; it's both online and also in printed format for employees without pc access.

• Notice boards placed in high-traffic areas to ensure greater visibility and access to information. Regular updating is paramount to stop the contents becoming wallpaper.

• An intranet which is easy-to-navigate, up-to-the minute and the destination of choice when more detailed information is required by those who have pc access.

• Team briefings which are regular, short, informative, two-way and above all, engaging.

Using the network
With a large workforce (circa 12,000 employees) spread across more than 40 locations and 2 continents, it was imperative to create a strong communication infrastructure, capable of delivering consistent two- way communication.

Having communication champions in key sites across the group was vital, to support and enable business leaders to embed successfully the "Leadership Message" and to explain effectively the changes taking place within the business, through timely, targeted communication activity.

Communicating progress toward attaining the vision was also important to provide both a sense of achievement and also a sense of urgency, focus and drive.

A common problem with visions and values is that they may not be properly embedded in a business and, therefore, don't become part of a company’s ways of working. To prevent this happening at Shop Direct Group, the "Leadership Message" was brought to life through regular communication of best practice, the creation of a high profile Customer 1st initiative and a twice-yearly awards program, which rewarded those who demonstrably lived the values.

Employee opinion survey
To capture the perception of the business, including the effectiveness of communication, the company undertook a company-wide opinion survey called Your Shout; employees gave their views on a variety of areas that measured their level of engagement.

In a variety of companies, where I've previously implemented employee surveys, it proved useful to identify the different groups within the business, and their relative views. By measuring levels of loyalty and satisfaction, a useful quadrant emerges.

Firstly, those who are both loyal and satisfied to continue working with the company can be classed as advocates. These employees are your apostles. They will be evangelical about working for the company and will strive to deliver the goals.

Secondly, those who aren't satisfied but are loyal, since they won't look outside for alternative employment, can be classed as hostages. While they won't leave the business, they won't be the most productive or supportive of change.

Thirdly, those who are very satisfied with the material rewards of their role, but aren't truly loyal, are the mercenaries. If a competitor offers a higher salary or better terms, they'll leave; they'll do a great job while they're with you, but you don't hold their hearts and minds.

Finally, those who are neither loyal nor satisfied will positively drag the business down, and their colleagues with it. These are the saboteurs and can only harm your business.

Change is the only constant
Most organizations today accept the fact that change is the only constant. It's the one thing that can be guaranteed to be ever-present. Whether through evolution or revolution, organizations have to respond to various factors such as changing markets, changing consumer behavior and changing technology.

Adopting a mindset that not only acknowledges but also embraces change, supports progress and develops resilience when faced with uncertainty, helps to underpin the operational transformation required.

Celebrate good times with reward programs
In order to reinforce the company's vision and values, it's imperative that any reward and recognition initiatives work in tandem with the established values, thus rewarding behaviors that positively demonstrate living those values.

Twice a year, the company recognizes those who've demonstrably lived the values. This not only reinforces the values but also ensures that they become part of the very fabric of the organization.

Building on this, the company created a new role within the business, tasked with driving change and employee engagement. This has resulted in a number of new ways of working that empower teams, celebrate success and endeavor to create a "great place to work".

Furthermore, the establishment of People Forums ensures that employees have a conduit for conveying the free-flow of feedback, contributions and active participation in the process of ongoing changes throughout the business.

 

The results
The company is a good example of a business that has undergone a true metamorphosis.

The change program that commenced in earnest in 2005 has delivered demonstrable results:

• In 2007, the company reversed the sales decline for the first time in 10 years.

• In 2008, no doubt assisted by the radical improvements in its brand websites, trading online passed the 50% mark for the first time. 

• In financial year 2007/08, the business more than doubled its EBITDA target - EBITDA up 130% to £60.9 million, compared to £26.5 million in 2006/7.

• In 2009, the company continues to change with the launch of the Woolworths brand online, from acquisition to trading in just 20 weeks.

• Very.co.uk has launched this July as the first website to offer shopping and social networking in one place, supported by designs from various celebrities.

• Summer saw the launch of Littlewoodseurope.com taking the brand into four new territories – France, Germany, Italy and Spain.

All of these achievements, that further demonstrate the ever-evolving shape of the business, couldn't have been achieved without the support, dedication and determination of the employees.

Despite the often unsettling nature of change and the uncertainty of the global economy, it's clear that employees have consistently delivered. This is evidenced by the employee survey that recorded the following improvements since the previous survey in 2007 across a variety of areas including communication and employee engagement.

Plans for the future
At the time of going to press, the company is at the start of the Golden Triangle, the lead up to the crucial Christmas trading season. Mid-season updates to the catalogues combine with weekly updates to the websites to entice the customer to trade the offer.

The requirement to adapt, become fleeter of foot, be first to market with innovations never changes. The old adage remains: change is the only constant. Based on the results so far, Shop Direct Group is not only adept at change but is also a leading example of how to manage that change successfully.

Have your say
How is the current recession affecting the way you and your team deal with change? What are the big change projects that you're currently working on? Are you employing any innovative methods to deal with this change considering that many budgets have been cut?

Other recommendations:
How to plan your communication strategy when faced with a merger or acquisition
The six phases of major change
TOOL: The Change Curve