Argos, Milton Keynes

Shortlisted team for Award for Organisational Change: Personnel Today Awards 2000

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Argos, Milton Keynes

In 1998 Argos was facing two years of falling sales, rising fixed costs and a tired brand associated in the consumer’s mind with poor service. Most of its board directors had been there for more than 10 years and presided over a bureaucratic and complacent culture where decision-making was centralised and concentrated at the top. Blame was readily apportioned, which led to risk aversion. There was little innovation and cross-functional project-based working was rare. The arrival of a new CEO, Terry Duddy, heralded a review of the business and the need for fundamental change to ensure its survival and growth.

HR was not only instrumental in shaping the change, it also played an essential role in helping the board recognise the need for a clear, communicable business strategy. First it had to get its own house in order so that it was better able to support the rest of the organisation through the changes. This involved members of different functions in HR working together in mixed teams to diagnose areas of improvement in its own performance, as well as undergoing skills training relevant to change management. The move also saw the department encouraging line management to take ownership and because of improved efficiency the team shrank from 134 staff three years ago to 94 today.

HR’s solution was two inter-related programmes to deliver the business strategy and cultural change, and to improve service. This comprised a customer focus programme and a leadership change programme. A major obstacle to that change, however, was the existing entrenched culture – particularly cynicism and the slow speed at which the company moved.

HR sourced the consultants where necessary and managed delivery of the programmes. It also helped Duddy in streamlining the board with six directors leaving and appointing four, in a way which did not jeopardise the business operation.

Development of the business strategy (Strategic Linkage Model) began in April 1999 with corporate values validated in May by 30 of the most senior managers. A series of two-day workshops was used to train 127 change agents who then rolled out the strategy and values to the rest of the company through half-day “Town Meetings”. To develop the business strategy and values and share them with the whole of the company took two-and-a-half months.

To measure and drive performance, HR sourced and validated a competency framework, the Success Factor Framework (SFF), which reflects corporate values. A tool for delivering 360-degree feedback against this framework is being implemented along with a package of development options. Profiling of key roles using the SFF is also nearing completion. Finally, to meet the differing needs of the business, flexible performance management processes are also being introduced.

The impact of the first year of the change programme at Argos can be seen in improved financial performance with increases in sales and profits. A culture survey carried out among staff at the start is being repeated and anecdotal evidence indicates considerable enthusiasm for the changes.

Company fact file

Team Organisation Development

Team leader Pat Lee

Number in HR team 94

Number of employees responsible for 18,000

Main achievements Improved financial performance; speed and risk-taking has increased with several new projects directly linked to the Strategic Linkage Model and reduction in cynicism about senior management commitment

Priorities for next 12 months Continuing customer focus and performance management development

Judge’s Comment “Argos showed an effective and extremely rapid response to a declining market that was critical to its survival. The scale, amount of supporting material and tools generated to assist their people through the cultural transition were impressive, especially given the timescale, as have been the outcomes in terms of turning the business around”

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