There are two types of HR people, according to Mervyn Davies, group chief executive of Standard Chartered. “There are robots – those who believe in processes and that’s all. Then there are those with a real passion for people and who are willing to take risks.”
So it is just as well that Davies thinks Tim Miller, the bank’s HR director, falls into the latter category.
“I encourage my HR department to take risks. If you are developing people, you have to. I want people who are as passionate about developing others as I am,” Davies says.
As a chief executive in the ultra-competitive financial services industry, he says he has no choice but to be passionate about people.
“People are a huge proportion of our cost base and we are in the service business. So inevitably, although it sounds corny, we are a people business,” he says. “If you don’t manage people properly, they will leave.”
Davies clocks up more air miles than your average CEO in managing his employees. Standard Chartered has more than 40,000 staff operating in 56 countries, so he regularly travels all over the world.
Davies says he loves this part of the job, and his office at the bank’s headquarters near London’s Guildhall is testament to that. He has furniture, art and ornaments dotted round the room that reflect the multicultural make-up of the company.
There is a huge mix of different religions and ethnic backgrounds represented in the people who work there. Almost 80 nationalities feature in the firm’s top 400 managers. “Meeting different types of people has been one of the great pleasures of being on the board of Standard Chartered,” says Davies.
Davies is a regular in the Times Power 100 list of people who wield the greatest influence in the top echelons of UK business, so it is clear that underneath this congenial exterior he knows what it takes to succeed.
He has high expectations of his top managers: “I judge my people on their ability to develop other leaders, so I expect all of my top managers to show me they are able to do that,” he says.
“I believe to succeed in business you need people who can spot talent, just like in sport or any other walk of life.”
Like many Welshmen, Davies takes a keen interest in sport, and sits on the board of Tottenham Hotspur Football Club as a non-executive director. His other non-executive role is with retail giant Tesco, which he calls “a great employer”.
“One of the benefits of being a non-executive is that it gives you a first-hand opportunity to look at best practice in other companies and bring it back to your own organisation. Tesco does a great job in managing its people,” he says.
Engaging with staff is one of the key characteristics of a successful chief executive, particularly in turbulent times, says Davies.
“We are operating in an era of unexpected events – terrorism, tsunami, earthquakes and hurricanes. Therefore staff need to have a story told to them so that they understand what is expected of them,” he says. “I think my job is to set the scene, tell the story and get the most out of our employees.”
This is where a strong corporate emphasis on HR plays its part. Miller is an integrated part of Davies’ top team. “I view HR as a partner in the business, not as a centralised function that is not involved.
“I speak to Tim every day because if we don’t develop the right processes and right people together, the company will not be successful,” he says.
“The head of HR needs to be a wise counsel and a sounding board for the chief executive. Tim gives me advice all the time. Some of it I listen to, some I don’t.”
Davies wants his HR function to “move faster” and produce more young leaders who have an international mindset. “I want HR to find me diverse young talent that can cope in a high-growth environment,” he says.
To that end, every employee does a ‘strengths-finder’ test to find out what sort of individual they are. Davies has his top five strengths – achiever, futuristic, positivity, relator, learner – printed on his coffee mug for all to see.
This focus on people has affected the bottom line. Under Davies’ leadership, Standard Chartered has seen its profits almost double in the past three years. Last year the company’s pre-tax profits were up 39% to 1.2bn, the first time in its history the bank has broken the billion pound mark.
Davies says the firm’s shareholders are increasingly seeing the value of not just the numbers in annual reports, but what is actually happening on the shop floor.
“Shareholders never used to be interested in human capital and its management, but now that they realise this is what business is about, they are expressing more interest,” he says. “But I would like to see shareholders showing more interest in what companies are doing with their people.”
That is why Davies was a fan of the proposed Operating and Financial Review, which would have compelled companies to include meaningful people data in annual reports, before the government scrapped the idea late last year.
“I think companies should talk about what they are doing on diversity and inclusion, and what they are doing about talent development,” he says. “Annual reports should tell a story so that external audiences can make a judgement [about the company].
“Whichever way it happens now, it is important that shareholders and owners of companies get to better understand the way management is recruiting and developing talent. It is the key to any successful business,” he says.
Davies wants Standard Chartered to lead by example in the financial services sector. “I want every employee to think that it is a great place to work.”
To achieve that goal, the firm is beginning to recognise that as individuals’ approach to work changes, the way you manage them also needs to change.
“The types of experiences and training you give employees are changing. Companies have to spend more time on mentoring, personal coaching and leadership development as it’s quite a rich tapestry of things that you are looking for,” Davies says.
“Undoubtedly, you have to invest more than you used to in people – but you do get the payback.”
Standard Chartered is one of the world’s most widespread international banks, employing more than 40,000 people, representing 80 nationalities, across its network.
It operates in 1,200 locations in more than 50 countries in the Asia Pacific Region, South Asia, the Middle East, Africa, the UK and the Americas.
The company is named after two banks which merged in 1969. They were originally known as the Standard Bank of British South Africa and the Chartered Bank of India, Australia and China.
About Mervyn Davies
Mervyn Davies was appointed group chief executive of Standard Chartered in November 2001, having joined the board as group executive director in 1997.
He has a wide-ranging banking background in the UK, US and Asia and sits on a number of UK-Asia associations.
He joined the board of Tesco as a non-executive director in July 2003 and the board of Tottenham Hotspur in June 2004.
He has completed the Programme for Management Development at Harvard Business School and is a fellow of the Institute of Bankers.
Davies was awarded a CBE for his services to the financial sector in Hong Kong in June 2002.
He is married with two children and speaks Welsh fluently.