Engaging staff: Lessons from Asda

When I talk about Happy and how we've tried to create a great workplace, there are two very common questions: "Would what you've done work in a much larger organisation" & "Could you create that environment with staff you inherit, and are disengaged?"

I strongly believe the answer to both questions is Yes and I heard a great example of it from David Smith, the inspirational ex-Head of People at Asda. Speaking at the MLab conference on Employee Engagement, at London Business School, he explained that Asda had been 10 days from bankruptcy back in 1990.

By focusing on their people, they turned it around and grew to the company they are today: £18 billion in sales, 170,000 employees and rated the Best Place to Work in the UK in 2008. David set out 7 key points:

1) Hire for Attitude
"We realised we wanted gregarious, outgoing, chatty people - who will make it a pleasant experience to shop at Asda. We invest in recruitment, even the most lowly paid staff go through half a day at an assessment centre as part of th recruitment process.."

2) Overdose on Communication
"Talk in human language to reach people. At every staff change-over, every day, we had a 5 minute briefing to inform people."

3) Listen
"All my best ideas came from shop floor people"

4) Change Management Style
"Retail is a military operation. But we needed to move managers away from the old management style. One third of managers were enthusiastic, one third followed us and one third were resistant. "

5) Remove Under-performers
"Be ruthless with this, and most of the third of managers who were resistant are no longer with us"

6) "Money is a De-Motivator"
"Focus on financial rewards is not the way to motivate. We focused on recognition, even having an oscar ceremony for great service"

7) "Work made fun gets done"
"bring yourself to work". Bring all of your character, and be part of the community.

The turnaround has been based on a focus on engaging the front-line staff. Their measure of engagement has risen from 55% in 1990 to 91% today and Asda was rated the best company to work for in the UK in the Sunday Times survey in 2007.

"We have 360 separate P & Ls and I have done the calculations", explains David. "There is an absolute positive correlation between staff engagement and profitability. If a branch can achieve an engagement level of 94% I guarantee the profits will grow exponentially."

Watch out for David's forthcoming book "Asda Magic", out in 2010.