Great strides at Levi’s

When Bruce Robertson joined Levi’s as the UK’s HR director, he found a
company culture at variance with the sociable image of the brand. Paul Tyrrell
reports on how he began to transform its people practices

Levi Strauss & Co, the jeans-maker, whose advertising included a famous
launderette striptease by Nick Kamen, celebrates its 150th birthday this year.

It is one of the best-known brands in the world, and an innovative employer
– the first multinational company to develop a code of conduct to ensure fair
treatment of all its staff, and one of the first to offer flexible working
hours.

However, the company no longer looks invincible. Worldwide sales fell from a
peak of £4.25bn in 1997 to £2.45bn last year, largely due to a massive rise in
competition in the jeanswear market, and a fall in the amount spent by young
people on fashion. Since early 2002, Levi’s has axed around a quarter of its
staff, taking its total number from about 16,600 to around 12,400.

Last year’s redundancies included 650 in Scotland, where two factories were
closed as part of a manufacturing shift to Hungary and other low-wage
locations. The closures were announced in January, and it was shortly
afterwards that a new UK HR director, Bruce Robertson, was recruited from Pret
A Manger.

"The closures in Scotland were dealt with in Brussels [at Levi’s
headquarters for Europe, the Middle East and Africa]," Robertson says.

"Following the resignation of my predecessor," he adds
euphemistically, "the company took the opportunity to bring in more HR
experience to raise the profile and involvement of HR in the UK business."

Robertson is a retail specialist who worked at Pret A Manger from early
1999, when the sandwich seller had more than 2,000 staff and 20 new shops were
opening every year. Prior to that he was head of personnel at high-street
clothing chain Jigsaw for 18 months. He also worked at Harrods for eight years,
where he climbed his way up to head of human resources after completing the
management training scheme.

Now settled in a bright and orderly London office, overlooking Carnaby
Street and just a stone’s throw from the company’s flagship store on Regent
Street, he is responsible for Levi’s employees in the UK, Ireland and
Scandinavia – about 450 staff in total. Most perform head-office functions such
as marketing and IT. Only around 184 are actually in retail, as Levi’s
franchises most of its UK stores.

Think global, act local

"Many US companies would enforce a standard model across their
international divisions, but Levi’s has never done that," Robertson says.
"Part of the strategy contained in the ‘LS&Co way’, the values and
vision of the company, is to operate globally, but act locally."

He adds that freedom to make meaningful changes was one of the key things
that persuaded him to join the company.

"We have a central ‘reward and recognition’ team that standardises
things across the markets, but it’s up to the local HR function to work out,
for example, how to tailor compensation packages to their market.

"Even in the product portfolio you will see a very different range in
Europe than in the US or Japan. Locally, we also decided to use the
implementation of the ‘LS&Co way’ as a tool to trigger a change in the UK’s
internal working culture," he says.

The need to respond to local trends is particularly vital in the UK, which
is seen by Levi’s and many other fashion retailers as the most competitive and
continually evolving market in the world. So making Levi’s UK sales team
"more proactive and less reactive" was highest on Robertson’s list of
priorities.

He quickly increased the number of key account managers from four to six,
relieving the administrative burden. He also created a new UK role of sales
director, a move that has since been copied in other Levi’s territories.

"We had two UK sales managers and needed to amalgamate them into a UK
sales director’s role, someone who could deal with House of Fraser, for
example, at a more senior level," he explains.

"Bringing in a sales director gave the new managing director for the UK
& Ireland – Mat Mycock, recruited from Diageo – a chance to step back and
delegate some of his ambassadorial role."

Talking the talk

It was during this restructuring that Robertson became aware of a
communications problem – not just between the offices in London, Northampton
and Dublin, but even between workmates in the same offices.

"There were cases of people e-mailing each other across the office or
even the room," he says. "There was often a lack of human interaction
and a certain lack of trust."

Robertson learned a lot by simply talking to the IT department about the way
people used their computers.

"I was surprised by the number of people who asked for receipts for
their e-mails," he says, referring to a feature of e-mail software such as
Microsoft Outlook that enables users to be notified when their messages are
actually read, rather than merely received.

Clearly a ‘pow-wow’ was required and, in partnership with local managers,
Robertson decided to increase the number of divisional get-togethers from one
to four every year.

At the first of these new-style meetings, the entire team was shuffled into
seven groups and asked to come up with high-impact, low-cost initiatives to
improve the Levi’s working environment. The feedback was consistent: staff
wanted better interaction, fewer e-mails and more phone calls, and ‘photo
boards’ on which to display the new recruits, first on office walls and then
online.

"Now we have an informal rule," Robertson says. "If you
haven’t spoken to someone in the UK, then you must pick up the phone and talk
to them before you e-mail them."

Uniting behind the brand

Small measures like this have proved very successful, Robertson says. But on
their own, they would not be enough to get people thinking as a team. Too many
people in the company could only describe their role in isolation, and not as
part of the business of actually getting jeans into the hands of the customer,
he says. They needed to be united behind the brand.

His solution was an ongoing programme of ‘reinduction’ for everyone in the
company. This involves groups of up to eight people learning about the
financial aspects of Levi’s worldwide and in the UK, as well as its values and
visions. And every employee now spends a day at the flagship store, at head
office, with an account manager, or at a distribution centre, observing what
happens at the coalface. The aim, Robertson says, is to "reinvigorate
people about Levi’s".

"There’s a lot of pride at this company, and people still get nostalgic
about the Nick Kamen ad," he says. "But previously they didn’t have
enough information given to them to reconnect to the brand."

Of course, while Robertson wants to get his staff into a sociable mindset,
he does not want them to get too casual, as Levi’s is currently in the middle
of what it calls ‘The Great Turnaround’ pack. Shedding staff was part of the
painful march back to growth. So from 7 April 2003, employment contracts were
reissued under new terms and conditions that, in Robertson’s words, are
"less employee-centric".

"When you’re in a turnaround situation, you need to be flexible,"
he says. "One change, for example, concerned our Northampton office, which
used to close down on a Friday at 1pm – a legacy from past years. This sent
very mixed messages to the rest of the company, and more importantly, to our
customers."

Overall, it is a series of small, but fundamental measures that have helped
to transform the division’s culture. They were made possible by a senior
management that trusts its regional executives to act locally, but also,
Robertson explains with relish, because there was no UK managing director at
Levi’s when the new contracts were being negotiated.

"I had to lead and, in many cases, go beyond neutrality, so it was a
great challenge. It’s one of the best examples to my mind of a company where HR
has been allowed to be truly influential."

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