News

It is a grey, wet, blustery January afternoon when Matthew Brearley, HR director, Vodafone UK, finally emerges remarkably fresh-faced from an all-day meeting at the Park Inn Hotel at London's Heathrow. A dozen other Vodafone European HR heads dutifully file out after him, off to catch their flights home. It is the end of the monthly ritual for these directors: a get-together to share best practice and new ideas and update others on new plans or current HR programmes. But as he stretches out and settles down for this interview, one rather suspects it is Brearley who has done most of the talking.

"Vodafone UK is very much regarded as the leading country (within the group) when it comes to HR," he says proudly. "Launched in 1985 it is the most mature business, and, in the past two years, I've introduced an HR Service Centre based on Dave Ulrich's HR model of the employee-customer profit chain, core competence theory and balanced scorecards. It's these aspects that are still just coming aboard throughout the rest of Europe."

But the former HR director of Marks & Spencer, who describes this last project as "phase two" of his (so far) four-year tenure at the telecoms giant, is already thinking about phase three. "When I first arrived at Vodafone, the HR function was disjointed, service-focused, but doing too much generalist stuff. This has now been resolved," he says. "I'm far more focused on my next concern - our employee experience strategy, something I believe will differentiate us over the next five years."

This is not just a reference to the kind of customer service skills that were honed while he was at the then troubled M&S. Vodafone Group, which most still remember for its spectacular £14.9 billion loss in 2006, a loss that caused 400 jobs to be cut at its Newbury HQ, has been undergoing a transformation. Later in 2006 Vodafone UK severed its mobile phone distribution arrangement with outlet The Carphone Warehouse and became a retail business in its own right for the first time. Today 2,000 of its 10,000 staff work in Vodafone shops selling handsets and contracts, the results of which have helped Vodafone announce 2007 fourth quarter results that were up 15.8%.

Add to this its call centres with a further 3,500 employees, and Vodafone has transformed itself into a predominantly customer-focused business. Also add on top what Brearley calls "the competitive new markets forming" - online, multi-media and even content to rival TV channels - and it is clear Brearley sees his role as creating better engaged employees as the linchpin upon which customer service, innovation and business growth rests.

"The business I am about creating is one where engagement is not deemed a chore," he says. It seems a typically rehearsed press statement at first, although Brearley is quick to qualify this. "These are easy words, I know, but for my role it is very much about creating a place where people want to be, so that we can release the talent within."

The foundation for this is what Brearley calls his 'Winning in the Market' strategy. Although Brearley is already one of the few HR directors who actually have a place at the boardroom table (he refers to his relationship with UK CEO Nick Reed as something that is "unique and special"), the codename adds weight to his aim of putting HR at the core of the business. "Our company is geared for growth, so I want to be sure HR works with the finance department to drive this policy to the board," he says.

Projects already under way include the futuristic-sounding TARDIS scheme, a multi-million pound investment to redesign the office environment, as well as making more of a concerted effort to allow non-store staff to work from home. "I believe a better physical office environment can help staff be more creative," he explains. "We have a saying at Vodafone that we are 'red, rock solid and restless', and better working is my interpretation of this."

Brearley leads by example, working one day a week from home, and he has already helped kit out 600 employees' homes with PCs, broadband and other home-office requisites. In fact Brearley even defines Vodafone people in terms of whether they are either 'fixed, flex or free', where all but the first (the fixed store workers) are theoretically able to work where they like.

Perhaps this 'making work fun, but sensibly' approach represents a more 'grown-up' Vodafone. Back in the late-1990s/early-2000s things were far more swinging, especially when it came to rewarding staff with grand celebrations. Vodafone staff parties were the talk of the town, where no expense was spared. Its 2001 grande bouffe for 11,483 staff at Earl's Court set a record for the largest silver-service dinner in history. It was followed a year later with a 10,000-head shindig at Newbury race course, ably kicked off with live performances by Westlife, Will Young and Jools Holland. It was so raucous that Thames Valley police were apparently called in by angry local residents to investigate the noise.

"We don't really do those big occasions any more," laughs Brearley. "I think those conspicuous, big events are now a thing of the past. I was at M&S when things really hit a trough, and at Vodafone we need to learn how to manage change. If there is one thing the retail environment has given me it's that you need a strong line of sight about what affects performance."

Testament to this is his continued support of 'Vodafone Legends'. This is a rewards and recognition system Brearley introduced three years ago. Instead of being a top-down policy, the programme is based on staff nominating their fellow workers - very grown-up indeed - and the parties are restricted to a select few. This year's Legends - 100 of the best staff - were announced last month. The best 300, whittled down from a list of 1,600 nominations, faced a national assessment panel, which Brearley chaired and which featured the rest of the board. The 300 were treated to a party at Madame Tussauds, while the winning 100 last month celebrated their 'legendary' status with an all-expenses-paid trip to Hong Kong.

But Brearley is not cutting out all the fun for the rest of the company. Indeed, lucky employees were recently able to see F1 racing star Lewis Hamilton at a special staff event (Vodafone sponsors him). "As well as being performance-focused, I understand that we also need staff to be advocates of the brand," he adds. "This means they need to feel part of the company; they need to feel they are involved in what we are. Events like these all help to make employees feel they fit in with the company."

One of the biggest lessons Brearley says he has learned when it comes to integration was when Vodafone bought Singlepoint - a call-centre business dealing with 1.5 million Vodafone customers - from billionaire hard-ball entrepreneur John Caudwell. As the boss of Phones4u, the fiery Caudwell implemented a strong targets-driven culture.

"This high-performance nature came as a bit of a shock when we came to integrate it into the Vodafone family," Brearley admits, when he was tasked with bringing these people into the Vodafone fold throughout 2005. " 'Employee experience' would not have been part of the language there," he adds. "Some love the hire and fire mentality, but we don't want to be like that. This is not our philosophy. We're focusing more on opportunity. If you asked staff today, they would say it's very different from when Caudwell was in charge."

The indications are that Brearley's method is paying dividends. "We're only 14% disengaged," he says triumphantly. Is this something to shout about? "Absolutely," he adds. "Most organisations have closer to 30% disengagement. In 2006 ours was 26%-28%. Now that we've reduced it, I'm looking at the difference between the engaged and the truly engaged. According to our Hay Group measure - which we do four times a year - we're 40%-50% truly engaged, which is remarkable really."

Surprisingly, though, Brearley doesn't believe it is 'his' HR that should take the credit. "I believe we achieve what we achieve through excellent leadership; our people are local, working with a team of great leaders," he says. Moreover, he would not want it any other way. "In all my roles, my view has always been the same: if you have a layer of good management to start with, you just don't need a lot of over-complicated HR. My dream is not to rule over some kind of empire. All I want is for HR to be truly value-adding - that is, part of the business through the actual contribution it makes."

He surprises once more: "I don't consider myself to be an HR person first and foremost at all," he says candidly. "I consider my number one job to be a member of the management board, running this business. Number two is being an HR director. I spend 60% on the former, and 40% on the latter."

It's a refreshing statement for such a clearly important member of the Vodafone executive team to make. "It's only with the integration of HR that we believe we can do some exciting things," he says. "We used to be into phones. Now we're into 'mobile technology', and that means we need to stay ahead of the curve, and even work with partners that could soon become our rivals - like Google. There's a very real challenge that we will be facing in the next few years, but I believe that with engaged, committed employees who want to get up in the morning and come to work for us, we'll be able to lead the change."

CV
1965 - Born Derbyshire; educated at University of Bath - engineering
degree
1987 - Started as project manager with Exxon Mobil, progressing to
supply co-ordination manager, before moving to Associated Foods
1995 - Joined B&Q as an HR consultant, finishing as director of retail
HR
2002 - Director of HR, Marks & Spencer
2004 - Moved to Vodafone as HR business partner
2006 - Promoted to UK HR director

OUTSIDE INTERESTS
Running and sailing.