Far from its image of lush pastures and equally luscious butter spreads, the dairy industry is fast-moving and highly competitive, and can pivot on small margins.
One of the major players in the market is Arla Foods, a global giant formed from the merger of Arla Foods and Express Dairies in November 2003. It has some of the UK’s best-known brands including Lurpak, Anchor and Cravendale Purfiltre in its portfolio. It also processes own-label dairy products for retailers, and delivers fresh milk and other dairy goods to more than one-and-a-half million homes throughout the country.
The company employs just over 6,000 people in the UK at its dairies and distribution centres. Other statistics read like telephone numbers, with 2.3 billion litres of milk processed each year, and an annual turnover of £1.4bn.
Taking the lead
From its UK head office in Leeds, head of organisational and management development Karen Pickersgill is tackling the challenge of making what she describes as a “culture alignment/business improvement programme” real. Known as Taking the Lead, the programme aims to turn Arla into the UK’s leading dairy company by clarifying the vision, strategy and values for the recently merged company.
“The catalyst for Taking the Lead was essentially the merger between Express Dairies and Arla Foods which brought together two dairy companies, both of which had a different culture,” says Pickersgill.
“The other driver was to deliver profitable growth to the new business and ultimately to the shareholders.”
Pickersgill speaks with clarity about the business challenges, and has a confident understanding of them which many in HR and training would envy.
“We work in a highly competitive environment,” she says. “The dairy industry is quite cut-throat.”
She goes on to explain that there are three major parts to their business: supermarket own-label milk, which has small margins; a brand portfolio, where Cravendale is experiencing “phenomenal growth”, and the higher margin, but declining market, of milk delivered to customers’ doorsteps by the traditional milkman.
“The challenge on the doorstep is to manage that decline or slow it down as much as we can,” she explains.
“In terms of what we want Taking the Lead to deliver, it’s about creating a leading dairy company by engaging everybody in the business,” she says.
Work started on the programme soon after the merger, when the group executive drew up the vision and strategy element. Soon after, a team from different parts of the business developed values to create a culture that kept hold of what was good about the former Arla and Express businesses, and could then be presented as an internal brand.
Pickersgill and her team realised that the management population had to be involved pretty quickly if the internal brand was to be seen as alive and meaningful.
A conference for the top 80 managers in the UK last November then led to a series of communication briefings across the business. This was followed by 19 two-day workshops attended by 40 line managers at a time, working in groups of 10. The workshops took place between January and April 2005.
“To do this, we had to train more than 30 people in the business to facilitate the workshops, and took the conscious decision not to involve external consultants in the training,” explains Pickersgill.
The 30 were chosen from right across the business – from distribution to sales. “Lots of people were keen to be involved – people who had been involved in developing the values, people who were influential and had gained respect in the organisation,” she says.
This embarrass de choix meant that Pickersgill could handpick the facilitators who were going to be put through a three-day ‘train the trainer’ event, to get them to the point where they could work with the training and development team to train managers across the business.
“By doing the work in-house, we have got a cadre of people who have a really high level of motivation and ownership, and are driving out Taking the Lead in their part of the business,” Pickersgill says.
Feedback from the line managers shows that keeping the process within the organisation was a popular choice.
“One of the things they particularly liked was that we used internal people to do the training, and they were very impressed by [the trainers’] level of commitment,” she says.
Pickersgill is passionate that Taking the Lead should not be an empty statement. As a result, line managers are now expected to make the programme meaningful at a local level.
“Everyone in the business should know what the visions, strategy and values are and understand what they mean locally to them. The values constitute a set of behaviours that we want to see being displayed in all parts of the business,” she says.
Taking the Lead’s effectiveness is being measured and evaluated through a questionnaire, known as Taking your Feedback, sent to all 6,000 UK employees. The results, due in August, will be a precursor to a full employee survey, set for 2006.
The line managers are relied upon to convey the values (such as “We’re known for growth”) through team-based sessions, and to identify actions that the team needs to undertake.
“‘Lead by example’ is a key phrase that we constantly referred to in the workshops and back in the business,” says Pickersgill. This is backed up by the expectation that the line managers will align the strategy for their sections with individual targets.
“We have also asked them to communicate performance and progress against business strategy on a regular basis, because again, we had a lot of feedback after the merger that we weren’t getting information out to the business. So when we launched Taking the Lead, the question on every manager’s lips was: ‘How will we know how we are doing against the strategy?'”
The answer, says Pickersgill, was for the HR department to help line managers communicate business performance against strategy by developing a resources handbook on what they expect managers to do to make Taking the Lead a success.
It is a guide to what is expected from the allocated 30- to 60-minute period at team meetings when people talk about the company values and identify ways in which they can be pragmatically applied to deliver improved performance.
For some line managers, the facilitation process can be daunting, says Pickersgill. So the handbook also contains information on how to prepare for and run the team sessions, and how to create an action plan at the end.
“We’re going to put a section in there on performance management as well, so that we’ll build up this resources kit and it will be everything that they need to help them lead by example in relation to Taking the Lead,” says Pickersgill.
But the training and reinforcement doesn’t end there. She is currently designing a training programme for performance management.
The main aim of these development solutions is to bridge the gap between competence frameworks and reality.
“It is one thing to identify strategic thinking as a core competence in the business strategy, for example, but what are we going to do to deliver it?” she says.
She is wrestling with change management and leadership skills to compile a management development framework that identifies core competencies for every managerial level – from junior to more senior levels.
Programmes are already under way for middle managers.
Coaching middle managers
“We have got a lot of very talented people around middle manager level, and we have launched a leadership development programme for middle managers with potential,” she says.
There are 20 managers going through the modular programme, which consists of two four-day modules. The first part, an experiential programme, was held in the Lake District, with “lots of personal insights gained through feedback”.
Pickersgill describes it as “an incredibly powerful” piece of development, which aims to give the middle managers self-confidence and self-awareness, and to give them leadership and coaching techniques they can use to coach their teams. “It enables them to come back and deliver results,” she says.
Pickersgill, who is studying for a diploma in executive coaching, has further plans to develop coaching at Arla, to help individuals achieve behavioural change.
“At an organisational and individual level, coaching is all about releasing potential and improving performance. The key for me is growing our own using internal coaching experts like our line managers. It all adds up to giving managers influence and support.”
Karen Pickersgill’s CV
- 2004 Head of organisational and management development, Arla Foods
- 2002 HR controller for strategic projects, Arla Foods (Scandinavia)
- 1999 Group management development and training manager, Arla Foods
- 1998 HR manager, head office, Arla Foods
- 1990 Various HR roles, ICI
- 1987 Various HR roles, SmithKline Beecham