by Shaun Smith
Recruitment is really important. We have run an exercise a number of times, where we said to people, ‘If you were to leave tomorrow, what are the qualities we should be looking for in replacing you?’ And we ran this exercise, I don’t know how many times, and we’ve got one flip chart with hard skills, and one flip chart with soft skills. And of course it ends up almost 80 per cent soft skills. So we are now recruiting pretty much on soft skills.
I’m looking for very open-minded, collaborative people who have the ability to challenge, and want to help us make the future. Sometimes you get very challenging individuals and then often the feedback is that they might offend too many people, but I’m not too worried by that. Let them offend a little bit, they are good for the process. The recruitment company tells us, ‘You are too hard, you are too picky.’ We think it makes all the difference. There is a huge difference between a person who is average on those points and a person who is really good.
Tonia Millson, HR director
Our purpose is not profit
Our purpose is not about being profitable; it is something that is much deeper into the psyche of the organization. It facilitates and informs decision making. If we’re sitting in a product development meeting, if we decide to prioritize, then we will ask ourselves the question: does that fit with our purpose? Is that taking responsibility for safety, hygiene and sustainability?
It permeates throughout the organization, because it empowers individuals, it helps them make decisions, because they have a reference point. It also helps us when we’re talking to customers. We’re able to say how we differentiate ourselves because we have this purpose. And also with our suppliers, as it also helps us to understand whether they are also aligned. So we have been communicating that to all the stakeholders.
We want to integrate our customers into the company. We bring them into our sales conferences. We bring them into our training workshops that we run with our staff. We bring them into interviews, when we interview staff. We listen to them and then we give them the examples of where we have made key business decisions, based on their feedback.
The feedback we’ve had has been tremendous, absolutely tremendous. It’s getting us closer and closer to the customers. Similarly, with the suppliers, we have been bringing them into our internal meetings; they have been coming to a number of our training workshops that we run. We’ve presented our purpose and core values to 150 suppliers. They’ve been telling us, ‘We’ve never had that from any other customers, we understand more about what you’re about.’ So, when we’re sitting down with them to have our annual meetings or our quarterly meetings, we’re able to understand each other better.
We’ve now identified 10 key drivers that we believe, as an organization, we will need to focus on in order for us to achieve our vision. We’ve shared those with the senior- and middle-management teams so they are involved right from the beginning, because obviously it is going to be a long journey and we want to make sure we keep the momentum going. Each director will then work with their own functional team to come up with their supporting functional objectives, which in turn will become individual objectives. Everyone in the business is involved and engaged in the process. It informs performance management and the competency framework that we have in the business. This is how it is brought to life, through ensuring that it is lived every day, through the operational plans across every department. Otherwise, they are just words, aren’t they?
It means that we are thinking about the kinds of individuals that we need to bring into the business, or how to train our own staff, to bring up the skill-set level that we need. As a result of the core values work that we did, for example, we have a tailor-made personality test that we use for all candidates who come for interview, in order to ensure that they are aligned to our culture and core values.
It is a huge amount of work. But it’s worth it because we are getting feedback from our staff on a regular basis. They also feel proud that we are not just about profit, that there is a much bigger purpose.
It never stops
I don’t think it ever stops – because things move on, don’t they? I’ve been in the business 15 years and I have been involved in about four cultural change programmes in that time. It’s not about revolutionary changes; 15 years ago, our purpose was actually much the same, but we didn’t pay as much attention to it as we should have done. We didn’t get it as embedded in the organization as we should have done.
So, every opportunity we have, we put it all together, so that people can remember our core values, our purpose.
Image 9.6 Altro Design Centre, London
Terry Oakley, ‘Voice of the Customer’ programme
The ‘Voice of the Customer’ programme started in March 2008 as a project about acquiring and retaining customers. We decided to launch ‘Voice of the Customer’ because it was felt that we could do a much better job if we obtained customers’ feedback.
We started in the strongest possible way by bringing in one of our flooring contractors who was a clear advocate of our main competitor. He then proceeded in a four-hour interview to absolutely tell me how it was with Altro, and how he perceived Altro, and how we were not in the same ballpark as the competitor.
The feedback I was taking was quite severe. The main themes were: ‘You’re arrogant, you’re aloof, you don’t listen and you’re corporate, and what that means is that you treat all customers the same and you don’t treat them as individuals.’ So that was quite a lot of difficult feedback that we took in the early stages.
If I take the first, say, 12 customers that we invited into the plant here, it was a very similar story. Richard Kahn, our chief executive, called me and he said, ‘Look, Terry, I want you to invite one of the directors to be with you at all times when we’ve got customers in. I want them to hear this first-hand.’ He thought it was very important for them to hear it, so that’s what we did. So it then changed from not just myself talking, having a business discussion with a customer. Instead I had a fellow director with me.
The initial feedback was difficult, but with each year that feedback has changed, it’s become more of a partnership with our customers. If you look at the feedback that we’ve had over the last couple of years it’s been more along the lines of ‘We love that product that you’ve developed, could you do this with it?’ So it’s been more of a partnership about how we can improve, how we can deliver exactly what they are looking for. It’s been a difficult journey in some respects, but it’s been very valuable.
There are two reasons the programme has succeeded. One is that my sponsor on the board of directors is Richard Kahn, who is saying that this is critical for the future of the company – that I think is a must. I have a regular one-to-one with Richard every month. We talk about the feedback, we look at what trends are showing, and we look at what we need to decide to work on to improve.
The second reason it has been a success is I decided that people in the business heard exactly what the customer had to say. It wasn’t a salesperson moaning about the figures not being good and saying, ‘You need to fix this, you need to do that, and you need to change that.’ And it wasn’t me because I made sure that I remained unbiased. I had no allegiance to any department in the company, so I was delivering exactly what the customer was saying to me and then I was sharing that throughout the organization globally. I think that is a key part because it is not what Terry Oakley is saying, it’s not what the sales manager is saying, it’s not what the finance director is saying: this is what our customers are saying and this is what they think. Whether we like it or not, this is the perception they have. I did that by actually feeding back into the business in report format – after every customer visit – exactly what the customer said. Even to the point where we had a customer that was criticizing Richard’s behaviour in a particular project and I went to him before I issued the report. I said, ‘Richard, this is what the customer said.
What would you like me to do?’ He said, ‘I want you to publish it. I know what he’s had to say, he’s right, it’s what the customer said and that is the key point for me. I want you to publish it as it is.’
The information passes throughout the company, and where people have shared with us their frustrations or what we call ‘pain points’ of dealing with Altro, we’ve got clear examples of where we’ve fixed it and we’ve communicated back that we’ve fixed it to the customer, so we’ve closed the loop.
I ask Richard if he’ll write back to that customer that gave us the initial feedback to let him know that actually we’ve taken the feedback on board and we’ve fixed it and this is what we’ve done.
The other thing we do is take net promoter scores from customers and we find that to be a good measure of how customers perceive Altro. We’re getting some world-class scores now.
I also take a snapshot measurement of sales, so I look at the sales performance for the customer six months before they come in to see us and then I go back six months after they visit us, take again a snapshot of their sales, and then I compare the two and you can tell from the figures that they clearly gained confidence from the visit. I know that the relationship is certainly different as a result. The sales representative has been very clear that when they go back in to see that customer after they visited, the relationship is different. It’s closer. They’re prepared to share with us their information on the projects they’re working on. They share competitive information with us that is very useful for us to hear.
We ask for customers’ feedback on everything we do. Why give customers something they don’t want or value? It’s pointless. If you go back and think about that arrogance, that aloofness, I can remember in January 2005 we launched 10 products in one go that was unheard of for Altro – it was a real challenge for the whole organization. But within two years of launching those 10 products we had to withdraw five of them because they just were not required by the industry.
And that is because we had an inward focus where we assumed we knew what the market wanted, that we knew what our customers wanted, and we went ahead and developed those products at high cost and then in a very short period of time we had to withdraw them. That no longer happens, and I can honestly say now that since those horrible days, since we have started to incorporate customers into the whole process, we’ve had none of those issues. In fact, we have gone the other way. We developed our Aquarius product based on a lot of feedback from customers. That product is now the fastest-selling product ever in the Altro range.
As time has gone by people have seen the power of the programme. They know that the feedback is accurate. They know that it’s not filtered. Our sales managers contact me to get condensed customer feedback about a particular subject that they will then build into their business case that they will put before the board. It becomes part of business planning, and when you’ve got customer feedback in your business plan for which you’re hoping you can get some release of resource, it becomes very powerful.
I do a ‘Voice of the Customer’ induction presentation to every new employee, including our manufacturing staff. Whenever we have customers in, everyone sees them. I think that is important because there is analysis that says 65 per cent of the employees in every company never see or speak to a customer. Here that is not the case, because even when they are walking through the plant, they get the opportunity to ask to say hello to the customer and to acknowledge that the customer is there.
All of this feedback goes globally. It is not unique to just this country because we’re a company of 650 employees with subsidiary offices in Canada, America, Germany, Sweden, Spain and Australia.
I always acknowledge the customer after the visit and they always give me the same feedback, ‘I can tell by walking, meeting your people, looking around the plant that they take a pride in what they do and they all seem to have a smile on their face.’ You cannot beat that. You cannot bottle that. You cannot force people to do that, but that’s what people do here.
It’s our people that are our strength in this company.
Image 9.7 Altro flooring in Nestlé HQ, Spain
John Patsavellas, technical director
We’ve been manufacturing in the UK for a very long time. We export half of what we make in this factory in Letchworth across 30 countries. There are not many British manufacturers who export 50 per cent of what they make to all corners of the earth. Manufacturing is in our DNA. The success of the business is based on innovation. The Altro Safety Floor was a unique product. Now other people have copied it successfully, but still we are the original and we keep innovating on the same platform and introducing products, which still resonate with the marketplace.
For example, one of our best recent products that we launched in 2012 is now a key part of our sales. It’s called Aquarius. It has been invented here and it has being manufactured here, so the technical and the manufacturing power of the business is very important.
We have a culture of openness and engagement with people. We’re not a command-and-control military kind of company. Our purpose is not to make money. Our purpose is to make the world a better place, and if we do that well we will also make some money. Now that might be the romantic view of the world but I believe it. It enables people like me and people in my team to have the freedom to think about what could be. To open up our minds to what can be done, to possibilities, to options. And to face down any fears that perhaps we cannot do something.
I’m a big believer in getting universities involved with the manufacturing business. I have a very strong manufacturing background, also a business background with pharma, fashion, food and print. I have built plants around the world, closed plants in Europe, moved them to China. I’ve seen the good, the bad and the ugly.
We also sit on an advisory body to government about manufacturing policy. This is because we’re an award-winning company. Last year we won our fourth manufacturing excellence award run by the Institution of Mechanical Engineers. We spoke in the House of Commons a number of times on automation and supply chain initiatives. People want to hear what we have to say – and we want to share our experiences.
Last year we implemented a lean manufacturing programme, which saved our business a substantial amount of money. I asked my boss to use some of that money to create an innovation team looking at what we call disruptive innovation. We pretty much understand how to innovate as a manufacturer, we have the incremental innovation. We’ve got the radical innovation, which is new products and services within the same theme and platform. And we have disruptive innovation, which is things that don’t exist.
So we have a team, soon to be a team of five people, who have some really interesting projects, one of which I can tell you a little about because we’re doing it in collaboration with the government and a university locally. It’s a project that involves us bringing onto the market an energy-harvesting floor. It takes your kinetic energy and turns it into micro-electricity. That micro-electricity will be created from a normal vinyl floor in a roll. You can’t tell it’s something special; it’s something ordinary from which we form something special. It’s not mega-expensive and it’s not impractical. A hospital can think, ‘Well, for a normal price, I can have something that generates negative carbon footprint.’ But this isn’t just a floor; we’re selling a system. We can say to the facilities manager or the architect or the consultant or the investor, ‘We can help you choose your system, choose the colour, choose what properties you want. We will install it, we will maintain it. At the end of its life we will take it away and we will deal with the end of its life through reuse or recycling.’
The ‘Voice of the Customer’ programme gives us a lot of snippets from the customers, which we collect and these are reviewed by all of us. We then gauge how important some of the snippets are and we take different decisions in our incremental innovation. The problem with radical and with disru
ptive innovation is that you can’t ask people about things they don’t really know. That’s where we go away and observe people. Rather than have the voice of the customer, we’ll look at the behaviour of the customer. When you ask people logical questions, they’ll give you logical answers because it actually makes sense. That’s not necessarily what happens in reality. We understand that. That’s why we’re able to invest in disruptive innovation and especially on our radical innovation. Incremental innovation is somewhat easier because it can come just from the voice of the customer.
Our purpose and values manifest themselves on a day-to-day basis, habitually – because we value feedback and we talk to everyone and they feel happy to talk to us. There is a lot of engagement. For example, we have what I call an agile meeting at 12 noon every day. We have a stand-up meeting, we talk only about three things; every area and department – technical and manufacturing, logistics and planning – and they can say, ‘Here’s our priority for the day,’ ‘Here’s our sticking point for the day,’ ‘Here’s one of our successes from yesterday.’
We have that at 12 noon because people have had a chance to catch up with their day, it’s only 20 minutes and if we haven’t finished in 20 minutes, we get out. It’s not mandatory attendance. It is whoever wants to show up. It enables us to understand the priorities in a big factory like this. We often circle back after the meeting and say, ‘Okay, let’s talk about your sticking point.’
The ways of working here are progressive. We’re not using any unique technologies that someone else doesn’t have in our industry, but we’re very close to the leading-edge world of technology. What is unique here is the ownership of the business; we have a very enlightened owner. He is a unique individual, he’s engaging and he loves to do things right with people. That makes a huge difference and encourages all of us to do the same. In the next five years we will be bringing out some products that will blow minds.