Proving that people drive profits

Investors In People week has just kicked off and its chief executive Ruth Spellman
has teamed up with actress Joanna Lumley to encourage more companies to apply
for the standard.  Ross Wigham reports

Actress Joanna Lumley and Investors In People (IIP) chief executive Ruth
Spellman may seem like an unlikely double act, especially for employers looking
for advice on leadership and team building.

But these two women have teamed up this week to urge employers to invest in
people management and develop the next generation of leaders.

The contrast between Spellman, who once ran for parliament, and Lumley –
star of TV series Absolutely Fabulous – is marked, although IIP justifies the
bizarre partnership by claiming a mutual passion for teamwork and leadership.

The focus of the organisation’s latest campaign leans heavily towards
leadership and Spellman is keen to dispel the myths and traditional stereotypes
that currently dog the UK workplace.

"We need to get away from the idea that only leaders lead," she
says. "The best leaders I’ve met are rarely at the top and business needs
to better recognise what good leadership really means."

The depth of the leadership quandary is illustrated by the level of demand
for the IIP’s new stand-alone leadership module, which has attracted 9,000
employers in its first eight months of existence.

"Leadership is a key area in business and it has become very complex. There
are so many gurus and experts around that it has clouded an issue that is
essentially fairly simple.

"It’s a hugely important area because too many businesses are
parachuting managers in and failing to develop their own talent," she

Spellman believes that many organisations have stuck to old-fashioned
leadership virtues, which often bear no relationship to how well people manage

She cites the deposed Conservative Party leader Ian Duncan Smith and England
football coach Sven Goran Eriksson – two more unlikely names – as perfect
examples of her point.

The former lost his job and failed to lead his party despite a command and
conquer management style, while the latter (the original quiet man) inspired
his team to the finals of the 2004 European Championships.

"There’s something very impressive about his [Eriksson’s] leadership
style because it’s not about copying the traditional model. You have to be able
to do your own thing and take other people with you.

"People often confuse bluster and shouting with leadership. If you have
substance and offer support, you can lead in a quiet and confident way,"
she says.

Spellman believes there has never been a better time for employers to invest
in staff and potential leaders with a new skills strategy under way supported
by massive government investment.

Around 34,000 organisations in the UK now have the IIP standard, and
although this covers more than 10 million employees, Spellman still wants to
drive up the numbers.

While membership has increased by 47 per cent in the past two years, she
concedes that IIP needs greater penetration among the FTSE 250 firms and more
awareness of what the standard actually achieves in business terms.

IIP hopes to attract a further 11,000 organisations to its ranks and has
developed a four-year strategy to fine-tune its offering and spread the message

"Initiatives live and die, but the key is what’s being delivered, and
that’s employers investing in people and increasing business success. I don’t
want it to become an academic concept because it’s about adding value to
business," she says.

The IIP standard is currently going through a major internal review to
ensure it’s delivering to employers and is relevant in the modern economy.

The results will be released in the autumn and used to revamp the standard
and help further meet employer needs.

Spellman says the evaluation will focus on the measurement aspects of IIP,
basic skills and ways of making it more meaningful to modern business.

She also hopes the redesigned IIP will be more focused on employees and
become widely recognised by staff as the hallmark of a good employer.

"Employee expectations are changing and we need to meet them as well as
maintaining the benefits for employers."

Communicating the benefits of IIP to individuals and how it works for them
will be another major part of the strategy for the next 12 months.

"At larger companies, people may not know about IIP or the process of
achieving it, and we need to work on that to give it more depth," says

This culture of partnership and involvement will become even more important
when the EU Information Consultation Directive (ICD) – requiring firms to
involve staff in business decisions – comes into force for larger companies in 2005.

Spellman is convinced the IIP standard can forge a new role for itself and
dovetail with the ICD regulations, helping employers to involve staff in the

"I hope IIP will be able to help organisations to engage with staff and
give employers advice on their options on compliance with the ICD. The standard
will be able to tie staff into the business," she says.

Spellman believes that a fundamental shift in employee relations and
business culture will also be necessary once the new rules are introduced.

"At the moment, there are lots of requests coming from the top of
organisations, but these also have to come from staff. That’s very difficult to
achieve because it has to become part of the culture. In this country I think
we’re just starting to scratch the surface," she says.

Companies must also close the gap between perception and application with
almost 96 per cent recognising people as the greatest asset, but significantly
fewer applying good people management policies.

The latest IIP research, released later this week, also aims to prove that
people drive profit and that HR policy has a measurable impact on the bottom

IIP is also launching a new scheme to attract CEOs, after identifying that
the people leading companies are the best way to spread good people management.

Spellman also welcomes the recent DTI productivity strategy, but says there
is still much work to be done if the UK is to catch its global competitors.

Lambasting UK managers, who are already under pressure, is too simple and
Spellman believes the problem is a complex one with many components.

She calls on organisations to start measuring productivity year on year
because current metrics are disparate and unreliable.

Despite this, the route to better productivity and high-performance
workplaces is essentially HR related and this means a bright future for the

"I still don’t think the alignment between HR and business is quite
there yet," she says, "but it is becoming a facilitator, making sure
things are happening. There’s now a lot more flexibility in the way HR can
offer solutions to employers."

Spellman emphatically refutes any talk of stepping down from the post that
she’s held for exactly five years.

Despite the challenges and criticism the role has brought, she is determined
to continue at a time that she is convinced is HR’s brightest hour.

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