Nick Worthington: sleeping on the job – a view from the top

Nick Worthington, chief executive of furniture retailer Dreams, is bucking the retail slump with plans to double sales and open a host of new stores. Louisa Peacock met the man with king-size ambition.

Shoppers can buy just about anything to do with a good night’s sleep at beds superstore Dreams, from king-size divan sets to company-branded aromatherapy candles. Since 2006, the retailer has opened its doors to customers on the internet, launched a new bed factory and has been crowned the nation’s fastest growing retailer by Europe’s 500.

Britain’s biggest bed specialist, employing 1,500 staff, Dreams, racked up some impressive results last year. It achieved an 88% rise in profits, won furniture retailer of the year for a third time and its founders sold a majority stake of the business to a private equity firm for an estimated £200m windfall.

With more than 160 stores in operation, the retailer is on track to open another 36 stores this year alone, something that compares favourably to Britain’s struggling retailers which have been hit by slowing consumer spending. With ambitious plans to double its turnover to £200m by 2011, it seems Nick Worthington stepped up to the top job at the right time.

Life’s a dream

Worthington has been at Dreams since 1997, when he joined as a sales manager. He has worked his way up through the company, taking more responsibility for retail sales, and eventually leading on sales, distribution and logistics. He became managing director in 2006 and chief executive in March this year.

“Becoming chief executive was never something I felt I wanted, or needed, to achieve, although I do like to make all the decisions. At Dreams I’ve been fortunate enough to have been rewarded for the contribution I’ve made to the business and I take tremendous pride by what we’ve achieved in the past 10 years.”

Key among those achievements has been the launch of three retail academies, one of the many people initiatives that Worthington has overseen. The academies began early last year in West Midlands and have since expanded to High Wycombe and Warrington. They teach new and existing employees about selling, products, customer service and internal IT systems.

“It became apparent to me five years ago that we had to invest more in training and development to be able to cope with our growth plans. But it also became apparent we didn’t have that [people] support in place,” he says.

“With the academies in operation now, it has reduced the whole timescale for getting [new] people up to the required level. They tend to be operationally effective at a much earlier stage.”

From his time working his way through various positions, he has seen first hand that people don’t leave companies, they leave people they work with or the systems in that company that have let them down.

“Nine times out of 10, you realise people leave companies because their management team or a member of that team has failed to address an issue, because they’ve not been given the appropriate support,” he says.

Dream job

He wants to put this knowledge to good use to reduce staff turnover at the beds superstore. Currently at 25%, which is lower than the industry norm of 30.5% for retail and wholesale, Worthington aims to get this figure down to 15% during his time at the helm. Empowering existing employees to take over new roles or responsiblities before recruiting externally is one such way of doing it, he says.

Faced with opening up to five new stores a week in some cases, Worthington relies on two or three key experienced people within the company to ensure this runs smoothly.

“I believe in a strategy where you develop your internal expertise and you recruit externally to bring on the skills you require to move you to the next level. You have to allow staff to prompt the next set of ideas, the next potential opportunities and developments,” he says.

However, Worthington is frustrated with how slow it is to get people on board at Dreams, and says the pace of recruitment is holding back its expansion. On average the company receives about 1,000 online applications a week for various roles, which takes a significant amount of time to filter through.

But with only 45 retail positions being advertised nationwide, and just 11 roles available at head office, the HR team are understandably overwhelmed with applications, which means the entire recruitment process takes too long, he says.

“If there’s one thing I could change about HR it would be to fill our vacancies quicker,” he says. “HR rightly goes through the various hoops and ensures we recruit in a sensible and balanced way, but obviously when you have a key function missing or you’re trying to develop a key area of the business, that can be an area that holds you back.”

Dreams competes for talented staff with companies such as IKEA, Furniture Village and Argos, but Worthington looks to other people practices in the business to help differentiate Dreams as an employer.

Putting people first

For example, earlier this year the company was one of the first in the retail industry to offer a degree-level qualification for staff. The retail management foundation degree, taught by lecturers at Buckinghamshire New University, will fast-track 12 Dreams managers through the programme in just one year. It is hoped to roll out a two-year qualification to all employees nationally.

“The staff going on this course are people who will play a key part in development of business. I’m sure that as their skills improve they will pass those onto the rest of their teams,” he says.

But training is not the only people initiative Worthington is proud of. Two years ago he made sure that HR was represented on the Board at Dreams, primarily to make sure the company was equipped for growth.

“I’ve built a Board structure that supports change. I brought on a resources director [at board level] and the support of HR director below the board level. You can’t afford to rely on just one [HR] person who’s trying to drive growth.”

Worthington meets with his HR director on a daily basis and more formally every month to keep up to date with progress on key performance indicators, He says having HR at the top table has helped align employees’ objectives to the company’s goals.

“HR is probably one of most important departments in the business. If we lose our staff we have a problem, and if we can’t attract staff we have a massive problem. For me, the success of business over past 10 to 15 years has been solely down to the quality of people within the business at all levels,” he says.

Sensible approach

Worthington has seen the HR function change for the better over the past 10 years, to adopt a more sensible, commercial approach. He disputes a recent survey by consultant PwC which stated the function was “at a low ebb”, and disagrees wholeheartedly that HR was simply a cost to be minimised.

“There’s a historic view that HR is not in line with the headline strategy of the business, that you have to accommodate it to tick the boxes [in employment law]. But when you get an engaged HR department which is absolutely trying to deliver, it makes such a difference.”

HR professionals, in his experience, are hands-on, prepared to interview at all levels and capable of handling complex industrial relations cases, he adds.

But Worthington is no stranger to keeping people tactics simple. It’s very well having senior HR teams in place, he says, but the real trick is in making sure managers know how to handle their teams and day-to-day problems, so that employees are felt to be valued and trusted.

“It’s staggering how easy it is to deal with some of the people issues, yet managers can get it wrong. For example, everyone tells me in business how good they are at communicating, but historically it’s happened only one-way. Good communication is two-way. It’s sitting down with your people for half an hour a week, just to talk to them about how they feel, how they’re getting on with things, issues and frustrations,” he says.

Down to earth

A family man still with his feet firmly on the ground, Worthington has seen it from the employee’s perspective. Outside Dreams, he’s done just about every job there is in retail, from working on the shop floor at electrical retailer Comet to becoming a PA to a senior director at Sainsbury’s supermarket.

At the beds superstore, he therefore encourages healthy dialogue and provides opportunities for more junior employees to raise issues.

“Staff accept there might be restraints on certain things, or they might be expected to do certain things, but it’s usually the small things that grate with them, and that cause them to end up looking for a new job.”

But he also knows that the formal training and qualifications Dreams offers will not be right for every employee. Admitting he “did not do particularly well” in his school years, nor did he pursue a degree, Worthington likes to encourage a culture at work where staff can learn first hand from their colleagues.

This is where his motivation has come from. “From an early age I had to go out and work for every penny I received. I got into retailing through part-time work, and I realised that this is the sort of environment where if you have a degree of common sense and you’re prepared to roll your sleeves up and work hard, you can move very quickly.”

Worthington is happy to take hints from his HR department. When asked what the best piece of advice an HR director had given him over the years, he replies: “Never make a decision when you’re emotionally annoyed with somebody. Take time to think it through and do the rational thing.”

In other words: sleep on it.